Costs To Consider Before Buying or Selling A Property

There are few things more exciting than buying a house, especially if you’re a first-time buyer. The trouble is that getting onto the ladder is a pricey affair. It’s easy to assume that once you’ve found a home you like the look of, and an offer has been agreed, you pay a fee and the deal is done. Sadly, there are multiple costs involved in selling houses or becoming a homeowner, and it’s useful to be aware of fees and charges before you start your property search or put your home on the market. 

Image source: https://pixabay.com/photos/build-a-house-house-for-sale-4503738/

Getting a mortgage

Most people can’t afford to pay for a house outright, and they put down a deposit and take out a mortgage to fund the acquisition. Before you begin your search for the perfect home, it’s incredibly beneficial to research mortgages and make sure that you know how much you can afford to spend. It’s worth noting that taking out a mortgage effectively signs you up for monthly payments for several years, but there may also be additional charges to consider. Some brokers will charge for their services and you might also have to add an arrangement fee. This fee can usually be added to the total mortgage cost. 

If you’re buying and selling at the same time, the dates rarely line up perfectly – some movers use regulated bridging loans to complete a purchase before their sale goes through, though as short-term finance it’s important to have a clear repayment plan in place

Legal fees

If you find a property you love, you make an offer and it is accepted by the vendor, you will need to contact a solicitor who will carry out searches and oversee the process of transferring ownership of the house or flat. Fees vary according to the solicitor you use, and it’s always a good idea to get a written quote before you decide which firm to go with. Many solicitors will ask you to pay an initial fee for the property searches towards the beginning of the process before the rest of the conveyancing charges are settled once the sale is complete. If you’re selling up, you’ll also need to factor legal fees into the overall cost. As the vendor, you will need to appoint a solicitor to take care of the sale and liaise with the buyer’s solicitor. 

Agent fees

You may have stumbled across people talking about fees charged by real estate agents. If you’re buying a house, this shouldn’t be an issue. If you’re selling, you’ll pay an estate agency a fee to cover advertising and marketing and additional services, such as organising viewings and communicating with buyers. Some companies will also charge commission. Commission rates vary, and it is possible to utilise agencies that don’t charge commission. If you are selling your property, research agencies carefully, compare prices and services and ask neighbours, friends and colleagues for recommendations. 

Survey

If you’re buying a home, it’s advantageous to have a survey done. This is particularly important for older properties and those that are not in pristine condition. You can choose from different types of survey, depending on how comprehensive you want the report to be. 

Stamp duty

Stamp duty is a tax applied to property purchases over £500,000. If you’re buying a house before March 31st 2021, and the cost is below this threshold, you won’t need to pay stamp duty. Stamp duty is applicable to second home purchases over £40,000. 

Picture courtesy of https://pixabay.com/photos/house-home-sold-brick-for-sale-435618/

Buying and selling houses can be complex, and there are often charges involved that can come as a surprise, especially for first-time buyers and vendors. Hopefully, this guide will ensure that you are prepared.