When looking at the quickest way to sell a house, there are several different options to consider. As with any route to the sale of your property, there are numerous pros and cons which could impact timing and price. We will now take a look at the various options and potential issues.
The estate agent now comes in two different guises, those who take a hands-on approach, offering a comprehensive package (traditional estate agent) and those with listing only services (online listing companies such as RightMove). There are several issues to consider when looking at the pros and cons of using an estate agent.
Traditional estate agent
The traditional estate agent will offer a complete package that can take in an array of services such as:-
- Property valuation and marketing price advice
- Access to their list of investors and market contacts
- Communicating with potential buyers and organising viewings
- Assisting with negotiations between buyers and sellers
- Creating competition amongst buyers
- Maintaining momentum with ongoing communication
While some estate agents will market themselves as “traditional”, the reality is that all estate agents will use the online marketplace to varying degrees. This assists with widespread promotion and helps to create healthy competition amongst buyers. Depending on financial viability, i.e. the value of your house, you may decide to consider using multiple estate agents to sell your property. In this instance, there are numerous pros and cons to take into account:-
Sole estate agent arrangement
- One point of contact can simplify communication
- Lower fees compared to multi-agency agreement
- No sale, no fee arrangement
- Single estate agency agreement can limit exposure
- Individual estate agents traditionally sell only 50% of houses they market
- Sole agency agreement can prevent switch to multi-agency sale
- Potential for add-on charges
Multiple estate agent arrangements
- Competition amongst estate agents can push prices higher
- Ability to tap into more than one agency sales channel
- Potentially wider exposure for sales listing
- No sale, no fee arrangement
- Agent fees are traditionally twice that of a sole agency arrangement
- Multiple lines of communication can lead to delays
- Limited benefit if the housing market has cooled
- Potential for additional charges
Listing only estate agents
It is safe to say that the Internet has created an array of different options for those looking to sell their home. One relatively popular path is listing only estate agents, which also have pros and cons.
- A one-off set fee, relatively cheap
- Potentially huge website traffic
- Additional regional/specialist sectors
- Do not offer a comprehensive service
- Potential for add-on fees
- It can be challenging to stand out from the online crowd
- High-volume, low fee business model is impersonal
Average completion time using sole/multiple estate agents
The time taken from initial listing to completion of a property sale can vary significantly for many reasons. This route is not usually the quickest way to sell a house but can help obtain the best price. On average, properties without a chain tend to be completed in around six months. Transactions involving a chain of buyers and sellers can be extended, often by many months. On average, it tends to take up to 9 months for completion.
Sell at auction
If you are interested in property, you have probably watched one of the many property programmes on TV. They follow the process from the purchase at auction right through to redevelopment and sale/rent. Consequently, the idea of selling your home at auction has certainly gained traction in recent years.
In this section, we will look at the process of selling property at auction and the pros and cons as there are a lot of misconceptions. While this may be one of the quickest ways to sell a house, it is not an instant sale.
The pre-auction process
The process itself is relatively straightforward:-
- Approach an auction house about the sale of your house
- Provide information such as ownership status, condition of property, mortgage and debts secured against your home
- The auction house will then carry out standard HM Land Registry checks and ask you to complete anti-money laundering documentation
- At this point, you would be provided with a “desktop” value of your property and an achievable auction price
- While not necessary, you may request a valuer visits your home to give a more detailed assessment of the potential price
At this point, there will typically be a cooling-off period to give you time to consider not only the process itself but also the value assessment provided. Assuming that you wish to proceed, both parties will sign a legally binding contract of sale, which will include:-
- Auction date
- Fee structure
- Marketing plan
- Guide price
- Reserve price
You will also need to instruct your solicitors to create a legal pack that will be available for download by interested parties before the auction. In some cases, you may need to ask your solicitor to be present at the auction to answer any questions.
There are several issues to be aware of when considering the fee structure of the auction house you have approached. Traditional fees include:-
- Auction fee, generally between 1.5% and 3% of the property value
- Marketing fee, anywhere up to 1.5% of the value of your property
- Auction room hire, usually up to 1.5% of the property’s value
- Conveyancing fees, anywhere between £500 and £1500
Most auction houses will have a relatively competitive traditional fee structure, but there may be hidden extras. Consequently, it is vital to shop around for the best auction house regarding fees, success rate and the type of property you are looking to sell.
Promoting your property
You must research the most appropriate auction company for your property. This may be a regional auction company or, where you have an unusual property, a specialist in that field. As a matter of course, when looking to promote your property before the auction, the auction house will arrange:-
- Online and offline marketing
- Open days
- Viewing appointments
Once the promotional material goes live, we then move on to the sales process!
The sales process
The sales process is relatively straightforward, with the auctioneer in charge of the sale – attempting to inject competition and increase the price. In this modern era, the sales process includes physical buyers in the auction room and those using online medium. This helps create interest in your property and obtain the highest price possible. The actual act of buying a property can be split into three different options:-
On occasion, you may receive an acceptable offer before the auction. While you can accept the offer, you still need to pay the relevant fees. However, if there is interest before the auction, many auction houses would still advise you to go to auction, where there may be even more interest.
Purchase on the day
Whether a telephone, physical presence, commission or online bidder, there are numerous ways individuals can become involved on the day. This process is simple; your property will go to the highest bidder.
On occasion, where your reserve price has not been met, and the property was not sold in the live auction, you may receive post-auction offers. While you are still obliged to pay the relevant fees, you can accept an offer if you so wish.
