They say that buying a house is one of the most stressful times of your life. And it’s no surprise, there’s a lot of money on the line, a mountain of obligations, and delicate chain of events which all have to fall in line perfectly. However, if you’re well prepared, and you know what to expect you can certainly reduce the pressure on yourself. Here we have compiled a summary of the things you should be aware of when buying a home. |
1. What to do when making an offer on a new house
It goes without saying that you should do your research before making an offer on a property, even if it is the house of your dreams. Look at the value of other similar properties on the market in the area you are thinking of buying and be sure that the price is nothing out of the ordinary. Also look at the market trends - are house prices falling or rising? You’ll have a better idea of your position, and whether or not to make the offer official.
Ask your solicitor to make an offer in writing, requesting an exclusivity period (the seller should take their house off the market so that it does not get sold out from under you). You may have to negotiate if your offer is not accepted, but once it is, and the housing chain is complete, you can agree to a moving date with the seller.
You’ll also need to show that you have been accepted by a mortgage lender, and set your solicitor to work on procuring the deed title documents. Before you complete the deal, make sure to run a survey (see point 2) and valuation to pick up on any major problems with the property that could affect its value or safety.
2. Additional fees*
Unfortunately, as you’re probably well aware, you can’t just walk into a bank with a 5-20% deposit and walk out with a house (if only!). There are a number of other significant costs involved in the property buying process. These are some of the most common:
Mortgage setup: You might be asked to pay a mortgage setup fee on a tracker or fixed deal, which will cost from £100-200.
Mortgage arrangement fee: This is different to the setup charge and may cost you up to £2000. You’ll be given the option of paying there and then, or adding it to the mortgage itself, and paying interest on it for the years to come.
Broker fees: If you ask a traditional mortgage broker to help you along in the process, it will set you back approximately £500. This might vary depending on the size of your mortgage, however, especially if your particular broker charges commission on the property value.
Surveys: Depending on the depth of the survey, you may have to fork out anything between £250-600. The home condition report is cheaper and best suited for newer homes. A home buyer’s report goes into more detail, taking into account valuation and both the inside and outside of the property. The structural survey is the most expensive option, and is best undertaken when the property is older or less conventional.
Solicitor fees: Expect to pay anything between £900 and £1,500 pounds for your solicitor’s services.
Stamp duty: This is a government tax based on a percentage of the value of the land/property you are buying. If you are buying a residential property under £125,000 stamp duty will not apply to you, and if it’s a non-residential property you are not obliged to pay if it is valued at £150,000 or under. If you are buying a second home or plot of land valued at £40,000 or under it will also not apply. Otherwise, the costs are as follows:
Property or lease premium or transfer value** Rate
Up to £125,000 0%
The next £125,000 (from £125,001 to £250,000) 2%
The next £675,000 (from £250,001 to £925,000) 5%
The next £575,000 (from £925,001 to £1.5 million) 10%
The remaining amount (above £1.5 million) 12%
*This is not an exhaustive list. There may be other fees involved depending on your lender/bank/solicitor
**As of July 2017, source: https://www.gov.uk/stamp-duty-land-tax/residential-property-rates
3. What you should know about moving day
Before the big day, make sure you book a reputable moving company well in advance. Inform the local council that you’ll be coming in with heavy vehicles (so they can reserve space for you if it’s limited), and get hold of lots of high quality boxes and some good marker pens. Don’t pack anything you’ll need on the day, and keep a kettle, some mugs and emergency tea bags handy at all times.
When looking for a home insurance provider (if you don’t already have one), ask them to cover any damage done to your property during the move.
Importantly, you will also need to ask your solicitor to sign the mortgage deed and sign and exchange contracts. Once done, you can pay the balance then pick up the keys!
Although you’ll feel a huge sense of achievement and relief when you do finally pull up in your new driveway, we’re afraid it’s not quite over. You’ll need to get in touch with local utility companies, tell the Inland Revenue where you are, inform your employer of your new address, and register it with the electoral roll.
Stay organised and make a to-do list. If you cross off items as they get completed, you will feel a sense of achievement and the stress will just drop off. It’s an amazing keystone moment in your life, so keep positive and be proud of your new place. The last thing to do, of course, is plan for that housewarming party. Good luck with the move!
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