Agents can be a real asset

Published on 31/10/2002 00:00

Q What are the legal problems to do with selling my house myself? I am selling due to divorce and need to maximise my profit. I can’t afford for a selling agent to take a big cut and I have quite a lot of time on my hands at present.

A A good way to maximise profits on a sale is to use an experienced and trustworthy selling agent. What may seem like a saving on fees at the outset, by doing the selling yourself, can often mean a reduction in the final price achieved.

While there is no real legal reason why you cannot market your own house yourself, there are many good reasons why you should not.

A good selling agent, with a wealth of experience in the property market, will be able to prepare an individual marketing plan for your property and advise you on an asking price and target price. Get this wrong and your house may not sell.

Good selling agents will prepare quality particulars with a good selection of interior and exterior photographs. They will provide you with an eye-catching "For Sale" board, offer website exposure and very often property showroom window exposure. They will usually have extensive mailing lists and distribute your details through these.

Carefully planned advertising coverage in newspapers, property centres and property magazines can all be arranged to achieve maximum exposure. One of the many advantages of using a selling agent is the option of accompanied viewing by experienced personnel if you are not able or simply do not wish to do this yourself.

Following up on all viewers, keeping a note of all prospective purchasers and arranging closing dates are all areas that can be potential minefields in the wrong hands. In particular, the accepting or rejecting of offers, coupled with the intricate negotiations required to achieve maximum price, are best left to experienced personnel. By using an experienced and trustworthy agent you can ensure that the best possible price has been achieved and that an agents fee has been money well spent. - DP

Q What exactly is stamp duty, who pays it and how much is it?

A Stamp Duty is a tax on documents relating to specific transactions, share transfers and property transactions.

Unfortunately for the homebuyer, it has become an increasingly major expense of the whole house buying process. Buyers must pay 1 per cent of the price paid if more than 60,000, 3 per cent for a price above 250,000 and 4 per cent for those purchases above 500,000.

What seems harsh is that the tax does not apply simply to the balance above any threshold but to the whole purchase price. If, for example, a price of 90,000 is paid for property, the stamp duty is 900 - 1 per cent of the purchase price and not 300, being 1 per cent of the amount over 60,000.

The buyer pays the tax to the Inland Revenue during the conveyancing process and a buyer’s title deed cannot be registered until this duty has been paid.

With property prices on an upward trend at the moment, particularly in the hotspots of Edinburgh, Glasgow, and their surrounds, it would seem that few transactions are completely free from such duty.

The increased rates of stamp duty on higher priced properties inevitably make buyers consider ways of trying to reduce such costs. One way is to arrange a purchase price just below a threshold, if this is possible. This may just be possible in a negotiated purchase, but at a closing date, with competing offers, it is highly unlikely that keeping a purchase price just under a stamp duty threshold will secure the property for the buyer. Sometimes buyers attempt to apportion the purchase price paid between the heritable property (the house and land) on which the duty is paid and the movable property (curtains, carpets and white goods) on which no duty is payable. Such apportionments are not always appropriate and a solicitor will guide you on when this can be done and the procedures involved.

In the 2001 Budget, the Chancellor introduced Stamp Duty Exemption Relief for properties bought for up to 150,000 in certain "disadvantaged" areas. This scheme is to help the regeneration of certain areas and your solicitor will be able to advise you on which properties fall within this category.

Although the stamp duty rates seem particularly harsh for home buyers, Britain still has the cheapest home buying costs in Europe. Accordingly, there has been speculation that the Chancellor may be tempted to increase rates further, not only to generate more revenue but also to calm down the already booming housing market. You have been warned. -DP