In the UK 90% of homeowners automatically turn to an estate agent when it's time to sell their property.
The question is, "Should you do the same?"
If you need someone to hold your hand while you sell then yes, using an agent is the way to go - just make sure you use a good one.
For the bolder, there's no need to use one:
Each year 10,000's of property sellers choose to go done the private house sale route.
If you know what you're doing you can save yourself a ton of money (more about that later).
You don't have to look too far to find evidence that the UK is seriously dissatisfied with the service they get from our estate agency industry - nearly everyone has an estate agent related horror story!
In recent year there have been two major studies into the problems of buying and selling property in the UK:
The OFT study in particular highlights serious concerns over the way estate agents serve the public.
They found evidence of serious violations of the law and a massive 50% of consumers voicing dissatisfaction over the service received from their estate agent.
Most recently there was a damming expose by the BBC's Whistleblower program.
Clear evidence of bribery, fraud and deception were laid out for all to see. It was pretty damming stuff and very worrying if you're about to sell property.
Frankly, widespread lack of consumer confidence in estate agents is nothing new. Chances are you experienced poor Estate Agency practices when you bought your property!?
Of course not all Estate Agents are rubbish - it just seems that way.
Never the less, a good and honest estate agent can lighten the load when you sell property.
In an ideal world all estate agents will:
Given the number of complaints each year against our estate agency industry, the real questions are:
For most property sellers, using an estate agent is a bit of a lottery but of you follow our guidance you'll steer clear of all the major traps.
We'll also show you how to cut their fees and negotiate fair terms of business and get the best possible service.
First of all, let's make a few things perfectly clear about selling property privately:
A lot of people feel strongly that traditional Estate Agents don't deserve the fees they charge - We'd have to agree!
Property prices have risen dramatically over the last decade.
As fees are based on the percentage of your property's value, estate agents have been making a killing (over £4 billion last year).
The evidence presented earlier suggests not!
We definitely think it's worth a crack.
To sell property privately will cost about £500 (to do the job properly) and the amount of money you'll save really makes the extra effort worthwhile.
When you consider the estate agent's fee as a percentage of the actual profit you'll make from your sale (i.e. What you sell for minus what you bought for) you'll soon realise just how much money you're giving away.
Also, by selling property privately:
That last point deserves an explanation.
For many agents, a sale is a sale. The effort involved in negotiation an extra £5,000 - £10,000 for you, only gains an £100 - £200 more in commission for him.
It's not enough of an incentive for an estate agent to fight for your best price.
The recent bestseller by Steven J. Levitt (winner of the "John Bates Clark Medal", awarded to the best American economist under 40) on modern economics called Freakonomics has even shown scientific proof of this.
Well, here's a much overlooked property truism for you:
When a mortgage lender's valuation does not substantiate a buyer's offer, it's immediately obvious to everyone that the property is overvalued - Nobody likes to overpay!
The most common result of a "down-valuation" is that your buyer's mortgage application is refused.
The only way to sell your property is to lower your price because otherwise buyers will keep dropping-out at the mortgage valuation stage.
More and more people have realised that to sell property privately all you need are:
Figures from the Office of Fair Trading show that 1 in 10 homeowners now attempt to sell property privately.
The OFT interviewed a sample of these private sellers and their findings were dramatic:
There is even a recent study by the "Interactive in Media Retail Group", IMRG (The global e-retailing industry body) looking at the rise in popularity of selling a house privately.
They forecast that by 2010 nearly half (that's 700,000) of all property sold in the UK each year will be without the help of a traditional Estate Agent.
This is when you sell property with an estate agent but also use the Internet to try and find a buyer yourself.
Here's why this is such a popular option:
Word of Warning!
There are a couple of important things to consider if you plan on going dual:
Over the years we've heard a number of stories about how vendors have been caught out so we've written a guide that will steer you clear of making any mistakes.
This is definitely not for everyone!
It's certainly not the best way to sell property of an "everyday variety".
You stand little chance of selling for the best price.
Consider an auction if your house is different in some way.
Most people choose an auction because it guarantees a sale on a specific date (as long as it's the right sort of property).
Auctions are good for property that has the combination of being both unusual and sought after.
