Lockdown #2 update: You can still buy a home, sell your home and move home during the lockdown in England starting on Thursday 5 November (unlike the first lockdown in March). But you must follow Covid safety guidance.
The Breakdown Of Costs To Sell A House (And How To Keep Costs Down)
The reality is, the cost of selling a house can drastically vary, and it largely boils down to your specific circumstances and the few key decisions you choose to make.
Yup, you can either make it a relatively cost-effective process, or an uninspiring exercise of launching large sums of money into a blackhole. They’ll be pros and cons to each path, all worth bearing in mind.
So, let’s go through the key decisions you’ll have to make to help you prepare for the costs associated to selling your house. Or any house, I guess.
While this is a landlord blog, this particularly blog post is focused on selling a regular residential house, not a BTL property. In principle, the process is actually the same, but there are a few additional aspects landlords may need to bear in mind:
- BTL properties are subject to capital gains tax (CGT)!
- If you’re trying to sell a property with a tenant in situ, you’ll have to deal with that added complication appropriately.
Besides from the above two points, everything else generally applies across the board for every residential property sale.
How much does it actually cost to sell a house?
Below is a breakdown of the main services most people will have to pay for when selling a home. The good news is, nothing should seem out of the ordinary.
Note, most of the services listed are circumstantial, so they may not even apply to you.
|Remortgaging||£1,500 – £3,000||Competitive Mortgage Quotes|
|Energy Performance Certificate (EPC)||£60 – £120||Order Online for £69|
|Estate agent fee|
Online Estate Agent: £600 fixed-fee
High-street Estate Agent: 1 – 3 % of selling price
|List of Online Estate Agents|
£500 – £1,500|
Could be more if you’re buying a property also.
|Get Competitive Quotes|
£300 for a 1-2-bedroom house
£500 for a 3-bedroom house
£700 for a 4-bedroom house
£900 for a 5-bedroom house
Costs are based on moving 10 miles away in 2018.
|Get Competitive Quotes|
|Early Repayment Charges||1% – 5% of the remainder of your mortgage debt|
|Home improvement costs||Varies by case|
Costs explained, and how to drastically reduce the cost of selling your house!
As covered in the introduction, there’s potential to save a small fortune when it comes to selling your home, but there’s also good opportunity to spend a small fortune, too.
In this section I’m going to briefly cover each of the expenses and explain where there’s opportunity to take a sledgehammer to the costs!
1) Mortgage fees and Remortgaging
There’s a couple of critical points to consider when it comes to mortgages, so if you’re not vaguely familiar with how mortgages work, you may quickly get lost. However, I’ll try to keep it short and simple, with the hope of giving you the tools you’ll need to go off and do your own due diligence.
If mortgages seem uninspiring to you right now, and consequently you’re about to switch off, just keep reminding yourself that this is the area where most of your costs can rapidly rack up.
Firstly, before you even start strolling down the path of selling your house, make sure you assess your finances first. Your [inefficient] financial position may make the whole idea a non-starter, so the sooner you find out the better. Yeah, there actually is such a thing as being too broke to sell. Ironic, aye?
If you’re still within your existing mortgage term, it’s important to check your policy to determine if there are any fees you’ll be liable for if you decide to move. If you’re unsure what to look for in your policy, it’s always best to contact your lender for assistance.
If your mortgage is ‘portable’, then that means you should be able to move your existing mortgage onto a new property (if you’re moving into one, that is) without incurring any extra costs. Of course, that is subject to the fact that your lender is happy with the new property and the price, and has generally agreed to the deal.
If your mortgage isn’t portable, then you’ll most likely be subject to early repayment charges, which can typically range between 1% – 5% of the remaining balance of your mortgage debt. Yup, OUCH! For example, a 2% early repayment charge on a £200,000 mortgage would be £4,000. Not cool at all.
If you’re out of your fixed period (so you’re in a position to remortgage) or require a new mortgage altogether, then this is where you can potentially make the biggest savings! Whatever you do, just make sure you shop around for the best deals. Even the tiniest of percentages can make thousands of pounds worth of differences.
2) Energy Performance Certificates
Anyone selling a property (at least, in England or Wales) is required to obtain an EPC, and provide it to potential buyers so they can view the energy efficiency of the property for sale. If you look at property listings on Rightmove or Zoopla, you’ll notice that each property advert has its own EPC report on display.
EPC’s costs between £60 – £120.
