The Conveyancing Costs Of Moving Home
Whenever selling or buying property you should be mindful of all the conveyancing costs involved. It is always a source of amazement to me the amount of home movers that don’t plan for the real cost of buying & selling property. Please don’t get caught short by forgetting to budget for: conveyancing costs, mortgage loan arrangement costs, valuation fees, Stamp Duty & buildings insurance coverage etc.
Solicitor’s Legal Fees
Possibly the most obvious conveyancing costs will be the legal fees payable to your property solicitor. As a rough rule you’ll be advised to provide £400-£500) for the solicitor’s legal fees. In addition to this there will be disbursements (such as Land Registry Office Copies & Environmental Searches) that the lawyer will need to pay for on your behalf. The final consideration is whether the property you are buying is Leasehold of Freehold. Leasehold properties are more complex and as such are more work for your conveyancing solicitor. Expect their fees to be higher for this type of transaction. When you initially instruct a conveyancing solicitor to act for you they will send you a client care letter that should contain a detailed breakdown of the costs you will incur. Make sure you are happy with this before signing the client care letter and formally committing to any solicitor.
Fees to Landlords
If you are selling a leasehold property your buyer will raise enquiries that need to be answered by the landlord. The landlord will usually charge a fee for replying and you will be responsible. It is often the case that this cost will have to be paid up front. It is wise to set aside around £150-£300 to take care of the landlord’s charges.
Estate Agent’s Commission
The estate agent’s fee is probably going to be the largest of the costs (the other big one will be the redemption costs of your mortgage) and will be payable, usually by your solicitor on your behalf, from the sale proceeds, though you can instruct your solicitor not to do this. Estate Agency fees are normally charged as a percentage of the purchase price at around 1.5-2% (although if you use an online estate agent you can cut this considerably). If the sale prices changes during the transaction the estate agent’s fee will change accordingly and you need to account for this in your budget.
Energy Performance Certificate
Before you market your property, you’ll need to have commissioned an EPC. Up until May 20th 2010 you would have been required to provide a full home information pack (HIP) however, these have recently been scrapped by the new coalition government. You do not need to be in receipt of the EPC before being able to market the property. You should budget for £50-£70 for this item. Your estate agent or conveyancing solicitor will be able to organise one for you.
Mortgages
Obviously you’ll need to repay your mortgage from the sale proceeds on completion. This will include any early repayment charges which are applicable and any closing fees. These charges and fees won’t be shown on your annual mortgage statement so you should ask for a redemption statement when you decide to sell. Ensure that you keep paying your mortgage while the sale is proceeding. If you fail to do so then at worst, if the sale drags on unexpectedly, you risk repossession and at best you will become liable for penalty fees which will only add to your conveyancing costs.
Secured Loans & Charging Orders
If you have any loans secured on your property, whether by agreement or as a result of a creditor obtaining a charging order, you’ll need to incorporate these into your conveyancing costs as they’ll have to be repaid on completion. People sometimes secure loans on their property without realising it therefore at the start of the transaction you should ask your solicitor to check what debts are secured. Your solicitor may charge additional conveyancing costs for dealing with the redemption of any additional charges.
Services
Something people don’t always take into account in their conveyancing costs budget is the final bill for their services (i.e. gas, water ad electricity). On the day of completion you’ll need to read all your meters and contact the service providers to advise you are moving and to ask for a final bill. Don’t forget that if you take part in some kind of budgeting scheme where you pay a fixed amount throughout the year and you are currently in arrears, you may (unless you can take the account balance to your new property) have to settle the arrears in full.
Ground Rent & Service Charges
This only applies to you if you are selling a leasehold property. You will need to settle any arrears on ground rent & service charges on the completion of your sale. You should continue paying any charges up to exchange of contracts if you are able as late payment charges will only add to the final conveyancing costs. If you are not able to make a payment contact the landlords and let them know you are selling and will be settling the arrears from the sale proceeds, they may then be more lenient. If you do intend to make payments, make sure you speak to your conveyancer first. It may be better to pay it through him. This way he can certify to the purchaser that the payment has been made in the event a receipt isn’t received in time for completion.
On completion, if you made any payments which cover a period that goes beyond the date of completion, your solicitor should recover these from the buyer and deduct them from your conveyancing costs.
Removals
Something else to take into account when calculating the total cost of moving is the removal fees, if you are employing a removal company, as well as any storage costs if you need to store any of your belongings. Don’t leave any items in your property unless previously agreed with the buyer. If you do not do this you will leave yourself open to being pursued by the buyer for the costs of removing said items.
Fixtures & Fittings
If you have agreed with the buyer that he will pay an additional sum on top of the purchase price for fixtures & fittings then this will be sent to your solicitor along with the purchase monies and he will deduct it from the conveyancing costs.
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Filed under Investing. Tags: conveyancing, conveyancing costs, moving home, property solicitors
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