The Costs of Selling (and Buying)

How much does it actually cost to sell property?

Before you put your house on the market, it’s important you know how much it will cost to sell property.

If you don’t have much equity, you need to be sure you will have enough proceeds from the sale to pay off your mortgage as well as pay any other costs or fees (or be in a position to make up the shortfall).

Costs of Selling

The costs of selling a property include:

  1. The amount required to pay off your mortgage. Don’t forget if you have any secured loans on your property in addition to the mortgage, you need to know the amount required to pay off these loans as well. In addition to the amount you owe, don’t forget to take account of any arrears if you have any. Also many mortgages carry redemption penalties (usually only applies in the first few years) which you need to be aware of. If a redemption penalty clause is due to expire shortly it might be worth waiting and selling once the redemption penalty has expired.Lenders will often have Administration Fees that they will charge when you redeem your mortgage. These vary from Lender to Lender. To be sure you know the up to date amount required to pay off your mortgage it is sensible to get a redemption statement from your Lenders before you sell. They will usually provide this within a few days.
  2. Estate Agent Fees. If you use an Estate Agent, you will have agreed a fee with them in advance. Don’t forget to include the V.A.T. – it makes quite a difference!
  3. Energy Performance Certificate (EPC)
  4. Solicitor Fees. Agreed in advance although make sure you ascertain if there will be any other charges, such as telegraphic transfer fees. Don’t forget to include the V.A.T.
  5. Removal Costs. Could be low if you’re hiring a van for a day and getting friends to help you. Long distance professional movers can be expensive.
  6. Repayment of Council Discount. If you bought your property from the council you probably received a discount. Usually this discount has to be repaid if you sell within a certain timescale, often 5 years. The amount you have to repay usually reduces each year – it might be 100% if you sell within a year and reducing by 20% each year for 5 years.

Costs of Buying

If you are also buying another property, you will also need to take account of the following:

  • Valuation/Survey fee for your new mortgage.
  • Mortgage application fee and/or Arrangement fee. These can usually be added to your loan.
  • Mortgage Indemnity Guarantee (where Loan to Value is high). Usually be added to your loan.
  • Solicitors fees for your purchase.
  • Various search fees.
  • Buildings Insurance
  • Contents Insurance (optional)
  • Land Registry fee.
  • Stamp Duty (if purchase price is over £125,000):

Up to £125,000                             0%
£125,001 to £250,000                 1%
£250,001 to £500,000                 3%
£500,001 to £1,000,000              4%
£1,000,001 to £2,000,000           5%

By Richard Watters

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