Selling a house is more work than most people assume. There are several things to consider before you put your home on sale. First, you have to determine what would be the best asking price. Coming up with the asking price is also not as easy. You have to consider the cost at which you acquired or constructed the house. The current condition of the house, how old it is, the state of the real estate market and the neighbourhood should also be considered. Whether or not your house has been renovated in the near past is also a factor to consider. Once you have come up with the best asking price, you also need to consider the cost of moving out of the house, how you will advertise the house, and the kind of professional assistance you need. For instance, you may need to employ a solicitor.
When selling a house, you must hire either a solicitor or a licensed conveyancer unless you have the legal qualifications as well. A solicitor is a legal worker whose role is to deal with all the legal matters. A solicitor has to have legal qualifications and documentation. When it comes to selling a house, a solicitor or conveyancer takes care of all the legal affairs involved. The reason why you should hire a solicitor is that he will help you handle all the real estate dealings and make the process both safe and swift. However, note that a solicitor will not in any way help you find a buyer for your house any faster or slower. He also does not handle any issues outside the legal affairs related to house selling. A solicitor will guarantee that your home sale is permitted. A solicitor is also responsible for how fast the selling process will be completed, especially the paperwork.
How Much does it Cost to Hire a Solicitor?
The work of a solicitor is something that cannot be done with just anyone. Like any other service provider, solicitors have to be paid for their services. The practitioner can either charge you a flat fee or a percentage of the total value of the property. The average cost of hiring a real estate solicitor ranges between 500 and 1800 pounds. However, the price is influenced by many factors.
Factors Influencing the Cost of Hiring a Solicitor
Below are some of the main factors that affect the price tag for hiring a real estate solicitor;
- The Size of Your Property
This is one of the main factors that influence the cost of hiring the professional. Selling a bigger house would mean that you have to pay more money to the solicitor. The reason why this is the case is that there are more risks involved because more money is involved. This factor mostly comes into play if the solicitor decides to charge you a percentage of the total value of the house. If you own a large property, the value is more than a smaller one; hence the cost of hiring the solicitor is higher.
- The nature of the transaction
Another critical determinant of the amount of solicitor’s fees is the nature of transactions. This means that the more complicated the sale of the house is, the more money the solicitor will require. Properties that have an easy ownership structure tend to cost less in solicitor fees. On the other hand, those with complicated legal entanglements require a more careful legal planning procedure and more attention to essential details.
- Whether the property is a leasehold or not
If you are selling a leasehold house, you will also have to pay more money to the solicitor. The reason is that there is more legal work involved in such a sale. For instance, the solicitor will have to review the lease documents of the property. On average, you will end up paying at about 300 pounds extra in such a situation.
- The solicitor’s know-how and experience
Different conveyancing agents charge varying amounts. If you search the market for the various options, you will find that there is a difference between the costs, some are incredible, and some are minor. If you find a solicitor that is charging a meagre amount, you may want to consider the work history of the practitioner. Most of the time, a solicitor that charges quite low fees take more time to complete the selling process. Such practitioners work alone hence require more time to get the work done correctly.
On the other hand, those that charge a considerable amount usually work with interns and partners who help them cover all the essential details adequately and in time. Experienced solicitors with a lot of clients charge the average amount. Expensive solicitors provide luxuries like round the clock communication, which is not the case with the cheaper ones. When choosing between the different solicitors and the amount that they charge, consider your budget and the kind of service you require.
- Are you hiring a private solicitor or a firm
Hiring a firm in some cases is more cost-efficient than hiring a private solicitor. The reason is that firms tend to have more clients, hence pricing inadequate capital, thus eliminating the need to charge clients a lot of money. Firms also hire a lot of employees who can complete the soliciting processes fast enough so that they can take on more cases and earn more money. On the other hand, hiring a private solicitor would mean paying more money.
- The state of the real estate market
The costs of hiring an agent and a solicitor, among other buying and selling costs, are significantly affected by the state of the market. For instance, if the market is at a peak, the costs will be higher because the houses will sell at a higher price. Whether or not the home is likely to sell fast or slow also determines the cost of hiring a solicitor. For instance, at the moment, because of the Covid-19 pandemic, less people are buying houses. Therefore, solicitors are not charging as much.
In addition to the factors mentioned above, other services will increase the amount you pay for solicitors’ services. For instance, you may have to pay an extra 12 pounds for a copy of the title deed. This document will help you prove that you own the property. It may also cost you an additional 10 pounds to conduct money laundering checks. This check is done to make sure that the potential buyer is not claiming to be someone that he is not.
Choosing between a fixed rate and a percentage-based solicitor
As mentioned earlier, the cost of hiring a solicitor depends on whether or not the solicitor is a fixed rate or a percentage based one. A percentage-based solicitor will charge you a specific percentage of the amount that you will make selling the house. Before you decide on which one of the two is the best option, you must first determine the cost of your property. Also, consider the legal affairs involved, like whether you have some legal complications that may need to be taken care of. Once you have determined the above elements, consider the cost of hiring a fixed rate solicitor and how much money a percentage-based solicitor would take home.