Pros and cons of an auction sale
Seen as one of the quickest ways to sell a house, there are still some issues to be aware of regarding property auctions. The pros and cons include:-
- The buyer is obliged to pay a 10% non-refundable deposit after a successful bid
- Upon receipt of an acceptable offer, completion is generally within 28 days
- There are no chains connected to property auctions, effectively a cash purchase
- The sale is non-negotiable, with all information made available before the auction
- Property auctions tend to attract serious buyers
- Properties are bought on an as seen basis
- Auctions accommodate a range of property types and even land
- The buyer is legally obliged to pay the agreed price
- While sales tend to be completed within 28 days, the auction process, from start to finish, can take up to 4 months
- Pre-auction viewings/open days can be time-consuming and inconvenient
- Not all auction houses operate a no sale no fee arrangement
- Be aware of potential hidden costs
- You are unlikely to achieve full market price
- A “tight” reserve to value price may lead to no bids
- Ensure your property is valued “fairly” as high valuations can deter bidders
- There may be potential costs even if your house does not sell
- The overall timescale may not be suitable if you are looking to repay debts/avoid an imminent repossession
Average completion time when selling by auction
As you might have guessed, while much of the work is done before the auction, the time between accepting an offer and completion is relatively tight. Usually, the buyer would be expected to pay a non-refundable 10% deposit on the day. As part of the legally binding contract, they are then obliged to provide the balance of the funds within 28 days. If the buyer defaulted, they would lose their 10% deposit and likely incur additional penalties.
Often seen as the quickest way to sell a house, the 28-day completion timescale is only part of the overall process. Depending upon the type of property and potential complications, the gap between approaching an auction house and completing the sale of your property can be anywhere between three and four months.
Quickest way to sell a house: sale to a cash buyer
There is no doubt that the quickest way to dispose of a house is to sell to a cash buyer. The fact that the buyer is not in a chain will significantly reduce the completion timescale, and, in theory, there should be few if any delays. Obviously, the buyer will still need to undertake the traditional surveys and searches, but cash buyers are the Holy Grail when selling your home. There are two main types of cash buyers:-
Independent cash buyer
These are individuals who are looking to acquire property for a family home, resale or private rental. While the lack of a transaction chain will avoid many traditional delays, they are still at the beck and call of their legal advisers. As a result, it may take some time to complete the relevant searches and surveys, and in some cases, the process may still take approaching six months.
Company cash buyer
Over the last few years, we have seen the emergence of companies that are able to offer cash for properties that fit with their investment strategy. In many cases, the entire sale process can take less than one month. The process is relatively simple:-
- Enter property details on the company website
- Receive an indicative online valuation
- The company will arrange a formal valuation
- If suitable, you will receive a formal offer
- The buyer will cover legal fees and other expenses
- Settlement and completion often within one month
Many companies have their own legal advisers on call, ready to start the completion process immediately upon an agreement. These companies will cover all costs associated with the transaction to achieve a much speedier settlement, commonly within 30 days.
Pros and cons of a cash buyer
While there are numerous benefits when dealing with a cash buyer, it is still essential to be aware of the pros and cons:-
- No transaction chain
- Reduced potential for delays
- Costs covered by cash for property companies
- Speedy settlement
- Unlikely to achieve full market price
- Troublesome properties may attract lowball offers
When you consider that a traditional property sale through an estate agent could take up to 9 months to complete, there is potential to save significant mortgage, rates and insurance costs. On occasion these savings can be in the tens of thousands of pounds alongside months of your time.
Reduce asking price
One helpful strategy which can work if you are struggling to attract buyers is to reduce the asking price. This is often the last resort, but you need to be realistic if your property has been mis-priced and is attracting little in the way of interest. When reducing the asking price, it is still important to highlight the benefits of your property, especially when comparing and contrasting with others in the area. A simple reduction in the asking price is in itself not necessarily the answer, and you may still need to arrange more intense promotion through your estate agent.
It is not difficult to see the potential pros and cons of reducing your asking price, which include:-
- Likely to attract renewed interest from buyers
- Increases the chances of a quick sale
- Potential to reduce future mortgage payments
- A quick sale could offer protection from an imminent market downturn
- Potential significant reduction in expected proceeds
- A price reduction is not necessarily guaranteed to secure firm offers
- Sale may still be subject to lengthy delays
- In some scenarios, the reduced price could prompt a move into negative equity
Average completion time when reducing sale price
While a reduction in the asking price may prompt interest from buyers, this will have no relevance concerning the formal completion process. It may well mean that your property is not listed as long as it may have been, but this is no guarantee; you will still be at the beck and call of the market and supply/demand.
Quickest way to sell a house: other issues which could help with a quick sale
We have covered the traditional sales channels above, but there are other issues to consider. These include:-
When is the best time to sell?
As you will see from the table below, August, December and January tend to be the less popular months for property sales (Christmas and the holiday season). Conversely, the period from February to the end of June is the most active, a time when you are most likely to complete a sale.
Quickest way to sell a house: preparing reports and documentation
It would help if you did as much preparation as possible before listing your home for sale. This means that you will be able to begin the completion process in earnest as soon as you accept an offer. Fail to prepare, prepare to fail; it really is as simple as that, especially if you are looking at the quickest way to sell a house.
There is no doubt that cash is still king when it comes to property purchases, offering the ability to cut the completion timescale significantly. You will notice that many cash buyers are keen to negotiate a discount to the market price, which may seem unfair at face value. However, finding the quickest way to sell a house will often lead to fewer mortgage payments and other cost savings. It is also worth noting that companies looking to acquire properties for cash also tend to cover legal and other expenses to ensure swift settlement.
It is essential to consider the pros and cons of each sales channel when looking to sell your house. In addition, you need to consider the proceeds, cost and potential savings with a quick settlement. There is a lot to think about!