Do I Need An Estate Agent? - Uk Landlords
There’s a phrase that is often used which goes ‘there is more than one way to skin a cat?’ Obviously this expression shouldn’t be taken too literally for fear of upsetting the UK’s 6 million cat owners. Not only that where would you start, the tail, the head, the stomach perhaps?
I don’t know whether you have sold a property recently but it’s a very expensive business. I’m currently in the process of doing just that. At the very least you will have to pay a commission of 1% of the selling price, probably for most, this figure is going to be closer to 1.5%. Those people looking for a specialist high value service could end up ‘forking out’ nearer 3%. The upshot of all this is its going to cost thousands.
Take for instance the average UK house price, which currently stands at just under £200,000 (Land Registry figures). The sale of such a property paying say an average commission of 1.5% would set the seller back three grand. On top of this, VAT is payable at 17.5% taking the total to just over £3500; not a ‘trifling’ sum by anybodies calculations.
The question is what do they actually do for all this money?
Well for a start they prepare particulars which sets out the nice things about your property, they take a few photos and occasionally advertise your property in the ‘local rag’. They then conduct some viewings and act as the intermediary between you and the prospective purchaser. Once a sale is agreed they should chase them to make sure that the transaction goes through quickly and efficiently. So how many of us still think this is worth over three and half grand- not many I suspect.
For years there has been very few alternatives to this time honoured arrangement. However, the advent of the Internet has changed all this. Ask any agent privately and they will admit that marketing is no longer a case of a carefully constructed phrase or an elaborate sales campaign. It’s all about the Internet.
The fact is research indicates that between 85-90% of us use the Internet to find properties that they are interested in. The result has been a ‘mushrooming’ of property marketing websites over the last few years; at the last count they numbered around 130. These sites advertise your property for between £20-200 and can potentially save you thousands in estate agency fees.
The drawback is that many have only a handful of properties and the truth is they are rarely accessed by the mainstream property buying public. Therefore, any potential cost savings in using these sites has to be weighed carefully against the need to get the maximum ‘marketing bang’ for your money. Some of the bigger sites such as House Web, House Ladder, My Property for Sale will get you on to the larger property sales portals such as Fish4 & Property Finder.
In reality though, the property sales market is dominated by one portal - Rightmove. It claims to account for 80% of page views in the property sales market. This site, which after all was originally owned by four estate agents doesn’t allow non estate agents to feature their properties. This means that access is denied to the pure Internet marketing sites referred to earlier. The fact is that if you really want to give your property the maximum marketing exposure, it’s all about getting your property onto Rightmove.
Property Hawk has however found one site, which allows you to do just that without having to go through a traditional agent. The company called Housenetwork allows you for just under £500 to be featured on all the major property portals, including Rightmove. The only drawback for the seller is that the two part fee structure involves the payment of an upfront and non refundable £199 (+ vat) marketing fee for preparing the property details. The company will then arrange viewings for you, although you will be responsible for carrying them out and negotiating on any price reductions, etc.
On completion you have to pay a commission of 0.25% capped at £199 (+ vat), which means that your total bill should never be more than £500. They do also offer a ‘no fee no sale’ package with a 0.5% rate of commission. Both packages should be particularly attractive to landlords, who are frequently not under the same time pressure to sell and therefore can afford to wait for the right buyer to come along.
The other advantage is that because you conduct the viewings yourself, the property can remain let during the sales period. On agreeing a sale, the landlord just has to issue the appropriate section 21 notice and the 2 month period should roughly coincide with the standard sales period of about 8 weeks. The drawback off course with all this is if the sale falls through. Then, you could be left with a property that is standing empty and you are not receiving rent for. This is a risk, but then to get rent for part of the sale period is better than none at all.
The ideal situation off course would be to sell without having to remove your tenants at all. There is a site called Landlord Trader, which allows you to do just that. The site advertises itself as the ‘UK leading property exchange’ which is not surprising given that as far as I am aware, it’s the only one. It is specifically aimed at investors, so having a tenant is an attraction as a posed to a problem. It’s possible to advertise your property for between £30-50 with an additional £200 payable on completion.
Finally, ever considered auctioning your property? Now you can also do this online all for under £50. Have a look at auctionyourproperty.com to see how you can sell your property to the highest bidder. The only word of warning is that as the site is new, I don’t think there is a huge amount of ‘traffic’ at present.
In summary, it appears that just like cat skinning, there is more than one way to sell your property. With all these choices, isn’t it time you thought seriously about a fresh approach? I’m certainly considering these alternatives when I look to dispose of several properties next year. Finally, if you are worried about Tibbles don’t; she is sleeping peacefully and still has a fine crop of ginger fur.
Chris Horne has 20 years experience as a property professional having worked for companies such as English Partnerships and Drivers Jonas as a planning and surveying consultant.
He now works full time as a investor and property developer.
He also has developed the site Property Hawk targeted at UK Landlords it provides FREE Property Management Software.
Property Hawk also includes a mass of Buy to Let targeted information,FREE Tenancy agreements , Inventory Forms , financial and management tools. Its primary aim is to make managing property simpler for UK Landlords.
Tags: buy to let, free ast, free tenancy agreement, inventory, landlord, tds, tenancy agreement, tenants