The Lemon Fool

Hello. I'm looking to sell my rental property flat and have an interested buyer and we're close to agreeing the price. So I'm considering selling it privately but am wondering about the process and any pitfalls to be aware of?...Should I ask the buyer to submit a formal offer via their solicitor to mine? I have a good tenant in the property but should I give him notice once the offer is accepted? I guess there's a risk that the sale could fall through and then I lose the sale and the rent...Does anyone on here have experience of managing a private sale? Any advice on this topic would be greatly appreciated! Best, Lance

LanceSterling wrote:Hello. I'm looking to sell my rental property flat and have an interested buyer and we're close to agreeing the price. So I'm considering selling it privately but am wondering about the process and any pitfalls to be aware of?...Should I ask the buyer to submit a formal offer via their solicitor to mine? I have a good tenant in the property but should I give him notice once the offer is accepted? I guess there's a risk that the sale could fall through and then I lose the sale and the rent...Does anyone on here have experience of managing a private sale? Any advice on this topic would be greatly appreciated! Best, Lance

I am no expert but what you are doing is mainly just cutting out the selling agent and his fees. I would certainly ensure that both parties engaged solicitors/conveyancing agents for their own protection (in both cases) As for the sitting tenant? I cannot help there.

Dod

Dod101 wrote:

LanceSterling wrote:Hello. I'm looking to sell my rental property flat and have an interested buyer and we're close to agreeing the price. So I'm considering selling it privately but am wondering about the process and any pitfalls to be aware of?...Should I ask the buyer to submit a formal offer via their solicitor to mine? I have a good tenant in the property but should I give him notice once the offer is accepted? I guess there's a risk that the sale could fall through and then I lose the sale and the rent...Does anyone on here have experience of managing a private sale? Any advice on this topic would be greatly appreciated! Best, Lance

I am no expert but what you are doing is mainly just cutting out the selling agent and his fees. I would certainly ensure that both parties engaged solicitors/conveyancing agents for their own protection (in both cases) As for the sitting tenant? I cannot help there.

Dod

I agree. What you have done is simply cut out the estate agent and the need to pay them a few £k in fees. I have sold the odd house directly as you describe and it all tends to go swimmingly, with no agent involved muddying the waters. So yes just appoint yourselves a solicitor each and issue a 'memorandum of sale' to each (your names, the address of the property, the agreed price and any other basic details you can think of e.g. whether vacant possession has been agreed or tenant stays in situ) and Bob's your uncle.

All the risks you describe persist whether you use an agent or not.

I have sold a building via a private sale.

I think there is a lot more risk being a private buyer than a private seller. And yet it is the seller who saves the estate agent commission.

Either way you need a solicitor and I always prefer using a proper one rather than some discount conveyancer.

Before dealing with the tenant find out what the buyer wants. Some may want a tenant whilst for others that is a non-starter. If you are sure the buyer will not want a tenant then get rid of that tenant before exchanging contracts, as there can always be an obstacle of getting rid of them.

We did this with mum's flat last year. We had 2 agents around to value when mum went into care, and there was another identical size but with replaced bathroom and kitchen coming on to the market at the same time.

Both agents suggested 170k, and we have old family friends who always liked the flat and asked if we were selling, so we agreed to sell it to them at that price.

All the same process, solicitors, EPC, etc, just no agents fees. A couple of weeks after we agreed to sell the agent marketing the other one came back and said they'd had so much interest it had gone to sealed bids and fetched nearly £15k over what he thought was their slightly optimistic asking price.

Ho hum.

Paul

There is a difference between selling houses which are usually freehold and selling a flat which is leasehold. I've sold quite a few flats over the past 5/6 years, most through agents but a couple privately. House sales complete in a few weeks, flats usually take a matter of months. With flats there are sometimes hold ups which an Agent will chase, help resolve and saves the seller a lot of leg work.

I have always served tenants plenty of notice and ensured I can offer vacant possession way before we are anywhere near to exchange/completion. I would never leave it to the last minute as tenants don't always see your urgency as their emergency.

