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?

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

Don’t overburden yourself with a mortgage larger than you can cope with. Generally, monthly mortgage payments should not add up to more than one third of your income after tax. You can’t always rely on Lenders to lend responsibly so it will be up to you to find a mortgage broker who will find the right deal for you.

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?

If you are going through an estate agent, you will be expected to pay anything from 0.75% to 2.5% plus VAT.
More and more people are using property portals as they can increase the likelihood of viewers by hundreds of thousands! The cost ranges from 500 to 600. For those who choose to sell their homes through auction, there will be a minimum charge of 2.5% plus VAT. You should have your conveyancing solicitor go through the purchase pack before you buy.

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.

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?

Removal costs

The costs involved in moving house are dependent on several things:
Do you need to store certain items?
How far away is your new home?
Can the property be easily reached?
What are you actually planning on moving, how many vehicles will you need?
Do you intend to do your own packing or have it done by someone else?

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:

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.

Cheap quotes often end up being too good to be true so look out for hidden costs. Request a break down of the quote from your conveyancer in advance and check that this includes any potential extras.

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