When selling or buying a property you should be aware of all the conveyancing costs involved. It is always worries me of the number of home movers that aren’t aware of the real cost of buying & selling property. Please don’t let this happen to you by neglecting to plan 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 guideline you’d be wise to provide £400-£500) for the solicitor’s legal fees. As well as the basic legal fee you should check what disbursements, such as copies of land registry documents and bacs fees are payable Note: All of these items and the solicitor fees are within each of Energywyse’s Flat Priced Conveyancny Packs. . If your property or home is leasehold and you have been given a quote based on a freehold sale you might find that your conveyancer will charge additional conveyancing costs to cover the extra work. You should receive a breakdown of the conveyancer’s bill at the outset which should be pretty accurate, make sure you get this.
Landlord Fees
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. The level of fee will vary from landlord to landlord and can be anywhere between £50 – £300.
Estate Agent’s Commission
The estate agent’s fee is probably going to be the largest of the costs (apart from redeeming 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. The fee will be a percentage of the sale price, generally around 1.5% . 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.
Before you market your property, you’ll need to have commissioned an EPC. Up until 20th May 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. An EPC should cost around £60 and you can find independent providers on the Internet or via your solicitor or estate agent.
Mortgage Redemption Charges
If you have a mortgage on the property you are going to need to repay this from your sale proceeds. 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.
Utilities
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
If your property is leasehold then you will need to incorporate any arrears of ground rent and/or service charges into your conveyancing costs. 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. You should only leave behind items which you have previously agreed with the buyer to include in the sale, otherwise you may be in breach of the contract and liable to your buyer for the cost of removing theses 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.