The cheapest way to sell a house: Estate agents vs house buying companies
Many factors need to be considered when trying to sell a home, from how long it’s going to take to the fees that are going to be paid. For some properties, fees and commissions can add thousands to closing costs, leaving less money in the seller’s pocket. Add this to the real estate market’s subjectivity, and homeowners may find themselves in a compromising position when wanting to sell up.
To help establish the cheapest way to sell a house, here is a look at the major differences between house buying companies and estate agents
House buying companies
A house buying company works by bringing a cash offer for a property, without it having to sit on the market. These “buy my house” companies provide genuine cash offers for property, with a guaranteed completion. This means no property will be left languishing in the listings for months at a time. On average, the sale of the property is finished within 7-14 days.
House buying companies cover all the legal fees (solicitor and further legal) and RIC survey fees, and they offer no selling fee, meaning the offer after the survey is what the seller will bring home. As many house buying companies also purchase the home in “as is” condition, vendors will never have to complete repairs for the property to sell. Although the average offer from a home buying company is less than it would be with an agent, covering the fees that occur with selling a property works to offset the cost.
This selling method works well for those needing to relocate, wanting to sell their home quickly, properties needing extensive repairs, or those needing to stop a repossession. With both secured finances and an expedited timeframe, house buying companies can be a reliable option for those wanting to start and complete quickly.
An estate agent works with a seller to connect interested buyers to their property. Using traditional advertising and marketing techniques, the agent will promote the property through their network and find a qualified buyer. They agent will take the seller’s interests to heart, trying to secure an asking price that’s comfortable.
Multiple offers are typically found in a seller’s market when there are more buyers looking for new homes than there are homes for sale. When it’s a seller’s market, bidding wars (multiple offers from multiple candidates) can push the sale price above asking price. In a buyer’s market, there are more houses for sale than there are interested people, making candidates selective with their offers. A vendor trying to sell their home during a buyer’s market may find their property sits without offers for months, extending the moving process.
An estate agent makes their money on the sale, with basic commissions starting at 0.7% to 3.0%+VAT. These fees are typically paid when the property has sold, although it’s important to check with the estate agent when signing. It’s also a good idea to ask about any additional fees or costs for the sale of a home.
Using an estate agent brings the potential for multiple offers and a slower moving process, though the final sale price may be higher. The agent will work with potential buyers to view the property and will filter offers, acting as the seller’s liaison in the process.
The bottom line
While both methods offer distinct advantages to the seller, understanding the timeframes and fee structure is important before making a decision.
For those willing to wait for the right offer (which can take years on the market), using an estate agent may be the best option. If it’s important to sell quickly and without the fees commonly found with an agent, house buying companies offer a fast and zero-fee option.
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