Day: 6 October 2020

Tips for selling a tenanted property.

Are you thinking of selling a property you currently rent out? As a landlord, you have two main options; either sell the house vacant or sell it as an investment with the tenants still in place.

As you can imagine, there is lots to consider. This guide covers the pros and cons of each option so you can decide which one is best suited for you.

Option 1 – Evict your tenants and sell the traditional way
The main benefit of selling the house vacant is that you will have a larger pool of potential buyers as apposed to just investment buyers. If you go down this route you will also have time to make any repairs and renovations to make the property more desirable before it goes on the market.

Before you sell the property, you will need to legally evict the current tenants. This can be done with a Section 21 after their fixed-term period has ended, or with a Section 8, provided you have the necessary grounds to evict them.

Evictions during Coronavirus
Across the UK, each nation has produced updated guidance on evictions during the coronavirus outbreak.

In all cases this includes an extension of the notice period for evictions.

ENGLAND

· The notice period has been increased to six months.
· Government has encouraged landlords to pause eviction proceedings where possible.

SCOTLAND AND WALES

· In most cases landlords must now give tenants six months’ notice.
· In Scotland, a new law has made all grounds for eviction discretionary – allowing any tribunals to consider the impact of coronavirus before issuing an eviction order or not.

NORTHERN IRELAND

· Landlords must now give 12 weeks advance notice in writing before the date tenants have to leave.
· Landlords or letting agents cannot force tenants to leave a rented home during the coronavirus outbreak.

Updated 4 September 2020

Remember that the property is your tenants’ home and the news that you are selling the property may come as a surprise. It is always best practice to talk to your tenant early and explain the situation so that you can keep things amicable. Our guide on the do’s and don’ts of evictions is a great place to start.

Once notice has been served, you will need to wait until the end of the notice period to get access to the property, prepare it for going on the market and finding an estate agent to help sell it. When combining this along with the conveyancing, it is likely the whole process will take over a year.

Our guide on how to sell your house has some handy tips for making the process easier.

Option 2 – Selling your property with sitting tenants
Given the time and disruption involved when evicting tenants, you may find it more appealing to sell your property with the tenants still in it. This can potentially save you time, money and give your tenants security as well.

What happens to the tenancy agreement when selling?

In most cases, nothing at all. If your tenants stay on, the tenancy agreement simply changes hands to the new landlord, who is bound by the tenancy in the same way that you were. Your tenants still retain their legal rights and any rights outlined in the tenancy agreement they had with you.

What are the benefits of selling a tenanted property?
Maintaining your rental income right up until completion
A simpler and quicker method of selling you property
Selling your property as is
No need to evict your tenants from their home
What are the downsides?
There are plenty of reasons to sell your property with the tenants still in place, but there are some drawbacks too. As mentioned earlier, you will be reducing your pool of potential buyers down to just buy-to-let investors, which may make it trickier to sell.

While the property is on the market you will have to continue to respect your tenants’ rights, this includes respecting their right to quiet enjoyment while arranging viewings.

Another consideration is the tax you will need to pay. Investment properties are normally subject to capital gains tax, which you may be liable for when you sell your property. There are allowances and exemptions that could offset this, make sure you do your research before deciding to sell so you are fully aware of what you will need to pay.

You will also need to ensure you have all of your paperwork and certificates organised as any potential purchaser will want to see these. This includes:

Evidence of the tenants’ Right to Rent
Signed tenancy agreement
Gas and Electrical safety certificates
Details of the tenancy deposit and the deposit scheme
Further information on any legal notices, complaints or outstanding repairs
Use a NAEA Propertymark Agent
An NAEA Propertymark estate agent who has a proven track record in selling tenanted property can help you decide if it is the right solution for you. They can also help you talk through the process with the tenants before getting the property on the market.

What to know about estate agent fess.

Estate agent costs can vary enormously, so when it comes to fees, it’s important to understand exactly what you’re paying for when you’re selling your house or property.

To help you find what works best for you, we’ve set out everything you need to know about estate agent fees, and factors to consider that may affect how much you will end up having to pay.

How much are estate agent fees?

In today’s market, price is a big factor for many property sellers, especially because of the other costs you have to pay out for moving home. So first, let us explain the difference between a commission based and fixed fee agent.

Commission fees

Some agents will charge a commission for their services, which is a percentage value of the final agreed sale price, and as it is wholly dependent on the price of property for sale, costs can really vary. This fee typically covers:

a realistic property valuation based on local market research, trends and past sales data;
accurate floorplans and measurements;
professional photographs;
the installation and removal of a ‘for sale’/’sold’ sign;
assisted viewings;
online marketing of your property; and
negotiation costs.

Fixed Fees

A fixed fee, however, does what it says on the tin – it is a set price for an estate agent’s specific service. But it’s important to remember that with this model, there could be a choice of packages available with varying levels of service, aimed at different price points. Prices usually start from around £800 but costs can escalate if you opt for added extras – like a floor plan or assisted viewings – so be sure to check what’s included in the bundle before you sign on the dotted line.

Some estate agents offering a fixed fee option will also give you the choice to pay upfront or defer the payment and pay at a later date. Now, whilst the latter may seem attractive, it’s not without conditions. If you choose to defer, a loan agreement will be created with a third-party financial advisor and you may incur additional costs (such as interest) so make sure you understand exactly what you are signing up to.

Whatever type of estate agent you choose to use, always make sure they are Propertymark Protected.

When do you pay estate agent fees?

Estate agent fees are normally due upon completion (when the property has been sold and contracts exchanged), however, some estate agents may require you to pay upfront. Be sure to check the estate agency agreement, as this will stipulate when fees will need to be paid.

Usually, your agent will send their invoice to your solicitor and upon completion of the sale, your solicitor will settle the agent’s bill directly out of your sale proceeds before transferring the balance to you.

Be aware of the terms of payment, and make sure your agency allows a few days for the money to be transferred before they start charging interest. Many estate agents will give you a five to 10-day grace period in which to make payment before charging you a daily interest rate, however, the number of days in which to pay will be stated in your contract.

So, what should you be asking your estate agent?

There are a lot of questions you should be asking your agent, particularly if you’re a first-time seller, but when it comes to costs, the below should cover the basics:

• What is included in your estate agency fee?
• Does your quote include VAT?
• Will you provide floor plans and professional photos of my house, and is this at an extra cost?
• Will you provide and install a ‘for sale’ board, and will I be charged extra for this?
• Do I have to pay an additional fee for marketing?
• Where will you advertise my property?
• How many websites will my property listing feature on?
• Do you charge extra for ‘enhanced’ listings or being a ‘featured property’ on Rightmove/Zoopla etc?
• Are there any other costs I might incur?
• Whilst it’s tempting to go with the cheapest option, you should pick an estate agent that is right for you. For peace of mind, you may want to get quotes from three or four trusted agents.

What does the Estate Agent’s contract cover?

Contract
Estate agents are required by law to tell you what is included as part of their fee, so make sure you know exactly what you’re paying for or could potentially be charged for.

Your contract is likely to include a tie-in period, which locks you into an estate agency agreement for a minimum amount of time – typically between four to 12 weeks. If you wish to terminate the contract during this time you may incur a fee, so don’t forget to check to see if your contract gives you the flexibility to end an agreement without being charged. If it doesn’t, speak to your agent as this may be negotiable.

Some estate agents may also charge a withdrawal fee if you choose to remove your house from the market within a certain timeframe. The terms of the fee will be written into your contract so make sure you have read and understood what you’re agreeing to before you sign on the dotted line.

It’s also important to be aware of contracts that include a “ready, willing and able purchaser” clause. This means that you will be required to pay part of all your estate agency fees, regardless of whether your property sells or not.

If you decide to use more than one estate agent to sell your home, firstly check the small print to ensure your contract allows it. If your agreement states your estate agent has ‘sole selling rights’, this means they are the only agent allowed to sell your home during the stipulated period, and even if you find your own buyer, you will still have to pay that estate agent. This is not to be confused with a ‘sole agency’ clause, however, which is similar, but if you find your own buyer, you won’t have to pay anything to the estate agent.

We would always recommend that you read your contract thoroughly before agreeing to any terms, and if you come across any words that you’re unsure of, take a look at our jargon-busting guide to help you beat the legal language.

Added extras

Some estate agents offer additional services (such as the use of in-house conveyancers or solicitors) which will be charged at an additional cost, on top of their standard agency fee. Prices for these services must be detailed upfront so be sure to have a copy of these in writing (inclusive of VAT) and when payment for them is expected.

Often your agent will ask if you want them to carry out an EPC assessment for you, which needs to be undertaken on a property every 10 years. Now, whilst anyone can arrange an EPC, it’s often more convenient to get your estate agent to do this for you, especially if those in your household all work full-time. Consider how much extra it will be for your agent to arrange this for you compared to you arranging it yourself and assess whether it’s worthwhile to you.

