The best way to sell your house?

By: Rebecca Coe


Selling my home through an Estate Agent is the best way to sell my house... isn't it?

Only a few years ago the estate agent was the one and only reliable method of selling your house, today you have many more options and, subsequently, the marketplace is a little bit more complicated.

In response to this change in market conditions many estate agents are using very underhanded tactics to trick you into using them. Tricks such as overvaluing your property to ensure you sign on with them. Remember, an overvalued property DOES NOT SELL for that amount. In all likelihood you will be stuck with the property for 6 months and when an offer does come in it will be dramatically lower than what you expect. By this time you will be desperate and the estate agent will suggest you go with the offer. The agent gets their commission based on the real value of the property whenever it sells; you will be the only person out of pocket.

What's worse, by marketing a property at an overvalued amount, you can actually delay the sale further. Even when the price is finally reduced to a m ore realistic level, buyers can be put off by the length of time a property has been marketed for.

Further evidence of this can be seen by the campaign by the consumers champion Which, http://www.which.net/moveit/index.html , for estate agents to clean up their act.

An alternative option, which the agents will advise strongly against, is a private sale to a cash funded investor.

These sales can be completed in days and with flexible completion dates to suit requirements.

Let's use an example to illustrate the advantages of NOT using an estate agent and selling direct to an investor.
£160,000
Market value as suggested by an Estate Agent
-£11,200
Typical offer through an estate agent is 7% less
-£3,760
Approximate fee for the agent (2.5% + tax)
-£1,000
Solicitors fees
-£9,700
Average house sale takes 6 months (assume 5% APR)
-£9,700
Average discount secured on next property by being a cash buyers

£126,640
Total real value of your home when you sell it.

As you can see there are a lot of hidden costs or lost opportunities (i.e. not being a cash buyer of your next property) in selling a property through the traditional methods of using an estate agent.

With investors they usually pay the solicitors fees and they have cash ready to buy your home so there are no delays and, as long as the offer is above the figure above, you could actually be better off selling for less money!

In fact, by being a cash buyer of your next home you could save even more money. This is usually 10% or so, which on the example above is about 16,000.

Technically, as in the example above, you could sell you're a £160,00 house to a cash buyer for 126,640, and be no worse off financially than by selling through an agent. In fact f you sold it to an investor for more than 127k you could actually be better off.

What's more you would have saved yourself 6 months of hassle, stress and worry. It is a well known adage that moving home is one of the most stressful things that someone can do, so by simplifying some of the money issues, can be a real emotional plus.

So, the next time your moving home, and an estate agent tells you a private sale is a bad idea, or you just need to sell your home quickly, think about the other options you have…that of the property investor.