THE REAL COST OF SELLING, BUYING AND MOVING HOUSE
It’s worth bearing in mind that the costs involved in selling a property, not to mention moving expenses, will take a chunk out of what you have budgeted for the property you intend to buy. Be sure that your figures are correct and have a firm grasp on your financial affairs before beginning the process.
How much can you spend on your new property?
Make a precise calculation of how much you will have to pay out for moving and to estate agents and conveyancers etc. Whatever is left over after you deduct these costs from the purchase price will be what you have left to spend on a new house.
Ensure that your mortgage is one that you can easily afford
It is important to find a good mortgage broker who can find the right deal for you. Not all Lenders are responsible in their lending practice, so remember, ultimately the responsibility lies with you to take on a mortgage that you can afford. By and large, no more than a third of your net monthly income should go towards your monthly mortgage payments.
What funds do you have that are readily available?
It is important that you are aware of precisely what funds you have at your immediate disposal as you will need these for miscellaneous costs until the sale of your home is completed.
The two figures you must know are the amount your home is projected to sell for and the remainder left on your existing mortgage. An estate agent can give you a quote on the sale price of your house (get a few quotes for a better idea of what your house is truly worth). Your lender can tell you the balance remaining on your mortgage. Then all you need do is subtract the amount still owing from the sale price of your home in order to get a rough figure of the expected profit.
What is the actual cost of moving home?
Expect to pay anything from 0.75% to as much as 2.5% plus VAT if you are using an estate agent.
To maximise your viewing potential, consider using a property portal. This method you could increase viewer numbers by hundreds of thousands and will cost from 500 to 620. If you plan to put your house up for auction, it will cost at least 2.5% plus VAT. It would be a good idea before you buy your purchase pack to have a conveyancing solicitor take a look at it.
Conveyancer’s fee
What you pay is dependent on several factors. You could be charged a fixed fee (remember to go over the small print) or a percentage of the value of your house.
Another consideration is whether your home is leasehold or freehold. Leasehold is more costly due to the extra work required by your solicitor.
The advice from the experts is to budget for legal fees in the region of 0.5-1% of the value of your property. Thanks to the internet, you can shop around for a much more competitive price. It is vital to have a good working relationship with your solicitor as they are the ones who will be helping you through the necessary procedures. They should ensure the entire process is as painless and straightforward as possible for you. With respect to the time your transaction will take, be patient. Unexpected further enquires may come up and consequently mean additional costs.
Mortgage redemption fees
If you are thinking of paying off your mortgage early it is good to check if there is a redemption fee payable. Recently, with such fierce competition in the mortgage market and borrowers switching deals midway for a cheaper alternative they have started to impose steep exit fees.
Where this fee seems totally extreme, seek advice from an independent mortgage advisor.
How much does it cost to physically move home?
Removal costs
How much it costs to move home will depend on many factors:
Will you need storage?
How far away are you actually moving?
Is the property easily accessible?
How much furniture etc do you have and how many moving vans will you require?
Will you do your own packing or have someone else do it?
There is the cheaper option of doing all the moving yourself. There are some points to remember however:
You will still have to pay to hire a van.
You should have ‘Goods in transit’ insurance. (Check with your insurer that your household insurance includes this)
Budget for the cost of diesel.
Also budget for packing materials like boxes, bubble wrap, tape etc.
Listed below is a list of all the fees that you will be required to pay during the purchase of your property transaction:
Fees for the services of a solicitor.
Of course the more work your solicitor does for you, the larger the fees.
When you buy a property, the stamp duty may be added to the quote. Be sure to subtract this so that you are getting accurate quotes.
Be vigilant for hidden costs, cheap quotes may not be what they seem. It is always a good idea to ask your Conveyancer in advance for a break down of the quote, including any extras that may arise during the course of your property transaction.
The following should be within your quote:
Professional indemnity
Mortgage lender legal fee
Telegraphic transfer fees
Land registry fees
VAT
Land registry searches and office copies
Mining searches
Drainage searches
Local Authority searches
Rainy day fund
No matter how unlikely, unforeseen circumstances should always be prepared for so be sure to have some extra money aside just in case