How much does it cost to sell a house?
4 February 2021
Cost of selling a house UK
Basic fees to expect: Conveyancing & third parties
One of the initial costs of selling a house is paying conveyancing fees, which you will pay to a qualified conveyancer or solicitor. Two types of costs are encompassed by conveyancing fees – the legal fee charged by solicitors to deal with the groundwork, and disbursements, which are charged by third parties. Exact figures vary from solicitor to solicitor, but you can expect to pay a ballpark cost of £720-£1,500 including VAT. For an up-to-date example of what you might pay, get in touch with our expert conveyancers today Click here
Estate agent fees
Estate agent fees, which normally adhere to a `no sale, no fee` motto, are another basic cost that you will likely pay during the process of selling your house. This bracket of fees is known as disbursements or third party fees – and although individual solicitors will have their own way of charging these, typically they will pay estate agency fees to the estate agent once the sale of the house has been finalised.
Exact figures range from agency to agency, but you can expect to pay a roundabout percentage of 0.5%-3% of the sale cost, excluding VAT. For instance, if you sold your London 2-bed detached for £775,000- you’d pay between £3,875 and £22,250 to an estate agent as part of the third-party fees. Typically, house sellers pay 1.18%, which is £3,186. This is based on the average sale of a home valued at £225k. For an exact amount of how much you’ll be charged in estate agency fees, it’s best to pinpoint the agencies you’d prefer to hand over to, and then quiz them on their unique fees. If you decide to use multiple agencies, you’ll pay for a multi-agency agreement, which is usually 2%-3% of the sale cost. The pros and cons of using multiple agencies is a subject you can discuss with your conveyancer or solicitor, and they will be able to give you a non-biased opinion.
Though they are not a mandatory cost when selling up, most people will opt to pay a removal business to pack up, move, and reassemble the contents of their home. The cost of hiring a removal business varies, and you can expect to pay between £250 and £4,000 excluding VAT. Typically, house sellers using a removal service tend to pay around £700. This is based on the average sale of a home valued at £225k. Hiring options range from a Man with a Van to a business which can provide a full team and packaging materials. If you’re not sure which option is best for you, perhaps weigh up the benefits of each. For instance, a one-man band is cheaper, but a team would get the job done quicker.
Energy Performance Certificates (EPC)
Another mandatory cost of selling a house is the price of EPC, or Energy Performance Certificates – documents detailing information on your home’s energy efficiency and how to reduce energy usage and save costs. EPC certificates are compulsory, and homeowners are required to have them before putting their property up for sale. Though they can only be acquired through credited accessors, EPC certificates are generally affordable and cost between £35 and £150 plus VAT. Most home sellers purchase their EPC certificates for around £75 plus VAT, and apply for them either directly through the EPC Register website, or through a third party seller online.
Additional fees to expect: Mortgage fees & tax
Mortgage Exit Fee (MEAF)
Once your mortgage is paid and your house is put on the market, you may be charged a Mortgage Exit Fee, or an MEAF (which means Mortgage Exit Administration Fee) – by your mortgage lender. This is just an admin fee that lenders dish out in exchange for doing paperwork to close your file. The price of an exit fee ranges between £50 and £300; you’d need to contact your lender to clarify the details of how much you’re going to pay. It’s worth noting that not all lenders charge a fee to close your mortgage file, but, it is a potential cost that could creep up on you if it’s not been factored into the budget you have set aside to sell your house.
Early mortgage repayment charge
An early mortgage repayment fee is pretty self-explanatory- it just means you might be charged for paying the remainder of your mortgage back early in order to put your house on the market. The reason for this is because lenders bag an interest rate based on your mortgage deal, so cutting your three-year fix, five-year fix, or whatever you have agreed upon early could lose them money.
The fee for this is generally 1%-5% of your agreed loan amount and is often tiered, which means you’d pay 3% in year one, 2% in year two, and 1% in year three, say- if you had a three-year fixed contract. Under Financial Conduct Authority (FCA) rules, your mortgage agreement must express early repayment charges as a cash value.
The cost of your early mortgage repayment charge should be detailed in your mortgage offer paperwork. If it’s not, then it’s best to contact your lender for further information about how much you will pay. An early mortgage repayment charge applies to paying back the remainder of your mortgage in full, or just part of it.
Capital Gains Tax (CGT)
Capital Gains Tax (CGT) applies to every homeowner with more than one house on the market; but, it is only charged if you sell a property other than your own home (permanent residence). If you make a sale on your permanent residence, though- these fees will not be charged. The fees associated with Capital Gains Tax are based on the amount your home has increased in value while you’ve been the owner. If you are confused about what Capital Gains Tax is or how much you’ll pay, you can speak to your conveyancer or solicitor for confidential advice.
Extra optional fees
Throughout your house selling journey, you may experience other fees, which will always be outlined to you by your qualified conveyancer or solicitor. These fees are optional and won’t apply to everyone who is in the process of selling a house. Extra fees might include:
- The cost of preparing your house for sale
This is what you’d pay to work on the aesthetic of the property you are selling, in order to put it in the best possible light to a potential buyer. If you prepare your house for sale, it could lead to a quicker sell or even more attractive offers. The tasks involved with preparing a house for sale can include anything from fixing broken taps and skirting boards, to giving rooms a fresh coat of paint, or even just weeding the garden and repotting new plants. Of course, this all comes with a price tag. It’s up to you whether you do these jobs yourself, or outsource them to an agency specialising in painting & decorating, DIY, or home interiors.
It’s worth remembering that doing your own house sale prep will be cheaper and quicker, however professionals might give your home the edge it needs to make it sell. If you are a DIY pro, though, you’ve got the best of both! The cost bracket for doing up your home is usually between £50 and £5,000; but in all aspects of home selling, you get what you pay for!
- Seller/buyer incentives
Another cost that not all home sellers will experience, is incentives. Incentives are used when a home is struggling to sell, and so a little persuasion is needed to help shift it into the hands of a good buyer. Incentives do depend largely on what is going on in the housing market, and while they are not always dictated by this, they can be influenced by it. Examples of incentives used by home sellers, buyers, and estate agents include:
- Interest rate buydown – where the buyer asks for lower interest in the first 5 years of the mortgage contract
- Closing cost credit – which helps the buyer’s end of the expenses when it comes to closing Escrow, and they’d normally be returned in credit
- HOA dues credit – where the seller can get money back for unpaid associated household costs that were not used up
- Small gifting incentives like high street vouchers, furniture packs, and more
- Small fees paid like Stamp Duty Tax, a couple of month’s rental income paid, and more
For more details on incentives and other ways to help you sell a struggling property, you can always ask your conveyer or solicitor. Get in touch with them here, or call 01267 239 000 for free, confidential advice.
The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.