The basics of house selling costs
Ok, let's kick things off with the basics, shall we? There are a number of costs that you’ll need to keep on your radar and I’ll go through them now…
Estate agent fees
This is the big one, if you’re selling on the open market. When you talk to the average person in the street about the cost to sell a house, this is the one that most people will think about first.
Now, every estate agent is going to be different, and their fees could depend on your location and the type of service you choose. The majority of agents will charge you a percentage of the final sale price, which will need to be paid when your property is sold.
For a sole agency contract – when one estate agent markets your home – you should work on the agent taking between 0.75% to 3% plus VAT of the sale price. To help you understand just how much that is, here’s a little bit of maths for you; on a £200,000 house sale, that's anything from £1,500 plus VAT to £6,000 plus VAT. However, it’s not uncommon for some home sellers to be asked to pay up to 3.5% in commission. For that £200,000 house sale, that means the agent is taking £7,000 plus VAT. Here’s a table to summarise those figures:
0.75% of £200,000 | £1,500 |
1% of £200,000 | £2,000 |
1.5% of £200,000 | £3,000 |
2% of £200,000 | £4,000 |
2.5% of £200,000 | £5,000 |
3% of £200,000 | £6,000 |
3.5% of £200,000 | £7,000 |
With a multi-agency contract, you can use as many agencies as you like. You’ll only pay commission to the one who sells your home, but the average fee for a multi-agency contract is usually around 3%.
But it’s not quite as straightforward as choosing the estate agent with the lowest fee. Why? Well, a low fee might mean less time spent on marketing your home, and less time negotiating offers for you or having those all-important chats with buyers. That can mean you’re on the market for a long time, waiting for your home to sell. That’s far from ideal.
Meanwhile, a more expensive agent might be more familiar with the market and have a dedicated marketing team, but are you actually getting good value for money? What you need to do is research by comparing the options, speaking to different estate agents, and reading online reviews to find out if other people speak highly of the agent you’ve shortlisted. The website ‘allAgents’ is a great place to start. Reviews that mention the cost to sell a house will really help you to determine which one gives you the best value for money.
There are local agents and national ones and they’ll have their own fee structure, so you’ll need to weigh up the costs against what’s included.
For example, do they operate on a ‘no sale, no fee’ basis, or do you have to pay even if your house isn’t sold? If it’s the latter, then the ‘how much to sell a house?’ question gets even more complicated to answer. Some online agents charge an upfront fee to list and market your property, whether or not you achieve a sale. Ask them and find out. And whilst you’re asking questions, don’t forget VAT.
Ah, yes, VAT. That’s a cost that can’t be overlooked, and it’s one I mentioned earlier. VAT will usually be included in the fee quoted by an estate agent, but it’s best to check so that you don’t have a nasty surprise later.
Now, some estate agents might offer you a flat rate fee instead of a percentage fee. These are usually offered by online estate agents that charge upfront fees, rather than an agent you’ll find on the high street. Whilst a fixed rate might seem like a good way to save money, make sure you know exactly what you’re getting before you sign up. After all, you’re paying a commission, so you want to know what you’re paying for. Remember though, you won’t have to pay any estate agency fees if you use a cash buying company.
Marketing and advertising fees
I love to see high-quality photos when I’m looking at properties. Photos from different angles give me a really good idea of what I can expect to see when I’m there. And it’s the photography, floor plans and even video tours that can make all the difference when it comes to attracting buyers. Some estate agents will bundle the costs of these into their fee, while others might charge for them separately.
And let’s not forget that as well as the photos, an accurate description of your home will get the attention of the right buyer. But is a description included in the fee, or will you have to write it yourself? As ever, do check what you’re getting for your money and find out where your home will be advertised.
Also, you’ll need to ask the agent if they use Rightmove, Zoopla and other popular portals to help you to get a sale. Some agents may also offer to feature your property at the top of search results for more exposure, but this can come with an extra cost.
Oh, and don’t forget the offline marketing costs, too. This will include things like a ‘for sale’ sign outside your house, adverts in brochures or local newspapers, and leaflets about your home. Of course, these are all expenses that you won’t incur if you use a cash buying company.
Conveyancing fees
In short, conveyancing fees cover the amount you’ll pay to make sure the legal side of a house sale or purchase is handled correctly.
Conveyancing fees can be split into two parts. There’s the legal fees; what the conveyancer or solicitor charges for doing the work. Then there’s the so-called ‘disbursements’. This is what third parties charge for home selling services like searches. Some conveyancing fees only apply to sellers, while some only need to be paid by buyers.
According to research by comparison site Reallymoving, average conveyancing fees can cost around £2,000, although fees are usually linked directly to the value of a property.
The legal portion of the conveyancing fees bill covers the work done by the conveyancing solicitor themselves. The amount varies due to factors including:
- Where the conveyancer is based
- If you’re using a solicitor or a licensed conveyancer
- If you’re using an online conveyancer
- The price of the property
- Whether the property is leasehold or freehold
If you're selling a leasehold property, there is usually an additional charge of between £100 to £300 for the extra amount of legal work involved. Remember though, you won’t have these fees when you use a cash buying company.
Ok, earlier, I mentioned disbursements, so what are the main disbursements? Well, there’s the title deeds for starters. Then there’s transferring ownership. You’ll have to pay the Land Registry a fee for transferring your name with your buyer’s name on completion. The cost of transferring ownership is usually £200 to £300.
Mortgage and loan settlement costs
If you're waving goodbye to your mortgage before its term ends, you might face an early repayment charge. This could be a percentage of your remaining loan, as well as a painful mortgage exit fee.
However, most mortgages are what’s called ‘portable’, meaning that you can transfer or 'port' them from the property that you originally borrowed against to the home you're moving into. Now, porting your mortgage is relatively simple if you plan to move to a similarly priced or cheaper property. You'll just need to pay for a valuation and then undergo an affordability check. But if you're moving to a more expensive property, you'll probably need to borrow extra cash which can make porting a mortgage more difficult and costly.
However, moving house is a great opportunity to see if you can save money by remortgaging. This could be a savvy move if you've come to the end of an introductory rate and are now paying a higher standard variable rate. A mortgage broker can help you understand what deals are available to you and calculate whether the cost of remortgaging is worth it.
Energy performance certificate
An energy performance certificate, or EPC, is a certificate that shows how energy-efficient your property is. Think of it like a school report for your house because it ranges from ‘could do better’ to ‘top of the class’. An EPC is valid for 10 years and includes estimated energy costs, as well as a summary of your home’s energy performance-related features. If you need a new one, EPCs can cost up to £120. To check whether you already have an EPC certificate, go to the Gov.UK website.
Capital gains tax
You’ll need to pay capital gains tax, known as CGT, when you sell an asset that has increased in value since you bought it. Usually, when you sell your main home, or your only home, you don’t have to pay any capital gains tax due to what’s called private residence relief I know that tax is not as exciting as finding loose change down the back of the sofa, but it's important to check if this applies to you because if you are liable to pay CGT, it must be reported and paid within 60 days. As ever, find out by seeking professional advice if you’re unsure.
Home staging and repairs
Now, this covers all sorts of things and if you’ve got an eye for interior design, you can probably do a lot of it yourself by dressing rooms and making everything feel, well, ‘homely’. But what if your property needs some repairs and updating?
According to CheckATrade.com, the average UK hourly rate of a handy person is £30 per hour, but charges can range depending on their skill set and your location. And if you live inside a ULEZ area, the handy person might have to pay more to reach your property, so that’ll be an added cost. Factors such as the complexity of the job could see additional charges, too, but if you have a large job, or a number of small jobs that are likely to take a whole working day, it’s worth asking a handy person to charge you a day rate because that could be cheaper for you.
I’ve been talking about repairs, but what if your house needs big things like a new kitchen or bathroom, or even a garden makeover?
Well, the website Loft Era says the average cost of a new kitchen is around £10,500, whilst kitchen renovations can come in at just over £5,000. Meanwhile a new bathroom will cost on average £5,000, according to CheckATrade.com. The same website suggests you’ll need about £5,000 to £10,000 for a transformational project on a garden.
As you can see, the cost to sell a house can quickly add up! But don’t worry if you don’t want to upgrade your property before selling. You can always sell in ‘as is’ condition if you sell with a cash buying company.