Savvy property sellers shop around for agent fees

Savvy home sellers are managing to save on the cost of moving despite property prices increasing by 11.1 per cent over the last year according to the latest Cost of Moving Survey from Woolwich.

However savings are likely to be cancelled out by the additional cost of Home Information Packs (HIPs) which will become compulsory from June this year.

With property prices having risen steadily movers are keen to save money where they can. According to Andy Gray, head of mortgages for the Woolwich, sellers are using their strong position to drive down the costs of moving: “The market definitely favours sellers at the moment and the lack of property on the market is helping them negotiate deals with estate agents, and to a lesser degree solicitors, as agents are desperately trying to find enough good quality property to satisfy the increasing demand. As a result the cost of moving for sellers has decreased by approximately 10 per cent since last year ­­- it now costs on average £4,666 to sell a home compared to £5,181 last year.

“We also expect the pressure to continue on fees as long as it stays a sellers market. Especially as the introduction of Home Information Packs in the summer will only add to the cost of selling a house.”

From 1 June 2007 it will be compulsory for anyone selling a home to produce a HIP containing an energy assessment, searches and legal documents and optional home condition reports, industry estimates have suggested costs of around £400. According to the research, although 85 per cent of estate agents agree that this will increase the cost of moving, a very high 77 per cent do not believe that it will improve the house buying process at all.

Although HIPs will shift some of the costs of moving from buyers to sellers, the impact for buyers is likely to go unnoticed. This is due to stamp duty contributing on average £9,750 to buyers’ costs. Buyers fork out around £10,745 compared to £10,832 in 2006. The slight reduction is due to reduced solictors’ fees (down on average by 11 per cent) and with Land Charge costs coming under HIPs from 1 June this will further reduce the cost for buyers as the cost is transferred to sellers under the HIPs process. This will reduce costs to buyers by approximately £200 to an average of £10,545.

“Sellers not only have the advantage of there being more demand for property than is available, thus driving up asking prices, they are also squeezing the professionals for every penny they can to cut the costs of moving. In contrast, buyers are having to pay more or less the asking price to secure the property they want as well as forking out for stamp duty and other costs. Basically if you are seller moving into rented accommodation or abroad, it’s about as good as its gets at the moment.”

Other findings:

All indicators point to a return to the sellers’ market of a few years back:

Vendors are not having to reduce their price by as much as they have in previous years to secure the sale. The majority reduced by one to five per cent compared to six to ten per cent last year.

Properties are selling quicker – almost one in five (19 per cent) are selling in less than a month compared to four per cent last year. Less than a quarter (22 per cent) take more than two months to sell compared to almost half (47 per cent) last year.