For all their fancy glossly adverts, car fleets, and spangly offices, EAs operate a very simple business. They match buyers and sellers and take a cut of the deal, and that's all there is to it. Aside from that they have very little involvement in the homebuying process.

I think you've done a smart thing by cutting out the EA, provided that you are confident that you have good knowledge about the local market and a clear idea of what the property is worth. If I ever come to sell a property I will likely market it myself, or at least use cheap DIY agent like PurpleBricks.

EAs can help a buyer with finance as they are often affiliated to a mortgage advisor or somesuch, but a capable buyer can very easily find one for themselves too.

Once a deal is agreed, it's mainly down to the conveyancers to get the work done.

vand wrote:For all their fancy glossly adverts, car fleets, and spangly offices, EAs operate a very simple business. They match buyers and sellers and take a cut of the deal, and that's all there is to it. Aside from that they have very little involvement in the homebuying process.

I think you've done a smart thing by cutting out the EA, provided that you are confident that you have good knowledge about the local market and a clear idea of what the property is worth. If I ever come to sell a property I will likely market it myself, or at least use cheap DIY agent like PurpleBricks.

There is a downside to doing this. When I buy a house 'self-marketed' I think to myself what a cheapskate and expect a keener price than I'd find the same house in an EA.

Also knowing how little 'reach' the self-marketers achieve compared to the slickly organised agents, I'll know I'm probably up against fewer competing buyers for that particular property so will be able to drive a better deal.

Bottom line is it pains me to say, I reckon EAs broadly speaking achieve a higher price than self-marketeers, and by more than enough to cover the cost of their fee.

vand wrote:For all their fancy glossly adverts, car fleets, and spangly offices, EAs operate a very simple business. They match buyers and sellers and take a cut of the deal, and that's all there is to it. Aside from that they have very little involvement in the homebuying process.

I think you've done a smart thing by cutting out the EA, provided that you are confident that you have good knowledge about the local market and a clear idea of what the property is worth. If I ever come to sell a property I will likely market it myself, or at least use cheap DIY agent like PurpleBricks.

EAs can help a buyer with finance as they are often affiliated to a mortgage advisor or somesuch, but a capable buyer can very easily find one for themselves too.

Once a deal is agreed, it's mainly down to the conveyancers to get the work done.

Up to a point I agree with you but good estate agents know the market and what is more they know where and how to find the buyers. I was selling a substantial late Victorian house standing in about half an acre, and I at first appointed a local estate agent who claimed to know just as well as anyone else, the market value of the house and indeed the market itself. Everything that could go wrong went wrong and after about 6 weeks or so of putting up with this, I fired them and appointed a national estate agent who interviewed the client before letting him even view to ensure firstly that he was serious and secondly that he had the funds to proceed. They sold my house for me in a couple of weeks for well over the expected price. Yes you can cut out the EA (Estate Agent, I assume) but a good one can help and earn their keep. The trouble is that they are few and far between.

Dod

Dod101 wrote:

vand wrote:For all their fancy glossly adverts, car fleets, and spangly offices, EAs operate a very simple business. They match buyers and sellers and take a cut of the deal, and that's all there is to it. Aside from that they have very little involvement in the homebuying process.

I think you've done a smart thing by cutting out the EA, provided that you are confident that you have good knowledge about the local market and a clear idea of what the property is worth. If I ever come to sell a property I will likely market it myself, or at least use cheap DIY agent like PurpleBricks.

EAs can help a buyer with finance as they are often affiliated to a mortgage advisor or somesuch, but a capable buyer can very easily find one for themselves too.

Once a deal is agreed, it's mainly down to the conveyancers to get the work done.

Up to a point I agree with you but good estate agents know the market and what is more they know where and how to find the buyers. I was selling a substantial late Victorian house standing in about half an acre, and I at first appointed a local estate agent who claimed to know just as well as anyone else, the market value of the house and indeed the market itself. Everything that could go wrong went wrong and after about 6 weeks or so of putting up with this, I fired them and appointed a national estate agent who interviewed the client before letting him even view to ensure firstly that he was serious and secondly that he had the funds to proceed. They sold my house for me in a couple of weeks for well over the expected price. Yes you can cut out the EA (Estate Agent, I assume) but a good one can help and earn their keep. The trouble is that they are few and far between.

