Selling a home can sometimes be an opportunity to make money. However, it’s important to also consider the various costs involved when selling up. Below are just some of the expenses involved when selling a home that you will need to budget for.
Agency fees/commission
Most people use an estate agent to help sell their home. If you do choose to use an agent, you’ll have to pay a seller’s fee or commission. This is usually paid after the sale is made - some of the money you get from the buyer then goes towards the agent. Technically, it’s the buyer paying the agency fee/commission, however it comes out of the value of your home so you’ll end up earning less money from the sale. Most estate agents charge about 6% commission.
Energy performance certificate
An energy performance certificate (EPC) may need to be acquired when selling your home. This is a document that assesses the energy usage of your home to ensure that it is energy-efficient enough. EPCs typically cost between £60 and £120. If you bought your home less than 10 years ago or have had a energy assessment within that time, you’ll already have a valid EPC and won’t need to apply for a new one. There are sites online that can offer more information on property certificates such as EPCs. Other certificates may be necessary when selling certain other types of property.
Solicitor fees
To handle all the paperwork when selling up, it will usually be necessary to hire a solicitor. This solicitor will also be able to help with any paperwork involved when buying a new property. There are solicitors that specialise in this process (known as conveyancers) and there are more general solicitors that may handle property matters along with other areas of law. You should consider whether you want to hire a conveyancer or a general solicitor. Legal fees typically cost £850 to £1500, not including local search fees.
Property taxes
In some cases, you may have to pay tax on your home. This could include capital gains tax if it is a second home or inheritance tax if it is a property you recently inherited. A financial advisor may be able to help you understand these taxes so that you can budget for them (the likes of inheritance tax could be a very large sum).
Moving and buying costs
It’s likely that you’re not only selling a home but buying a new one. You should also consider the various costs involved in buying a new home - this could include cash on a new property/a down payment on another mortgage, stamp duty tax, a home survey and various other fees. You may also have to consider the cost of hiring a moving company to transport your belongings to your new home. The value of your home may be able to cover all of these costs, however you may have to pay certain fees before you sell your home. Bridging loans are sometimes an option for covering these expenses, but may not be ideal if you want to avoid debt.
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