Selling any property is a major financial activity that can overwhelm both first-time sellers and seasoned investors alike. There are many requirements and considerations that need to be factored in to ensure that you get the best possible outcome.
In this article, we will answer the top four common questions asked by property sellers to help them make informed decisions regarding their property sale.
When is the right time to sell?
Unfortunately, there is no one size fits all solution when it comes to deciding when to sell a particular property. Most realtors will look at market trends, checking whether the real estate prices of an area are going up or going down. Generally, you’ll want to sell when prices are higher to take advantage of the demand.
Looking at prevailing prices is generally a good starting point when it comes to price projections. After all, regardless of which external factors may be affecting the prices, the numbers will eventually serve as the bottom line!
That being said, some sellers also stand by basing it on the seasons. Some people assume that the best time to sell real estate is during the first few weeks of Spring, a time when more people will be out and about, thus increasing the chances of them showing up at open houses.
Conversely, the cold winter months are generally considered as the worst time to sell properties, since people will be averse to travelling, packing, and trudging their belongings in the snow.
Should I go for a Solicitor or a Conveyancer?
Buying and selling properties in the UK can be overwhelming for even the most seasoned real estate investors because of conveyancing. This refers to the process of preparing documents for property transfer. Due to the complex nature of property ownership in the UK, most people
opt to hire either a solicitor or a conveyancer to handle the legal processes of acquiring property.
Both professions are trained to handle contracts, carry out local council searches, work with the Land Registry, and transfer funds. The main difference between the two is that the solicitor is also a lawyer. This means that if you foresee any legal issues in your property acquisition process, you will most likely need a conveyancing solicitor. The downside is that solicitors fees for buying a house in the UK can be relatively more expensive as compared to conveyancers.
Hiring a conveyancer will almost always be cheaper than going with a solicitor. If you’re not anticipating any complications, then a conveyancer is likely the better choice!
If you are unsure about the costs related to hiring either one, you can use our free conveyancing calculator! This will allow you to compare conveyancing quotes from SRA-regulated solicitors and CLC-accredited conveyancers in the UK.
How do I price my property?
To know how much you sell your property for, you will need to get it appraised. It’s worthwhile to note that the appraised market value may not necessarily be how much you can sell the property for—however, it is a good starting point to base your final figure on. In reality, your selling price could be slightly lower or higher depending on the negotiations with your potential buyer.
Unless you have significant experience in this regard, it’s best to leave the appraisal process to a professional appraiser near you. They will have an intimate local knowledge of prevailing market values, giving you a good estimate on the value of your property. That being said, there’s nothing wrong with getting a grasp of the overall process!
Generally, there are three basic methods used in appraising property market value.
Sales Comparison - Best used for valuing single-family houses and land, this method uses data derived from the prices of three or more recently sold and similarly-sized properties in the area. The accuracy of valuation depends on the properties you use for valuation. The most important areas to consider when choosing properties to compare are the size, location, and features.
Cost - This approach factors in the value of the land and the buildings erected on that property subject to depreciation, making it useful in selling newly-constructed and improved residential properties and commercial establishments. Sellers who use this method can choose among three methods: the square foot method, unit-in-place method and quantity survey method.
Despite some differences, the three methods all boil down to measuring three things: the cost of the land, the construction cost of buildings erected, and the depreciation caused by any physical deterioration, undesirable features, and other external factors that may affect the value of the property—such as being close to a factory or a noisy airport.
Income Capitalisation - This approach is usually used by investors to estimate the value of income-generating properties, such as apartment complexes, office spaces, shopping spaces, and other commercial establishments that are guaranteed to generate income at steady and predictable costs. Income capitalisation can be accomplished in two ways: Direct Capitalization and Gross Income Multipliers.
Appraisers who swear by Direct Capitalization will start by calculating how much revenue the property can make in a year, minus its annual operating expenses to get the annual net operating income (NOI). Next, they will calculate the estimated rate of return by dividing the property’s NOI by the current market value of similar properties. Finally, they will apply that capitalisation rate to the property’s annual NOI.
Gross Income Multipliers
The GIM is used to appraise properties that can be rented but are typically not bought for income generation, such as single-family homes. To get the GIM, divide the acquisition cost or purchase price of the property by the estimated annual rental income.
Once you have the GIM, you can get the estimated market value by multiplying the rental income by the GIM.
How much will it cost to sell my home?
Selling your home can incur quite a lot of expenses. This includes any improvements you will be carrying out to try and increase your property’s value. There is also the cost of removal services if the house you’re selling was your former residence.
However, most of the costs will come from paying your agent’s fees, the cost of getting an Energy Performance Certificate (EPC), and the cost of conveyancing. As mentioned earlier, conveyancing costs can vary among conveyancing solicitors and conveyancers. In general, conveyancer costs will be cheaper if you are not expecting to need the services of a solicitor in the selling process.
According to The Advisory, the basic costs of selling a house in the UK can go anywhere from £ 285 to £ 4,150, plus VAT, in EPC and removal costs alone. Agents can charge a maximum of 3% of the sale price plus VAT, while conveyancing fees can range anywhere from £550 to £1000, with VAT included.
To get instant online conveyancing quotes, use our free conveyancing calculator for the easiest time.
Due to the size of the transaction involved, selling property is not something that should be taken lightly. Unless you have professional real estate experience yourself, it’s best to work with expert agents, brokers and conveyancers to make sure that you are getting the best value for your property.
Conveyancing Calculator helps you make informed choices when it comes to choosing the right conveyancing solution for you. Our conveyancing calculator provides online conveyancing quotes provided by licensed solicitors and conveyancers in the UK. Use our calculator today and compare conveyancing quotes with ease!