There are many costs associated with selling a property, and not all first time buyers understand or know about the hidden costs that may occur.
Below we have highlighted every cost associated with purchasing a property that you may not have originally thought about:-
Mortgage arrangement fee. Most mortgage lenders will want to get paid … they wouldn’t do it otherwise! Usually mortgage lenders will ask you for an ‘arrangement fee’. This fee can vary between lenders, and typically is on average of £900. You may want to check further with your current lender about the terms and condition on your mortgage, as some lenders will expect you to pay your arrangement fee even if the purchase of your property falls through and you decide not to buy.
Valuation fee. This fee is usually charged upfront from the lender, and is basically so they can go out to the property you are buying and make an assumption of the value, and that the property matches what you are paying for it. As a general rule the cost of a valuation is c£300 but it may be more and varies between lenders.
Legal fees. Some lenders these days will actually help towards your legal costs, however you will be tied into using their assigned solicitors. Should you need to or choose to use your own legals, the cost can run from anywhere between £800 to £2000 depending on the complexity of the purchase and the property you are buying.
Stamp duty. Yes, unfortunately we need to pay our taxes. If you buy a property that is valued at more than £125,000 you will be expected to pay a certain percentage tax to the tax man. The amount you pay is staggered based on the value of the property you are buying. This simple tool will help you figure out how much stamp duty you will be paying. Stamp Duty Calculator.
Surveys. Typically a survey is going to cost you £500, however these are non-refundable. Meaning if your sale falls through you won’t be able to recoup these costs. On average home buyers attempt to buy 2-3 properties which fall through before purchasing the home they end up in. Ideally you need to set aside enough to cover the cost of 2-3 surveys.
Removal costs. You have two options when it comes to removals, you can either hire a van and do the shift yourself, or you can hire a company. Either way, it is something that you really need to do, and can’t be avoided. If you go down the DIY route, you can hire a van from as little as £100, and if you use a company it can run into the £1000’s if you have a lot of belongings.
Furniture and extras. If you don’t have a lot of furniture, or are currently renting in furnished accommodation then you will need to go out and buy for your new property.
This isn’t limited to the big things like sofas, beds and wardrobes, you also need to factor in extras such as blinds, curtains, lampshades and other necessities.
Buying your first ever property is probably one of the biggest decisions you will make in your life. Whether you are purchasing alone or you are buying with a partner, the decisions you make now are crucial to your future.
The open market is really a landmine, and if you don’t know what you are doing there are many pitfalls you could come up against. This guide is here to steer you in the right direction, and give you useful advice and tips for buying your very first property.
Follow this check-list and you can’t go wrong, even if you have a property to sell, or are a hardened property buyer, you still may learn a thing or two!