They sell for more than if sellers just deal with buyers on a "one to one" basis.
"The major disadvantage is that it's one of the most expensive ways to sell.
Typically, the commission for selling at auction is around 2.5% + VAT of your properties value.
If your property doesn't sell, you'll still have to pay £1,200 - £1,400 +VAT to cover the auctioneer's costs.
If you feel your property would sell well at auction, the best thing to do is find an Auctioneer and get their opinion.
Bare in mind that Auctioneers, like estate agents are not charity workers, they want your business. Take everything they say with a pinch of salt.
Before you commit to anything, make double sure your property is truly an actionable property:
You may even find it useful to visit an auction or two and see what kind of property sells well.
Where to Get Further Information?
This is quite a useful resource as you can request information from auctioneers about selling property by filling out a quick online form.
The service is FREE, just follow the link and then click on "sell your house at a property auction".
These guys publish the details and results of all lots sold at property auctions across the UK.
The Royal Institute of Chartered Surveys website has some decent information on selling property at auction.
Really this method of selling should only be considered if your need to move is greater than your need to sell for the best price.
Typically you find yourself in need of a fast cash sale if:
Exchange of contracts can take anywhere between 24hrs - 7 days.
Completion can then be fixed to suit you.
Anywhere between 20 - 35% below OMV (OMV stands for Open Market Value)
"Open market value" is the price you'd get if you sold through an estate agent.
The cash buyer using either a Chartered Surveyor or the independent opinions of 3 local estate agents will assess this.
"Open market value" is not the valuation figure an estate agent has given you when trying to secure you as a client. That figure is just part of their sales pitch and often very inaccurate (read about inaccurate property valuation).
Despite what the sales spin may say on their websites, across the industry the "cash buying business-model" only really starts to work when property can be bought at a 17% discount (and this is what you should be prepared to accept before contacting any cash buyers).
In almost all cases the first offer you'll receive will be at a 20% discount level - negotiate, it'll be worth it!
Here's an example of what you can expect:
Cash buyers provide a service - One that gives you a certain and speedy sale.
As you are no doubt aware - certainty and speed are rare commodities when selling property - you have to pay for them!
How much of a discount you eventually sell for depends on which company you choose to run with and how saleable / rent-able the company feels your property is.
If your property is "right on target" in terms of what the company is looking to buy, you can get lucky and be offered anywhere up to 90% OMV - this is rare though and you should not enter into this with that sort of figure in mind.
Again this depends on which cash buying company you choose to do business with.
Many of the large, nationwide companies insist you pay for a surveyor's valuation before they'll make you an offer.
Here at TheAdvisory we feel this is unreasonable and would recommend that you steer clear of any company demanding an upfront charge.
We would also recommend that you find buyers that will pick-up your legal fee (always throw that into the negotiations).
When someone needs the services of a cash buyer, it's normally because they're in a bit of a fix.
There are lots of people out there willing to take advantage of your situation.
Be very careful with whom you choose to do business!
There is one scam in particular that should immediately have your bells ringing:
Anyone guaranteeing to pay between 90%-100% OMV is LYING!!
They are trying to get their foot in the door and they can be very persuasive!
Before you know it, their promise of "full market value" has disappeared.
They'll string you along (probably telling you that they're waiting on the Local Authority Searches to come back) until you're absolutely desperate to sell.
At the last minute (when you're most vulnerable) their offer will be reduced (often to well below the standard 20% discount rate) and you'll have no choice but to sell for much less than if you'd gone with an upfront and reputable company!
As you may know, this website is written and contributed to by property professionals from some of the UK's most successful house building companies.
Because of our involvement within the Property Industry, we know of (and have dealt with) many reputable cash buying companies across the UK.
We are happy to make a recommendation of which cash buying specialist best suites your situation.
For example, if you're facing repossession you should definitely get in touch because we know who the only guys in the country are that can stop repossession in 2hrs flat!
Because all cash buyers (and rent-back specialists) have different buying criteria, if you need a recommendation, simply email us with some basic details about your property:
We promise to help you identify the most suitable cash buyer (or rent-back specialist), within 24 Hours (we're usually a lot quicker though).
To request help finding a reputable cash property buyer, send the above information in an email to: