The term “Quick House Sales” seems unrealistic to most people in the current property market, but the fact is it really can happen.  Most people use the traditional method of selling a property with an estate agent, they sign the letting agent’s contract, pay out for the HIP, then wait for a potential buyer to ring on their doorbell.  The reality is very few buyers ring on the door bell and when they do that is the last you see of them.

For a quick house sale it means selling to a private investor or company. They will buy fast, usually an offer is made within a few days and the purchase completed a few weeks later, which is great, but you would have to sell below the current property valuation. So what are the costs?

For a quick house sale in today’s market you would expect to receive an offer of between 20% and 30% below the current market valuation.  Investment buyers make the lower offers for several reasons; clearly they want to make a profit, however they also have to pay around 4% in financing fees, stamp duty and legal fees, totalling to around 5% to 6% of the purchase price.  Then they also factor in that prices are still falling (at time of writing), so add in another 10% to allow for this.  Overall that leaves about 5% profit, which is a lot of money, but then they are taking some risk.

Let’s compare this with an estate agent sale.  Around 2% + VAT commission, legal fees, HIP cost, and say 6 months to sell.  In that 6 months, based on current market conditions, let’s say prices fall by 3%, then there is the cost of mortgage interest, lets say 2% over 6 months.  Also any buyer in today’s market is going to want at least 5% off the asking price.  Overall the cost is going to be around 13% of the selling price. 

So by comparison selling to a property investor will have a net cost of 7% to 17% compared to a private sale via an estate agent.  This is still a lot of money, but once you have sold the property you can then take advantage of market conditions to get a discount on the property you are buying.