Surprising costs when selling a home
I think that we can all agree - moving home is expensive.
There are so many costs that it is almost impossible to keep track.
So, what costs do you need to consider before putting your home up for sale?
I think that we can all agree - moving home is expensive.
There are so many costs that it is almost impossible to keep track.
Once you start down the path of moving and have invested in the process, it can be hard to stop.
So, you could be surprised by charges that you were not expecting and feel as if you have no choice but to keep going and pay them.
After all, you are committed to the move by now. Backing out will mean that you have wasted the investments made so far, and you will not get your desired result, your new home!
We wanted to let you know about all of the potential costs that you may come across so that you are aware and can plan and budget accordingly, allowing you to take control of your home move without unexpected charges throwing you off course.
So, what costs do you need to consider before putting your home up for sale?
Marketing. Your agent may charge a marketing fee upfront to get your marketing materials together and get your property listed, especially if your property requires video production, drone images or glossy brochures.
EPC. It is a legal requirement (although a small minority of properties are exempt) to have a valid EPC carried out at your home BEFORE going on the open market. Your agent may incorporate this cost into their fee structure or marketing budget, but you need to know when you will be expected to pay for this.
Your only upfront investment is to get the property on the market.
The bulk of the costs are when you accept an offer.
Solicitors. Usually, the solicitor will ask for a fee upfront to hold on the account and open the file. This initial cost is generally minimal and makes up part of the whole bill at completion.
The legal fees will be due at the point of completion. They usually start in the region of £1000 and increase depending on the sale price and the tenure (freehold or leasehold) of the property.
Estate agent fees. You will know from the initial valuation with your agent what the costs are going to be. These charges are also due to be paid at the point of completion.
If you are purchasing as well, you will have a whole purchase transaction to pay for. This will include-
Another legal transaction cost. Your solicitor will charge you for another transaction, this time for the purchase. Again, starting at around £1000 and increasing from there, depending on the purchase price and tenure of the property.
Searches. If you are using mortgage finance, you will be required to conduct searches on the property you are buying. The solicitor will do these for you, but they will most likely ask for the money to pay for them at the sale process. These will be in the region of £300.
Survey. Your mortgage lender will require a valuation report for the property to ensure the viability of the loan. You will need to pay for this report. You may also need to pay for an additional survey report if you are concerned about any areas or the property's condition. For more information on this topic, read XXXXX (link other blog post here)
Mortgage application. The mortgage lender, or broker, will have an arrangement fee usually to take out the loan. This will vary depending on the amount you need to borrow or how you are structuring the loan. You will not know this exact amount until you apply for the mortgage, but it can be added to the loan amount, so you don't have to hand over cash for this one. Occasionally, mortgage lenders will run offers and incentives to potential borrowers, where they will pay for the valuation report for you, or they may waive the arrangement fees.
Stamp duty. This is the tax that becomes due on the purchase of a property. Your solicitor will pay it so you will receive the request for this money when the completion statement comes with the request for your deposit monies. It is calculated individually for each transaction and considers the purchase price of the property and the circumstances of the buyer. There are lots of ways to check this; visit gov.uk for an accurate calculation.
Capital gains taxes. This is very specific to the individual, but you may have capital gains tax to pay, depending on your circumstances. It is calculated from the increase in value of the property since you bought it. Every person has an allowance each tax year so, if you are concerned about this at all visit Gov.uk or speak to a tax advisor.
And finally, the actual cost of moving. On the big day, there will be lots going on, which will all cost money.
Removals. Depending on how much you do yourself, this can be a huge expense or the simple cost of hiring a van. Removal companies can come and pack everything up for you, or they can put prepacked items onto a van - you will pay accordingly for however much you ask them to do for you. The cost will also increase, depending on the distance that you are moving. Get a quote early in the process to have an idea, but DON'T book any dates until you know that your solicitor confirms it.
Travel to the new property (if moving a long way). You may need to consider how you are getting to the new property - driving? Train tickets? Flights??
Hotel. If you are moving a significant distance, you may stop halfway and stay in a hotel to break up the travel. Of course, this cost will depend on whether you go for a motorway hotel or a 5star spa hotel!
Cleaner. Research shows that the first thing that almost every homebuyer does when they get the keys to their new home is clean. Some people arrange for the property they have left and/or the property they are moving into to have a deep clean so that everything is nice and fresh before you move your belongings in.
Yes, it is expensive to move home. But as they say, forewarned is forearmed, and you can plan and budget accordingly now that you are aware of all of the costs involved.
One final thing to remember is that it is very likely that the majority of quotes and invoices that you receive will be + VAT. Be aware of this when calculating the costs and check all quotes so that you are not surprised by the invoice being 20% higher than you had initially thought.
If you have any questions or would like to discuss your moving plans, please give us a call.