When selling a property, it is tempting to think about the profits; the funds that you will receive to put towards your dream home, to move, to fuel your next endeavor. It is just as tempting to brush aside the expense. The reality is, though, that the cost of selling a house in the UK can be quite high and you could be contending with a laundry list of expenses that eat away at your ‘nest egg,’ if you will.
What are the costs associated with selling a house – and how can you cut them down to size in order to enjoy a larger share of the profits?
Typical Costs of Selling a House in the UK
We will look at the costs you can expect as you navigate the sales process, as well as some ‘extras’ for which you may have to be prepared.
Energy Performance Certificate (EPC):
£50 – £150 + VAT
Anyone selling a house in the UK needs an Energy Performance Certificate. This provides information in regards to the efficiency of your home, average energy costs and recommendations on improvements to reduce usage and cost. The EPC must be issued by an accredited assessor.
Estate Agent Fees:
0.75% – 2.5% + VAT of final sales price
Most estate agents operate on a ‘no sale no fee’ model. That is, if the house does not sell, you do not pay a fee. However, if you do sell, you will pay a percentage of the final price plus VAT to the agent or agency.
** Few people use online or hybrid estate agents. They charge a flat fee of £600 – £1500 including VAT, regardless of whether they sell your house or not. In fact, it’s a 50/50 shot that they will. According to recent research, they only have a 50% success rate. We would recommend not opting for this type of engagement.
£0 – £3000 + VAT (auction entry fee)
2% – 3% (commission on sale)
No sale no fee
Selling at auction is a possibility, but it can be quite a costly one.
Conveyancing Solicitor https://goodmove.co.uk
£550 – £1000 including VAT
It is not required to have a solicitor on board when you sell a house, but it is highly recommended as they handle complex legal issues. The fees for conveyancing solicitors can range significantly; some do charge based on a percentage of your house’s value, while others charge a fixed rate. The cost will depend on the professional, as well as factors like whether your property is leasehold or freehold and whether you have a mortgage.
Tip: If you are selling your house while simultaneously buying another, use the same solicitor for both.
£250 – £4000 + VAT
A professional company charges based on a variety of factors, such as the number of items to move, whether they must box up, the accessibility of your house, the distance they must travel, and whether you need storage. You can save money doing it yourself, but you will need to consider the cost of hiring a van, fuel, packing materials, ‘goods in transit insurance, and, of course, the time it takes to do all of this!
Preparing Your House for Sale
If you want to put your house on the market ‘as is,’ then you can discount this expense. However, if you want to increase the asking price, it may make sense to complete some necessary projects – or at least some sprucing up. Deep cleaning, landscaping, necessary repairs and redecorating can add hundreds to thousands of pounds to your budget.
If you currently have a mortgage, you may need to pay an:
- Exit fee: £50 – £300. This covers the administrative costs of your lender closing out your mortgage. Your lender may not assess this fee, so be sure to check your original mortgage agreement.
- Early repayment fee: 1% – 5% of loan amount. This information should be in your original agreement as well.
You may offer incentives to increase interest in your home. These may include:
- Free legal services: £500 – £1000
- Stamp Duty paid: based on house value
- Removals paid: £250 – £4000
Again, these are not always necessary or recommended, but it’s important to weigh all potential costs.
Capital Gains Tax (CGT)
Depends on the increase in value since ownership
If you own only one home, you do not have to pay CGT. If you have more than one property, you owe this tax but you can retain ownership of the home for nine months before liability comes into force. You can also deduct costs associated with improvements and buying and selling the property.
When you choose GoodMove, you reduce the cost of selling a house in the UK to virtual nil. Estate agent fees, solicitors’ fees, and other costs are taken on by our team (and if you choose to use your own solicitor, we even offer £500 to help). All you have to do is think about removals and what you will do next!
Contact GoodMove to learn more.