How to cut costs by buying a house without an estate agent

With high street estate agents typically charging commission of between 0.75% and 3% plus VAT on property sales in the UK—which could add up to £15,000 excluding VAT on the sale of a £500,000 house—it is well worth investigating alternative ways to buy or sell a home.

Online estate agents typically charge low-cost upfront fees of around £500-£2,000 rather than the commission a conventional agent would charge, which can be considerably more.

However, they offer a more pared-back service and generally use local agents to value a property and organise viewings.

Some sellers have complained about issues, such as a lack of communication or few viewings being generated, and there can be extra costs that a traditional agent wouldn’t charge, for example for providing a sign outside the property. However, selling this way can save a hefty sum.

Purplebricks is the biggest online agent, and others include Emoov and Yopa while Strike can sell at no cost but makes money from optional extras a seller may want. 

Posting leaflets through doors in your chosen neighbourhood, with your contact details and stating what you are looking for, can net surprisingly good results. Mention you are a private individual rather than an agent touting for more business.

A private buyer can be attractive for a seller, as it avoids estate agent fees, and can mean a saving for both parties.

Approaching builders renovating a property you like can also be worthwhile, as selling before the property is completed can maximise their cash flow.

Credit: Bob Jones, CC BY-SA 2.0. Auctions can give you access to more unusual properties that may not enter the traditional market

Auctions often offer unusual properties that seldom crop up at conventional high street estate agents, or opportunities where a quick sale is required, such as repossessions or sales by the executors or beneficiaries of a will.

There may be properties owned by an organisation, housing association or local authority that are surplus to requirements or simply in need of modernisation or repair.

The catalogue description of properties is always brief and may not mention drawbacks such as subsidence or damage by fire, so it is important to make enquiries and ideally have a survey done before auction day.

If someone else secures the property you cannot recover any costs, such as the cost of the survey.

Be prepared for some properties to greatly exceed their guide price. However, auctions avoid the spectre of gazumping, where you lose the property you have agreed to buy because another buyer offers a higher price.

At auction, you know that when the hammer falls you own the property and have an unalterable price to pay.

If your bid is accepted you are required to pay an immediate deposit—typically 10% of the value of the property—and to complete quickly, so you need to have your finances completely in place before the auction date. 

Timber-framed homes can be far faster to build than buying an existing property

Building your own home, typically using a builder rather than doing the work yourself, can save thousands of pounds, but involves a lot of legwork.

You need to find a building plot of a suitable size, an affordable price and unencumbered by insurmountable planning permission problems. Plotfinder and Plotsearch have plots for sale.    

You should have at least a 15% contingency fund for the unexpected. Pay your builder in stages rather than upfront, otherwise you won’t have a hold over him if there’s a dispute. 

Timber-framed homes, such as those offered in kit form by self-build companies like Potton Homes and Boarder Oak, speed up the building process. 

This saves on estate agency fees, however there’s the possibility of later falling out. Perhaps one party changes plans, inconveniencing the other, or the property harbours problems that the buyer was unaware of at the outset, and feels they should have been mentioned at the time of agreeing to buy. 

However close the friends and family are, it is important to take the same precautions you would when buying any other property—namely commissioning a survey and having the sale overseen by a solicitor or licensed conveyancer.

The higher budget you have, the more sense it makes to engage a property search agent, who can source and check out possible properties and weed out unsuitable ones.

They can save lots of time but also money. Being an impartial third party, they can often negotiate a lower purchase price than the buyer, who may be so keen to acquire the property they’re not level-headed during the bargaining process. 

Charges typically consist of a small registration fee plus 1.5% of the purchase price, or 15% of the saving between the asking and purchase price, whichever is greater. 

Search agents may be able to pinpoint potential but less obvious pitfalls like a proposed new road or a nearby flight path and can put clients in touch with solicitors, removal firms, surveyors, builders and other professionals.

Being constantly in touch with estate agents and property experts, search agents are knowledgeable about market trends and prices. They may be able to source properties that are not generally available, such as those being sold discreetly without active marketing.

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