For the 1.5 million-plus mortgage borrowers who are trapped in their homes by negative equity this extra money could help them to make the break and move home.
The biggest single selling expense is estate agent fees, which range from 1 to 3.5 per cent. On a pounds 100,000 mortgage sellers can end up paying a whopping pounds 3,500 to the agent. An alternative is tosell the house yourself. Alan and Jean Ellis sold their house privately with the help of Loot, the advertisement newspaper, and managed to save pounds 2,750. "We were so pleased with the way it worked. All we had to pay was pounds 49 - not a penny to the estate agents," Mr Ellis said. "They were asking 2.5 per cent round our area. The house was sold within three months, and we managed to get the full asking price. That was pounds 110,000."
For their money, the Ellises were provided with a Loot sale board outside their house, daily adverts in the London edition of Loot for three months, a sellers' kit and a free legal advice line. The kit includes advice about adverts, record sheets for callers and a template for a home-produced information sheet to send out.
A cheaper mechanism still is to phone up regularly and place small ads in Loot absolutely free. There are 24 editions in the UK and Ireland, with a total weekly circulation of half a million. In this case you will probably need to supply a sale board yourself.
Loot, which has already captured 70 per cent of the London rental market, is now aiming high in the house-selling market.
The obvious downside of using the paper is that you have to show people round the property yourself and be more involved on the administrative side - like mailing out details. You lose the benefit of the estate agent's valuing and bargaining skills and you have to be careful of the way you describe your property, so as not to run into trouble under the Property Misdescriptions Act.
Instead of Loot you may wish to use a local paper or freesheet. But with these you will have to pay by the insert. A small classified ad costs anything between pounds 10 and pounds 40, depending on circulation. Larger displays cost more. Free design is usually available on request, and they can use your photos.
The Birmingham Post and Mail last week launched a service on Teletext for the Central TV area. It will list your house details for pounds 20 a week.
Private sale is probably easier at the lower end of the market - Loot's highest price to date is pounds 150,000. Those with more expensive properties, or with properties that are harder to sell, may still do better going to the estate agent. But do shop around to find the most competitive commission. Be aware that having just one representative - a "sole agent" - can be at least 1 per cent cheaper than multiple agencies.
There are several other areas in which savings can be made:
o Removal companies charge from pounds 250 up to pounds 800 for a three-bedroom house, plus VAT and insurance. If you move everything yourself, you can hire a self-drive cargo van, capacity 850 feet, for pounds 110 a day.
o With a reputable operator and a straightforward transaction, conveyancing fees can be reduced without damage to the quality of service. Patrick Bunton, of mortgage brokers London and Country, says licensed conveyancers charging as little as pounds 100 plus VAT are a good idea if you can ask your mortgage lender for recommendations based on its experience. For more complicated transactions you will probably still need a solicitor. Expect to pay around pounds 350 for this service.
o Buyers are offered three levels of survey: the lender's report, often done for free; a house buyer's report at pounds 100 to pounds 150; or a full structural survey costing, on average, pounds 300 to pounds 400. But Tony Copping Joyce, of Copping Joyce Chartered Surveyors, said it is a false economy to try and rely on the building society's report alone. Buying a property is an big investment. "You wouldn't buy a second-hand car unless you knew what you were getting," he said. And if you discover any problems, this can help bargain down the sale price.Reuse content