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The cost of selling a house

cost of selling a house

House selling costs are complex..

The cost of selling a house is made up of two different types of costs. Hard, cash costs directly related to your sale and "hidden" costs.



People rarely accept at face value the notion that the cost of selling a house involves "hidden" costs. But it does sink in after a while. With so much money at stake, who can blame them?

cost of selling a house

The hidden costs..

These hidden costs lie in payments you make while your house is for sale. These include mortgage costs (for most people), fuel bills, insurances and so on.



All the time your house remains unsold the costs associated with the house you no longer wish to live in are depleting your bank balance.

These can easily amount to thousands for an "average" home costing £100,000. These are sometimes called "soft" costs because you are already paying these. They are not additional costs.

The cost of selling a house..cash costs..

The direct cash costs of selling a house include the payments you make to the professionals involved in your sale. In addition, you may also have your  own marketing costs if you try to sell privately alongside selling through an estate agent. These cash costs are sometimes referred to as "hard costs". There is no doubt..hard costs hit you in the pocket.

cost of selling a house

Can you have a low cost quick sale? It all depends...

When it comes to balancing the pros and cons of each method of selling one guiding principle remains true.  You can rarely have both a quick sale and a high level of certainty - without paying for it.  The premium lowers if you sacrifice one or other.

What we mean here is that the cost of selling a house may not be monetary as such. But there will be a cost...Time..Worry..Hassle.... These can have financial impacts further down the line.

The cost of selling a house can be prohibitive for some house sellers who need a quick sale. For others it's simply not an issue.

Reducing the "ouch" factor..shelling out hard-earned cash to estate agents, mortgage companies and lawyers..

Reducing the cost of selling a house..

..One way of reducing the "ouch it's too expensive" factor is to sell your house privately. You can try this approach even if you need a quick sale.

It helps if you are confident of your abilities to project manage the exercise. You'll be more actively involved in your sale than you would be if selling through agents. So it's not for everybody. This route dramatically reduces the costs of selling a house, but it can be risky if you're looking for a quick sale.

Or you can use an online estate agent. For many people this is the perfect compromise.

Another option is to look for a cash buyer. This means using equity rather than cash to finance your sale. The great thing about using equity is that it's relatively painless. For many people it's cash they have never really had anyway. It only becomes cash when you "release" it upon the sale of your house. You also have more certainty when selling to a cash buyer and typically they will pay the costs relating to your sale.

The real value of a house sold through an estate agent - Based on an asking price of £120,000
Offer price £113,000  
Estate agents fees £2,000
Post survey price  drop £2,000
Solicitor's fees and disbursements £1,200
Mortgage payments until completion £4,200
Cash in pocket / real value of house £103,600

 

Hidden benefits

Another trap for the unwary..

Another source of unwelcome costs can be costs that are "duplicated".

These can come about if you chose to try to sell your house in more than one way. For more on this, please refer to the section on sole selling rights. Duplication of costs can even hit you if a house that was on the market with an agent is then sold at auction.

Hidden benefits? What goes around comes around..Off-setting a discount on your current house..for getting a bargain on your next house..

There is one hidden benefit of selling to a cash buyer that is often over-played by cash buyers but is true. Although not guaranteed.

If you arrange a cash sale of your property you then in turn become a cash house buyer. Being a cash buyer may well net you a sizeable discount on your next property purchase.

Why? For the average seller it means speed - you are no longer in a chain. Second, it means your funding is secure - there's no risk of a lender's valuation putting the sale in jeopardy. Or a buyer being turned down for a mortgage.

cost of selling a house

Anything is possible..

Of course anything can happen…The cost of selling a house and the price you get for it can be hard to pin down. But nothing is set in stone until the day of completion. The UK housing market is fickle. Buyers even more so. But we’re dealing here with generalities and probabilities. It’s ultimately a numbers game and like any numbers game, you can play it to win it. People do. The cost of selling a house varies tremendously.

We’re not suggesting you turn selling your house into a military campaign…but it does help. Nobody likes the prospect of shelling out for the cost of selling a house. But the costs can be reduced.

 

 

 

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