A guide to selling for financial reasons

Financial challenges are invariably stressful, and you’ll no doubt have a lot to think about. But while selling your home is always there as a last resort, are you sure you’ve thoroughly explored all other options?

Here are a few things to try before you decide that you definitely have to sell your home:

Speak to your lender

Your bank or mortgage company may offer payment options that could make your home more affordable. Work out what you can afford to pay before speaking to them. Banks and lenders have specialist support teams to help in situations where your income has suddenly dropped, or costs have gone up beyond your control.

Don’t wait until you can’t make a payment. It’s always best to seek support before the situation worsens. 

Understand your debt

If you’re considering selling your home to clear your debts, the first thing to look at is your mortgage. Will the sale of your home clear this loan and leave some money to spare? Or will you be left in a situation of negative equity? (i.e. One in which the sum you owe is greater than the funds you receive from the sale.)

If the value of your home has gone up over time, a mortgage with a low interest rate is often considered a ‘good’ debt, as opposed to higher-interest borrowing such as credit cards or payday loans. Once again, your lender may be in a position to offer a solution here.

Contact the experts

There are many useful resources you can turn to when facing financial difficulties. We’d always recommend seeking independent financial advice so that you fully appreciate the implications of selling your home, and understand whether the sale of your property will cover the outstanding mortgage and other debts.

If you’re struggling to manage multiple loans or payments, you could speak to a debt charity for advice. These services are free and offer personal plans to tackle your debts. Among the UK debt charities are StepChange, National Debtline, and Citizens Advice.

Housing options

Are you planning on downsizing and buying a smaller property? If so, that’s certainly something we can help with. Most people will need to sell their current home before they’re in a position to complete on their new one.

You should understand that it can be hard to get back onto the property ladder once you sell a property, given that house prices typically increase in value. So you need to give your decision a lot of thought. This is particularly important if you were hoping the sale of your property could help you financially when you retire.

Alternatively, if you want to move into a rental, our lettings team can support you with this. The advantages of moving into a rental include flexibility and having to pay less money upfront, with no repair or maintenance costs. However, the disadvantages are that your landlord could increase the rent, you might not be able to decorate the property as you’d like to, and you don’t have the option to build equity in the property.

Your FAQs answered

We’ve worked with many different kinds of property vendors over the years, including those who are selling their homes to reduce debt or due to other financial issues.

They often ask pretty similar questions, so we’ve put together a summary of some of the most commonly asked ones for you to mull over.

Can I save money by selling the property myself?

The short answer is: possibly. You will indeed save money when it comes to fees, however it does mean a lot of extra work. And even if you are selling your home yourself, you’ll still need to pay for marketing, professional photography and an accurate valuation. Arranging and conducting viewings, not to mention dealing with enquiries and seeking feedback, can also be both time-consuming and stressful. Equally, unless it is properly marketed, a property rarely achieves its maximum potential price.

How long will it take to sell my property?

Unfortunately, there’s rarely such a thing as a fast sale when it comes to the property market. Once a buyer has been found, there are still the various legal and financial hoops to jump through.

For that reason, we never pledge to complete a sale by a particular date. After all, we couldn’t do that with any degree of certainty, so it wouldn’t be honest of us to make false promises.

It’s also important to factor in the time it takes to find a buyer, and to go through the rest of the sales process once an offer has been made.

So rather than giving you a definite timeframe, what we can do is assure you that we will do everything we can to sell your property as quickly as we can. We do this through realistic pricing, professional marketing and proactively looking for potential buyers.

Should I use a property buying company?

Of course, there’s nothing stopping you from using a property-buying company. However, there are lots of factors you should be aware of before you do.

Firstly, they might promise to pay in cash, often within a very short timeframe. But the price will be far less than you can expect when you sell through an agent like Oakfield.

It’s estimated that property-buying companies typically get away with paying 25% less than the market value of a property. They target those who are desperate to sell, particularly where a property needs a lot of work, or has legal issues.

There are also lots of legal loopholes that property-buying companies can use to reduce their original offer, so at the end of the process, you could be left with less than initially quoted. If this is the route you decide on, do plenty of research into the company you choose, since there are many known scams that could see you lose out financially.

What are the costs of selling my home?

Agent and legal fees are normally paid once a sale has completed. So, you don’t need to worry about paying us upfront. However, before reaching this stage, you may need to pay for repairs and maintenance to ensure your property looks as attractive as it can to prospective buyers.

Additionally, you should contact your mortgage company before selling to check whether you might incur early repayment fees, since these can run into thousands of pounds. Be aware that, occasionally, property sales can fall through, so there is a chance that you could lose the money paid towards legal costs. It’s always wise to put some money aside for unexpected costs during a property sale, and of course, you’ll need to pay any removal or storage companies you use.

To discuss any of the matters in this guide please feel free to contact us.

Download our guide to selling for financial reasons

Financial challenges are invariably stressful, and you’ll no doubt have a lot to think about. But while selling your home is always there as a last resort, are you sure you’ve thoroughly explored all other options?

DOWNLOAD OUR GUIDE

Ready to talk?

Whether you’re letting or renting, buying or selling, we at Oakfield help ensure a cost-effective, smooth and hassle-free process. Take the next step now and get in touch with us.

Don’t just take our word for it…

Catherine Piney – Leaseholder in Bexhill

My husband and I would like to thank Samantha and Jessie for their hard work, professionalism and approachability as our block managing agent. We’ve always had speedy responses to any queries and with a friendly manner, they have made living in our block a pleasure. It is time for us to move on and they have been so helpful with our legal pack. We would always recommend them to anyone needing a thoroughly professional service. Catherine Piney – Leaseholder in Bexhill

J Ellis – Leaseholder in Hastings

Hannah Dennis and the team at Oakfield Property are the management company looking after our building. Hannah has been communicative, polite, efficient and thoughtful in her management of the building. It has been a pleasure to work with her and the team. J Ellis – Leaseholder in Hastings

C Harvey – Director of Freehold Company

As one of the directors of a block of flats in Hastings which Oakfield have been managing very well for the residents for a few years, Bethany Mallet our current Senior Property Manager is extremely professional and efficient and helpful and capable. I would recommend her and her team C Harvey – Director of Freehold Company