If you are selling a small house with a less complicated legal history, hiring a percentage based solicitor could be the wiser decision. However, if you are selling a large home with an incredible value, it would be wiser to hire a fixed rate solicitor as it will help you save some money. Also, with a fixed rate solicitor, you have the opportunity to negotiate for a fair price. However, no one of the two is entirely better than the other. The trick is to analyze your situation before choosing between the two.
Importance of hiring a solicitor
- A solicitor will help you avoid some unclear problems that are associated with the sale of a house. For instance, if you find yourself signing a brokerage deal that does not take care of some significant legal issues. Some brokers will issue documents that shield them from some responsibilities that they should be taking care of. A solicitor will help you navigate the issue.
- A solicitor may also come in handy when it comes to making the purchase agreement. The purchase agreement is the most important document when selling a property. The solicitor will handle issues related to the purchase agreement. Such issues include whether or not the property has changed or if there is an addition to the property. Whether the changes are legal or not is also a matter to handle. Another issue is the legal outcomes of closing and how the payments will be made, to name a few.
- A solicitor will also help you handle the tax-transfer and the title deed transfer affairs.
- The solicitor also takes care of the closing process. The closing is the most significant event of selling or buying a house. The solicitor’s work is to prepare the closing documents like the title deed, among others. The solicitor will handle the process of transferring the deed from the seller to the buyers. If there are issues like mortgage balances to be paid, the legal practitioner will help the two parties determine who clears the balance and how it will be done. A solicitor will also oversee the signing of the closing papers. Finally, the solicitor will make sure the closing documents are properly executed, and the two parties understand the process.
Other Costs Involved in Selling a House
Hiring an Estate agent
According to most sellers, the most significant fee when selling a house is the real estate commission. Most realtors or estate agents ask for a commission of between 1 and 5 per cent. By commission, it means that you have to pay a percentage of the total amount for which you sell the house. For instance, if you sell the home for 250000 pounds, you may end up paying your estate agent up to 15000 pounds.
Estate agent fees should now be quoted to include VAT (20%). These rules came into effect from The Property Ombudsman in October 2016, however it always pays to check quotes are inclusive of VAT.
Sometimes, you may be able to talk your way to a lower commission. However, most real estate agents will only accept a lower rate if the house has the potential to sell quickly. Also, if the market is experiencing a high and the prices are relatively at a peak, it may be easier to get a lower commission.
Other than negotiating for a better commission, sellers can also save some money by listing houses as for-sale-by-owner. However, doing so means that you would have to take on all the responsibilities of the real estate agent, including showing and advertising the house. Some online listing platforms also do not allow listings from owners without an agent. This makes it difficult to sell and market the home.
The Cost of Repairs
It is easier to sell a house that is visually and also functionally appealing. Therefore, if your home suffers some damages, you may want to embark on some repairs. For instance, you can invest in some exterior and interior works. Doing so will help your house sell faster and also get you a better price.
It is wiser to conduct repairs while preparing for a sale rather than during the time when you have already put your house on sale. Failure to perform repair projects before selling will help you avoid meeting your buyer’s demands for repairs before completing a transaction.
The Cost of Staging
Staging originates in the US, who have been staging properties for many years to get their homes sold, and for the right price, and it is now catching on in the UK.
When selling a house, you must stage the home for viewings. Staging helps the house to market faster. During the process of staging, you may have to hire a professional company to put items like furniture inside the property. By doing so, you can show the potential buyers how much the house can accommodate, the beauty of different features and appeal to them on a personal level. Staging also helps to minimise the less attractive features of the property while highlighting the best ones.
You may need to hire an interior designer to make sure that you succeed in your purpose to attract buyers. You have to stage your property when taking photos to post on listings and when hosting walk-ins. For walk-ins, you may have to hire furniture and other home decorations and elements like curtains. Hiring such items is also an additional cost. On average, the cost of staging a house ranges between 25 and 75 pounds per hour for the consultation. The price, however, depends on the amount of space in the home and amount of furniture you wish to hire and the length of time it is required.
You cannot sell a house for which you haven’t completed mortgage payments. The amount you will spend paying off your mortgage depends on the amount you owe. Most of the time, the amount is a fraction of the amount that the house will bring in after selling. However, you can also use the proceeds you make from selling the home to clear the mortgage, if you cannot afford to clear the debt beforehand.
The Closing Costs
Most of the time, the closing costs are the responsibility of the buyer. However, on some rare occasions, the seller may have to foot the bill, especially if you are selling the property in a buyer’s market.
Normally the largest fees you can expect to pay will be if you use an estate agent on a commission fee structure, which can vary from 1 to 5% normally.
Solicitors / Conveyancers will normally charge between £500 to £1800 depending on the price of the property and complexity of sale. Before you decide on any estate agent, it always pays to get several quotes to see your options.