If you’re thinking of putting a property on the market that you live in or rent out, then there are more costs to be prepared for than just solicitor fees. Other costs when selling a house include estate agency fees, removals and perhaps early mortgage repayment fees.
So what fees do you pay when selling a house in England & Wales? Read on to find out about all the possible costs, from getting the home ready for sale to having an EPC drawn up.
Estate agent fees
When wondering what the costs of selling a house are, estate agent fees are usually the first thing that occurs to people. Estate agents will usually charge a fee when they secure a sale on your home that goes through, and this may be charged as a percentage or a flat fee.
The best way to approach this is to do your research. Speak to several agents about their fees. These will normally differ depending on whether you appoint a sole agency or multiple agencies, the type of agent may also make a difference depending on whether you speak with a large corporate agent or a more local independent agency.
Items like photography and floor plans are often included in estate agent fees, but don’t assume as sometimes these do incur a separate charge.
You’re likely to find that the fees charged by online estate agents are cheaper. However there are some important implications to be aware of. The fee may be payable upfront, giving the agency no real incentive to sell. Even if they don’t sell it at all, you won’t get that money back; as opposed to a high street agent who generally only charge fees once they have been successful in selling your home
This also removes the online agents’ motivation to achieve a higher price, as you’re paying the same rate whatever the house or flat sells for. In contrast, a typical high street agent will get a percentage of the achieved sale price. This means it’s in their interests to secure the best possible sum.
Conveyancing fees
Solicitors may charge a fixed fee for conveyancing, or some may bill as a percentage of the sale value. The quality of service and rates can vary enormously, so do shop around but don’t look for the cheapest fees as this could be directly related to the service you get.
Ask friends, family and neighbours for a recommendation. Or see if your estate agent has any suggestions. They may have first-hand experience of someone who can get the job done efficiently and effectively.
The good news is that selling fees tend to be lower than buying fees. Do bear in mind, though, that it costs more in terms of conveyancing to sell a leasehold property, such as a flat. This is due to the additional paperwork involved.
A solicitor will also charge more to sell a property with a mortgage than one that’s owned outright. Again this is down to extra paperwork.
EPC
Every home sold in the UK requires an Energy Performance Certificate (EPC). Your estate agent may cover this as part of their fees, but most do not. Independent surveyors will be required to produce EPCs, so you may pay them directly.
An EPC is required because it tells buyers about the efficiency of your property. It will be rated somewhere between A and G, with A being the most efficient and G representing the poorest performance possible. This document can be key, as it informs buyers about the property’s projected running costs.
Early mortgage repayment fees
If you’ll be repaying a mortgage once the sale of the home goes through, then there may be additional costs to factor in. Many banks and building societies charge early repayment fees when you redeem a mortgage before the full term has run.
Again, these can vary drastically – but unfortunately, you cannot shop around in this case. It’s best to find out early on what you may owe regarding this, as it may influence your decision regarding when to sell.
In general, the longer that’s left on a mortgage term, the more you may pay. These repayment fees are also known as mortgage exit administration fees (MEAFs). You should be able to find out what these will be within your original mortgage contract.
Preparing a property for sale
Getting that flat or house ready to go on the market may also incur costs. It depends on how much is necessary. There are several things you can do to improve the property’s appeal, so think carefully about what to prioritise.
A clean home is essential, and even if you hire professionals, the cost shouldn’t be too high. It’s worth taking care of any minor repairs too. As for major repairs, there are two options. Either get these fixed, or be prepared to offer the buyer a discount for passing the problem onto them.
To decorate or not to decorate? This can be costly, but may be necessary if the home hasn’t seen a fresh lick of paint for years or even decades. Do bear in mind that the buyer is likely to redecorate anyway, so if it all looks well maintained then it’s probably not worth bothering. Damage such as badly scuffed walls, peeling wallpaper or crumbling plasterwork can be very off putting, however.
Removal costs
Removal costs can also vary dramatically. Anything between a few hundred pounds to several thousand pounds plus is possible. You can hire a firm to do everything, including the packing of all your possessions, or do it all yourself by hiring a van. Plus of course anything between the two extremes.
Many factors can influence the price you’ll be quoted. How much furniture, white goods and other items you need to move is obviously important. The distance you’ll be moving your belongings is also crucial. If you have nowhere to put these things, then you may also need to consider storage costs.
If you do decide to do it yourself, make sure any home insurance you have will cover you for the move itself. You’ll also need to factor in hire costs, fuel and packing materials.
Tax
When the property isn’t your main home, you may be liable for tax. Capital Gains Tax applies to any property that isn’t your main residence. The sum is calculated according to how much the value has increased during your ownership.
It’s a good idea to consult an accountant regarding your Capital Gains Tax liability. The good news here is that costs such as estate agency and conveyancing fees or home improvements can be taken into account, thereby reducing your tax bill following the sale.
Sell your home with Stanford Estates and benefit from the expert advice of experienced estate agents.