THE REAL COST OF SELLING, BUYING AND MOVING HOUSE
The cost of selling your property plus the actual expenditure of the move itself, will take a considerable portion out of the purchasing budget.
Take care when assessing your budget. Make sure that your figures are accurate. It is vital that you have a clear understanding of your financial affairs before you even commence this process.
How much can you spend on your new property?
Calculate the exact cost of moving and the money that will have to be paid to Estate Agents Conveyancers etc and then take that away from the purchase price… the remainder is what you can afford to spend on a new property!
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
These can differ greatly with some charging a fixed fee (be sure to read the small print) and others a percentage of your home’s value.
There are different rates depending on whether your property is free or leasehold. Due to the extra work involved for your solicitor with leasehold the costs will be greater.
When budgeting for legal fees, allow for at least 0.5-1% of your homes value. Do some research on the internet in order to find a more competitive price. Try and foster a good relationship with your solicitor as they are the ones who will be assisting you in all aspects of the process. It is their job to see that everything goes as smoothly as possible. Have a realistic idea as to how long the entire transaction will take to complete. New and unexpected enquires may come up, resulting in further 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?
Moving costs
There is not an actual set price for moving home, it is dependent upon several factors:
Do you require storage?
What is the actual distance of the move?
How accessible is the property?
How much is actually going to be moved, how many vehicles are required?
Are you going to be doing your own packing or not?
Doing the move yourself would be cheaper, although there remain some things to consider:
You will still have the cost of van hire.
If you don’t already have it on your household insurance, be sure to add ‘Goods in transit’ to your policy.
The cost of the diesel should be included in moving expenses.
Packing materials like boxes, portable wardrobes, bubble wrap and tape should also be budgeted for.
Listed below is a list of all the fees that you will be required to pay during the purchase of your property transaction:
Solicitor’s fee.
The more work your solicitor has to do for you, obviously the more they will charge.
Stamp Duty may be added to your quote when you purchase your property, just remember to deduct this so that you can compare all quotes accurately.
Beware of hidden costs – a cheap quote may turn out to be too good to be true. Have your conveyancer give you a break down of the quote, as well as any extras that may pop up in the course of the property transaction.
Everything that should be part of your quote is listed below:
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
Be prepared for the unexpected. So as not to be caught short, put some extra money away for unforeseen events.