The agent dilemma
It’s been a while since I’ve sold one of my buy-to-let properties, but the potential of a new buy-to-let / holiday home in the Peak District means that I’m looking to offload one of my existing BTL properties.
To achieve the maximum selling price I’m in the process of giving the place a spruce up. Giving it a plain and neutral paint job to help the property appeal to the letting market – the light, bright, neutral approach works with both landlords and private buyers.
I’ve just had the remainder of the window frames replaced, along with new carpets, so a good clean and a few bits of general ‘tarting up’ around the edges should see the property looking its best for market.
Should I use a high street estate agent or use an online estate agent?
The internet is changing property sales. There are a number of low cost options for landlords such as purplebricks, which allow landlords to market their buy-to-let property for a fixed cost – currently £695 plus vat.
Another online estate agent Emoov which offers a similar service has a standard listing charge of £495 a property.
Both of these online estate agents offer free valuations and will get the property listed on the major property portals – Rightmove and Zoopla. Both services also include photography and drawing up floorplans as well as scheduling viewings.
Emoov even offer to negotiate with potential buyers, and promise to outperform the UK’s average estate agents sales price ( though I’m not sure how easy that is to prove / disprove).
A downside of opting for an online estate agent is the nature of the payment structure. Both services charge a flat rate service fee. A flat rate falls more heavily on a lower value property than a higher cost home and with the majority of buy-to-let properties coming in at the cheaper end of the market, maybe landlords won’t benefit in the same extent as other sellers.
Another concern is that the fixed fee appears to have to be paid whether a property is sold or not.
One of the online agents website’s states that payment will be made:
- When the property sells and the legal process is complete
- If you withdraw your instructions for us to market the property
- If you withdraw from using eZie® Conveyancing
- Ten months from the date when you agree to use our services
So if a landord only wants to speculatively market their property for sale, then this might be a real ‘put off’. At least with a traditional high street estate agent, if a property fails to sell, there’s nothing lost, and a landlord can continue to rent it out their property without any agency fees incurred.
Using an online agent is much like using a property auction house which requires an upfront entry fee payable. Therefore a landlord needs to feel there is no going back.
To date I’ve not used one of the online estate agents, but given that the estimated commission for a traditional high street estate agent would be between 1.2% & 1.75%, equating to a fee of approximately between £1200 & £1750 on my estimated selling price of £1000,000, there could be savings to be made.
Using these figures I could save over £700. I’ve not tried this type of service before but I’m considering giving it a go this time. The one thing that makes me a little nervous is the lack of flexibility should the property not sell at a reasonable price.
What have other landlords experienced with online lettings agents?
Now the next cost I need to consider is any landlords capital gains liability.