Selling investment property online
Do I need an estate agent?
I don’t sell my investment property very often. Given the historic returns for property investment why would you? However, it does irk me to have to pay the 1 -2% of the capital value of the investment property to an estate agent. In this online world surely there is a more efficient way of selling investment property? Lets face it everybody finds investment property to buy online through Rightmove or one of the other property portals. So surely it’s possible to sell your investment property online too?
There’s more than one way to skin a cat!
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 investment property recently but it’s a very expensive business. 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.
How much will it cost to sell my property?
Take for instance the average UK house price, which currently stands at just under £226,000 (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.
A Which survey in 2011 indicated that the UK national average cost of to sell a house was 1.8% plus VAT. The average costs of selling your home may be falling as a more recent survey by myhousemove suggested the average fee of 1.3% + VAT for selling a property. This may be prompted by the emergence of the online no frills services by the like of Purple Bricks and Yopa.
What do estate agents actually do for all this money?
Well for a start they prepare particulars which sets out the nice things about your investment 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 landlords still think this is worth shelling out over three and half grand to sell your investment property- 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 estate 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 and advertising your investment property online.
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. The market is now dominated by the 2 big players Rightmove and Zoopla.
Getting your investment property on Rightmove or Zoopla
Rightmove is still the market leading property portal with over a million properties listed but Zoopla is snapping at it’s heals. To be honest I never liked Rightmove just because it’s functionality was clumsy and not well thought out. I’m glad to say it has improved in recent years but I still prefer Zoopla.
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 Yopa allows you for under £1000 to be featured on all the major property portals, including Rightmove. Gone are the days when this fee would only apply to the cost of listing the property. The fixed fee covers all the advertising costs and even the sale board. For a little bit extra it’s possible to have all the viewing done by a local estate agent.
One advantage of conducting the viewings yourself, the investment 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.
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.