EPC’s remain valid for 10 years, so if you have a valid one, then you can reuse it and save yourself a few quid. The only time it’s worth renewing an EPC – even if you have a valid one – is if you have made significant improvements to your property’s energy efficiency levels since the assessment was conducted. Improvements such as double glazing window, a new boiler, insulation etc. Your report should reflect the improvements because it could make your property more desirable, especially since we’re becoming a nation obsessed with environmental issues. And rightly so.
3) Estate Agent Fees
Estate agency fees is up there with the dizzy heights of mortgage fees, and similarly, you have options to either spend or save a buttload on agency fees. The choice is yours!
If you want to go down the traditional route of using your local high-street agent, you should expect to pay between 1% – 3% of the sale price. That usually includes marketing (i.e. advertising your property for sale on Rightmove), professional photography, enquiry management, viewings, negotiation management, and support up until completion.
So, if your property sells for £150,000 and your agent charges a 1.5% commission, you’ll have to pay £2250 on agency fees.
HOWEVER! With the introduction of Online/Hybrid Estate Agents, which includes the likes of Purplebricks, Yopa, Strike (formerly Housesimple.com) and Doorsteps (to name a few), it’s become entirely possible to sell your property for as little as £99.
Unlike traditional high-street agents, online agents charge a one-off fixed fee (which is significantly cheaper than using a high-street agent). As you’d expect, there are some notable differences between the two types of services. I won’t go through all the differences right now, because I’ve covered everything in my online estate agent guide. I definitely recommend reading it if you’re interesting in learning more about online estate agents and using a much cheaper alternative to a high-street estate agent.
4) Conveyancing Fees
You’ll need to hire a solicitor or licensed conveyancer to handle the legal paperwork of your property sale. They typically charge between £500 and £1,500 for sales conveyancing. The price will usually depend on the complexity of the situation. For example, dealing with leasehold properties is generally more complex than freehold, so it costs more.
It’s also worth noting that getting several quotes can be a genuine money-saver, because some conveyancing service providers are generally more expensive than others.
If you’re buying a property (as well as selling), the same solicitor can usually deal with that transaction as well, in which case you can negotiate fees accordingly.
Reallymoving.com have a comparison tool that provides 4 instant quotes from expert SRA or CLC regulated conveyancing solicitors or Licensed Conveyancers who can organise the conveyancing for buying, selling or remortgaging your property. The average saving is £365.
5) Removal Company Fees
If you have a small and manageable amount of possessions that need transporting on move-out day, you probably won’t need to splash out on removal services. However, if you’re dealing with a lot of cargo, hiring a removal company can make a stressful process a whole lot less stressful. It’s often money well spent, especially if you’re prone to easily getting stressed and have a weak heart.
You can expect to pay between £400 and £1,500 for removal services; the cost will depend on the amount of cargo you’re trying to shift, and also the distance to where it all needs to be transported to.
As always, it’s best to get quotes first, because it’s very easy to overpay for removal services. You can use this tool to quickly compare house removal quotes.
Are you desperate to sell? After a quick sale?
I’m going to throw a bit of a curve-ball your way. This definitely won’t be for everyone, but I think it’s safe to assume that not everyone will be in the same position. Naturally, some of you will want to sell your home quicker than others.
If you’re in a particularly desperate situation, and you’re looking for a fast cash sale, you might want to look into the services of Quick House Sale Companies.
I know, I know! That doesn’t sound too good at all.
The truth is, using a Quick House Sale Company isn’t the ideal solution for selling, because you’ll typically have to accept an offer that’s below market value, and what’s more fearful is that they have a worse reputation than estate agents. Hard to believe, perhaps. I’m just the messenger.
On the upside, Quick House Sale Companies move very quickly and they’re cash-buyers. They generally take care of the whole process. You could have your property sold, with the money in your bank in a matter of weeks.
Just make sure you do your due diligence and choose wisely. I’ve listed several of the best rated Compare Quick House Sale / Cash Buyer Companies in this blog post.
Like I said, it’s not for everyone, but we all know that desperate times often requires desperate measures.
So there we have it.
I hope this overview has not only given you a better idea of the costs you’ll potentially have to stomach when selling your home, but also provided you with a couple of ideas on how to significantly reduce your costs!
Lastly, if you’re interested in learning more on the subject of selling homes, you may want to read My Complete Guide On How To Sell Your Home. It covers the entire process of selling of a home, from start to finish.
Disclaimer: I'm just a landlord blogger; I'm 100% not qualified to give legal or financial advice. I'm a doofus. Any information I share is my unqualified opinion, and should never be construed as professional legal or financial advice. You should definitely get advice from a qualified professional for any legal or financial matters. For more information, please read my full disclaimer.