I have been in the process of selling my flat for the past six months and have had a couple of false starts.
Not only has this already cost me several thousand pounds in wasted legal fees, I am now really worried that the house I have had an offer accepted on is going to drop me because I’m holding them back from making their own move.
I am really set on this particular house as it’s close to my parents and has a good school for my son and houses there don’t come on the market often.
I’m at my wit’s end though – my estate agent doesn’t seem to be able to find me a buyer that is committed and I am running out of time on the house I want to buy.
What are my options?
There are several options available if time is running out on your home sale
Matt Robinson, chief executive of estate agent Nested, replies: Unfortunately in the UK this is all too common, with almost one in three home sales collapsing. There are four options to try and continue with your purchase.
Use another agent
Matt Robinson is chief executive of estate agent Nested
Number one, instruct another agent to help sell your home. This will increase exposure for your home, through agency branches and mailing lists, and could increase competition between your two agents to find a buyer.
On the downside, there is no guarantee that increased exposure will find a buyer in time for you. The majority of home buyers are using Rightmove or Zoopla and will have seen your home before.
You can expect to pay between 2 to 3.6 per cent in fees if you’re using more than one estate agent at the same time. Here’s a tip: There is definitely a little room for negotiation.
Number two, use a bridging loan. A bridging loan can be used to finance the purchase of your new home, and is designed for your situation. It should be relatively easy and fast to arrange.
Taking a bridging loan should really be seen as a last resort. They are expensive and can eat in to the equity you have in your home extremely quickly.
This has serious implications if you end up needing the loan for longer than you thought, and in the worst case scenario, you could even lose your home.
Many bridging lenders also charge a 1 per cent arrangement fee and a 1 per cent exit fee when you repay the loan.
If you use an adviser, you are likely to be asked to pay an additional 1 per cent fee to them for finding you the deal.
If you are considering this option, make sure you take independent financial advice from a fully regulated adviser.
You can find an adviser here.
However, the downside is that for each month your home sale doesn’t complete, you will pay interest rates that can range from 10 to 20 per cent APR. This can quickly add up and become an expensive option, especially as you will be paying estate agency fees on top.
It’s recommended to only consider a bridging loan if you have a guaranteed fixed date when you will no longer need it. Otherwise there is a real risk of fees racking up and you losing a significant portion of your homes value. For every time I have heard of this working I have heard of a horror story, so please tread carefully.
Use a home buying service
Number three, use a home buying service. Home buying services typically offer between 65 and 85 per cent of your home’s fair market value.
It is usually advised only for people desperate to release cash in a tight financial position, as nobody wants to sell their home for less than it’s worth.
It is certainly a fast way to enable a move to your next home. There are no estate agent fees so you will receive the full amount offered by a home buying company, but you’ll usually be left considerably out of pocket.
There was a recent Office of Fair Trading report on home buying services and it found there were one or two legitimate companies, however, there are many predatory players in this space, so again, please watch your step.
HomeOwners Alliance has put together a useful guide on what to watch out for here when using a quick sale service here.
Number four, sell your home with Nested. This is an unashamed plug, yes, but we have tried to come up with a fairer and more cost effective way to deal with exactly your problem.
Nested is an estate agent that allows you to withdraw money from your home, if and when you need it. On day one we set aside the money you’d get for your home, while we sell your home for the best possible price.
Because we can lend you the money – interest-free – for up to a year, you can treat this advance as being under offer.
Unlike your previous false starts, this offer won’t fall through. You will immediately be able to fix your broken chain, start discussing completion dates and not miss out on the home near your parents.
At the same time, Nested will market your home and manage the sale just as you would expect from a traditional estate agent.
On completion date, if your home is not sold yet, you can withdraw the advance funds from us to complete the purchase. We’ll continue to market your old home and pay you the rest of the money when it sells.
Editor’s note: For more information on Nested and how it works, read our full interview with Matt Robinson here.