Dod

IMO in this day & age you just need to get professional quality photographs and get it onto Rightmove & Zoopla. Anyone who's seriously househunting will find it if it appears on those sites.

EAs will tell you about how they have exclusive access to a pool of buyers who have too much money and too little time to be scouring Rightmove, but they're just talking bs.

I do agree that there could be a market for really knowledgeable EAs dealing with high end properties that are difficult to value, but if you're just talking about anything semi/terraced/flat where there are plenty of similar properties to compare to, then it really shouldn't be difficult to work out what realistic asking price is.

vand wrote:

Dod101 wrote:

vand wrote:For all their fancy glossly adverts, car fleets, and spangly offices, EAs operate a very simple business. They match buyers and sellers and take a cut of the deal, and that's all there is to it. Aside from that they have very little involvement in the homebuying process.

I think you've done a smart thing by cutting out the EA, provided that you are confident that you have good knowledge about the local market and a clear idea of what the property is worth. If I ever come to sell a property I will likely market it myself, or at least use cheap DIY agent like PurpleBricks.

EAs can help a buyer with finance as they are often affiliated to a mortgage advisor or somesuch, but a capable buyer can very easily find one for themselves too.

Once a deal is agreed, it's mainly down to the conveyancers to get the work done.

Up to a point I agree with you but good estate agents know the market and what is more they know where and how to find the buyers. I was selling a substantial late Victorian house standing in about half an acre, and I at first appointed a local estate agent who claimed to know just as well as anyone else, the market value of the house and indeed the market itself. Everything that could go wrong went wrong and after about 6 weeks or so of putting up with this, I fired them and appointed a national estate agent who interviewed the client before letting him even view to ensure firstly that he was serious and secondly that he had the funds to proceed. They sold my house for me in a couple of weeks for well over the expected price. Yes you can cut out the EA (Estate Agent, I assume) but a good one can help and earn their keep. The trouble is that they are few and far between.

Dod

IMO in this day & age you just need to get professional quality photographs and get it onto Rightmove & Zoopla. Anyone who's seriously househunting will find it if it appears on those sites.

EAs will tell you about how they have exclusive access to a pool of buyers who have too much money and too little time to be scouring Rightmove, but they're just talking bs.

I do agree that there could be a market for really knowledgeable EAs dealing with high end properties that are difficult to value, but if you're just talking about anything semi/terraced/flat where there are plenty of similar properties to compare to, then it really shouldn't be difficult to work out what realistic asking price is.

Agreed. I have a new neighbour who owns a local estate agency. Not short of money, a couple of rather nice cars and a new house. We were selling a small house on a local estate, bog standard is the expression I think, and even I could give a ballpark price but they sell these all the time for folks who think that they must employ an EA. My Victorian one was very much a one off which I think could be called high end, certainly it was and still is, in the little village. The price is what anyone will pay for it, the value? Who knows?

Anyhow all of this does not sound like the OP's situation.

Dod

I'm trying the same at the moment. I think the pitfalls could be along progress of any sale especially if there is some sort of chain. Many do checks on the individuals to ensure they have access to funds etc but you could try doing some of them yourself. In you case it sounds like there is no chain.

As far as your tenancy is concerned would the buyer still want to rent. I might be tempted to keep them informed. It depends on if you are selling it with vacant possession.

I have used estate agents several times some are very good others are terrible. This time I'm going it alone. The marketing has been negated so I've made my own memo of sale and sent it to the solicitors so they can start the legal process.

If there is a chain it might be harder to find out information. I'm sure the estate agents agree to help each other but not sure and talking to us as individuals.

If you found a few £k in the street you wouldn't be too lasy to pick it up. Sounds like the hard part is done.

Thanks to everyone for the thoughtful replies to this question, lots of useful advice here. We're going ahead with the private sale and so far so good...