Optional extras, such as featured or premium listings and enhanced marketing packages come at a premium and can range anywhere from £100 upwards. Check what you can afford and think about how much value it will add to your listing before agreeing to any add-ons.

Use an NAEA Propertymark Protected Agent

By using an agent that is Propertymark Protected, you can be confident that they will be professional and transparent with their terms and what they charge. All Propertymark agents undertake regular training and are experts in helping you sell your property.

Tips for selling your home.

Selling a property can be stressful, but I’ve put together a list of handy tips to make the process easier for you. Read them all to help increase your chances of selling your house.

1. First impressions count

Most house buyers form their first impressions within seconds of walking through the front door. If you have a front garden, spend a little time sprucing it up. A few plant pots and a clear pathway can make the front of your house more appealing.

Quick Tip: Don’t forget to clean your front door, it can make a huge difference.

2. Clear worktops and declutter

A tidy room should never be underestimated, especially as dirty or cluttered rooms can be an immediate turn off for some property buyers.

So take some time to clean each room from top to bottom paying special attention to high impact rooms such as the kitchen and bathroom. You should also think about having a spring clean; if there’s too much furniture and things like children’s toys and unused gym equipment lying around, it can make the property feel smaller.

After a deep clean your home will smell fresh and be much more appealing to potential buyers.

3. Add a lick of paint

Neutral colours are appealing to house buyers; a fresh coat of paint will brighten up your home and will allow would-be buyers to envisage themselves living in the space.

4. Do some DIY

Straightforward DIY jobs such as filling holes in walls and checking for clogs in the guttering are easy to do and is one less thing your buyer needs to think about doing once they’ve moved in. Getting any problems fixed before putting the house on the market is a smart idea. You don’t want anything negative to turn up on the property survey either.

5. Think about your pets

Whilst you might think your pet is adorable, others may not. Potential buyers may be allergic so make sure any pets are confined to one room (such as a utility room or the garden) or removed from the home during viewings. Animals can also detract attention away from your property, leaving them with a neighbour or family member will ensure home buyers are kept focussed on your home.

6. Brag about your broadband

Broadband speeds are serious business in this day and age and just advertising the presence of fibre optic cables in your area could be enough to encourage buyers. Make sure to take a look at other features of your property that are appealing to buyers.

7. Think smart

Smart home technologies are increasingly important to buyers. Smart technology such as Hive, which gives mobile control over heating systems, is a feature worth considering. If it moves your EPC (Energy Performance Certificate) up a band, it could add thousands to the sale price.

8. Consider an open house

An open house can be a major benefit for property sellers, and setting aside one or two days to open your house up to the public will save you time in the long run. Spare yourself the effort of cleaning your house from top to bottom every other day and answering the same questions over and over by getting most of your house viewings out of the way in one go.

9. Pick the right agent

Choosing the right estate agent is very important and will have a big impact on how quickly you sell your house, and at what price. Using a Propertymark Protected estate agent will give you the assurance that your estate agent follows best practice, meets all requirements of the profession and works to industry standards.

For more information see our how to pick the perfect estate agent guide

3 COMMON MISTAKES THAT YOU SHOULD AVOID

We have asked NAEA Propertymark estate agents to reveal the mistakes that property sellers make when selling their property. Their top answers were:

1. Overpricing

The first thing your buyer sees is the price, so when it comes to valuing your home, it’s got to be done right.

An overpriced property could deter anyone from arranging a viewing and making an offer. You should seek the help of a professional estate agent who will use their expertise about the local market to give you a fair price.

It’s worth doing your own research too though – how much are other properties in your area being marketed for? What does your home offer that other ones in the area don’t? Be realistic and don’t let pride cloud your judgement and lead to overpricing.

2. Bad Photos

When it comes to selling a property, a picture really is worth a thousand words; with more home buyers searching online than ever before, great photos are an absolute must. Avoid photos with bad lighting or any that are blurry and poor quality.

Your estate agent should take professional standard photos to help market your home, so make sure the property is tidy, the curtains are open, and all the light bulbs are working before they come over.

3. Too Much Personality

It’s important that your home doesn’t feel over-personalised. Remember, not everyone shares your taste and future buyers need to be able to see themselves living there with all their possessions. Family portraits, keepsakes and loud colour schemes can distract buyers from seeing your property’s full potential.

If you follow our tips and avoid these pitfalls hopefully you will have a successful sale in no time!