Selling HMO properties is as easy as it is hard. With the limited information out there, it’s easy to get it wrong and lose more money altogether. So what should you know and do differently to a single let property when you want to sell a HMO property?
Here are 5 steps that will help you to easily sell your HMO property for more:
1. Understand the Sales price
With different HMOs commands different pricing. To start with, a small 3-6 bed property often goes for residential pricing. Their price is often affected by factors like location, demand and others.
Next is a medium HMO 6-9 bed. This commands income-based valuation and is also location dependent. This will be suis generis so certainly had planning approval and may have some element of income based valuation through change of use.
Lastly, there are large HMOs which comprises of 9 or more beds. It commands an income-based valuation.
To understand where you lie best, you can consult an HMO profession broker or agent and they can guide you through the pricing and answer specific questions you might be having.
2. Get all the necessary sales documents in order
When selling a property, one thing that gets your potential buyers really interested is having all the documents on the HMO property you are about to sell them ready. This will give them clarity of what the property entails and what they will be getting themselves into. If you want to sell the HMO property for maximum value, you need to get the following documents set:
- Floor plan
- Planning Documentation
- Building regulation certificate
- HMO licensing certificate
- Fire safety certificate
- Electrical safety certificate
- rental schedule
- Management contract
- RICS valuation
- High-resolution property photos
In case the documents are incomplete or you just produce them on the legal conveyancing stage, questions will be raised, uncertainties increases and the chances of selling the property decreases
Pro TIP: Maximum transparency when selling an HMO property increases the chances of high price and less time spent on the sales process.
3. Pick the right HMO sales agent
If you opt to go with an HMO agent, you must go with the right one. They should understand the process from the start to the end on how to sell a HMO.
With the complexity surrounding HMO properties, you must select an agent who can be able to speak confidently about the financial, planning, compliance, regulation, and everything there is to know about HMOs.
Pro tip: PICK an HMO sales agent – especially if you want a quick sale of your HMO. Local estate agents can prove great but they often have a lower success rate compared to the HMO specialists.
4. Select the right buyer
When selling an HMO property you must make sure they are qualified to buy the property. HMO buyers with prequalified Finances, who understand the intricacies revolving the HMOs and can transact are the best options to go with if you want to maximise your chances of making a sale.
To understand the best buyer you can ask then the following questions:
- Do you own/ or have you ever owned an HMO property?
- Do you Use an agent or self-manage the property?
- What is the HMO lender are you going to use to raise the Mortgage?
The answers to his question are going to tell you how prepared the buyers are to proceed with the purchase.
Uninformed property buyers will give you high offers but will have low chances of actually going on with the transaction.
Pro Tip: ensure the buyer have adequate funds before you accept an offer.
5. Set the transaction expectation
With enough preparations, the transaction will take no more than 8 weeks. Once you select the best buyer, set an immediate transaction expectation, which includes terms of sale and the time frame. if they decline, try to renegotiate or just find another buyer.
Pro Tip: You can use sales progression companies who will maintain the communication between the parties. This company will speed up the transaction and increase the likelihood of making a successful transaction.