What is a private sale?
Many people sell their homes privately when they do not want an estate agent, or any third-party agent, involved. Every step of the sales process that is usually undertaken by an agent including advertising, arranging viewings and negotiating a sale price would be undertaken by the seller.
What is a property auction?
Property auctions can take place at an auction house or through an online estate agent. Bids can be placed on properties that are up for sale. If the reserve price is met the house is marked as sold and the winner must pay a deposit. Property auctions are managed by a specialist agent or auction house.
The pros and cons of selling your house privately
If you are considering selling your home without the help of an estate agent or any third-party you should make yourself aware of the positive and the pitfalls.
A perk many private sellers enjoy is not having to pay any agent commission. On average, the cost of selling privately hovers around £500 plus legal fees – this is significantly less than the percentage fees on final sale price most estate agents demand. If you sold a property for £250,000 with a traditional agent and they charged 1% + VAT you’d be parting with £3,000 to cover their fees, and this is at the lower end of the spectrum.
When your home is listed with an estate agent it doesn’t get special treatment, your home competes against every other property on their books. With a private sale you know your home is the focus and you can put all efforts in to advertising. Nobody knows your property better than you which aids both marketing collateral and the viewing process. As you will manage the sale you can also conduct viewings when it suits you best.
Lastly, with the middleman removed, sale price negotiations can take place face to face rather than the backwards and forwards phone calls typical of this process when utilising a high street estate agent.
However, there are downsides of selling your home privately. Unless you’re in the know, you may be unaware of the legal requirements of a property sale, such as having an Energy Performance Certificate ready or legislation under the Property Misdescriptions Act.
If you make it through these hurdles, many people underestimate how hard selling a house is. Securing potential viewings is difficult, negotiating can be uncomfortable, buyers can let you down and hearing negative opinions on your home can be hard to swallow. On average, one in three sales falls through after the offers stage and whilst an estate agent can help rectify situations of this nature it can he harder to bounce back if conducting a private sale.
The pros and cons of property auctions
Like a cash house buyer , in order to purchase your home at auction, bidders must have their finances in order. Once a property has sold a deposit of usually 10% has to be paid immediately and the rest within a set period; often within 28 days but this can vary. For this reason, there is less likely to be any chances of buyers pulling out as they have already showed their commitment and intent by securing the property with the deposit. If a sale does fall through the seller gets to keep the deposit.
Once the hammer has fallen the property has sold and an auction can be useful for those wanting to sell a property in a specific timeframe. People who have inherited properties or want to sell homes that may require some TLC that they cannot afford also benefit from the option too.
As we have mentioned, auctioning a property does not guarantee a sale. If a buyer pulls out, you will have to pay again to re-advertise the property – the only bonus being you will have the deposit from the previous buyers to cover this.
Speaking of money, typically total fees to sell at house at auction vary between £2,000 and £3,000. These costs will be settled before your home even goes under the hammer, with a fee of £1,000 upfront and then a further £2,000 for a legal pack. Unless you’re a solicitor yourself you should utilise the expertise by hiring one to handle the technicalities. You should also expect to hand over 2.5% + VAT on any deposit received. Therefore, if you received a 10% deposit on a property sold at £150,000 – £15,000 – £450 would go to the auctioneers.
It seems as if selling your home at auction can give you a financial headache. This can be further exacerbated when considering your home might not fetch the price you wish. Whilst reserves are commonplace. auction houses tend to place reserves a little low to entice bidders; a tactic that doesn’t always pay off for sellers.
Is there an alternative way to sell my home?
Whilst it is undeniable that private sales and property auctions have their benefits, wouldn’t it be easier to be offered a complete selling service to suit your specific needs? Fortunately, online estate agents SOLD.CO.UK we have the answer. We have different routes to sale, enabling you to sell your house for free. Simply get a free valuation today or get in touch on 0800 566 8490.