Sian Hiatt, Sales Manager, highlights a number of additional fees buyers and sellers need to take into consideration before, during and after a property transaction...
When buying or selling a property many people often fall into the trap of treating the additional fees that are involved as an afterthought, only putting a focus on the purchase price of the property. This can result in a surprisingly overall high cost at times as the fees have the potential of adding up to quite a hefty amount, so it's important to really get an understanding in advance of what you'll need to pay in fees so that you can accurately budget for them.
So, when you're buying and selling a property what sort of additional fees can you expect?
The main bulk of upfront cash you spend when purchasing a property will be the deposit. This is typically 5% or more of the sale price - the higher the deposit, the more likely you are to have access to the most competitive mortgage deals available on the market. A better mortgage deal could mean lower interest rates, lower overall mortgage repayments and less years for you to spend paying it back.
Estate agents will also typically take a small percentage of the sale, so make sure you're aware of exactly what this is when discussing the marketing of your property at the beginning of the process.
Other upfront fees that tend to collectively run into the hundreds or even thousands are solicitors fees, home reports and, where applicable, Land Transaction Tax (LTT - formerly known as Stamp Duty Tax).
There are also the fees of other potential services you'll need to take into account, such as the fees of any mortgage broker or financial advisor you may use, the potential cost of hiring a removal firm to transport your furniture and belongings, or the cost of using a storage company if you temporarily store bulky items during your move.
These upfront costs can all vary significantly, so it's worth shopping around - but do remember that cheaper doesn't necessarily mean better as you still want to ensure you choose experts in their field.
A lender will run affordability checks during the application process to ensure applicants are capable of covering the cost of the monthly repayments. It's worth doing a few sums yourself beforehand so you can get a better idea of what sort of monthly amounts you believe you'll be able to comfortably afford before making an application.
There are often fees involved with the setting up of a mortgage. These fees usually include arrangement fees and valuation fees. At times, these fees may be free as an incentive to draw you into the mortgage product, but you should also consider the over all total costs of the mortgage deal when considering which to apply for. If you're unsure, it might be worth chatting to a mortgage advisor to gain a better understanding of the costs.
Another thing many homebuyers fail to consider are the ongoing costs they'll face once they have completed their move into a new home. The cost of actually running the property should be investigated beforehand to ensure you're able to comfortably afford all associated bills as some may differ greatly to the bills you pay in your current home. Things such as home insurance, energy bills, council tax, maintenance charges (notably in serviced flats or apartment blocks) and even car insurance can all be effected by the size or location of the property.
If you plan on purchasing a renovation project you'll also need to budget for any work that you plan on carrying out as accurately as possible - these costs may be significant and are unlikely to be overlooked, but they can often be vastly under budgeted for so it's worth mentioning!
If you're looking to buy or sell a property in Cardiff, don't hesitate to get in touch with one of our expert property advisors here at CPS Homes. You can call us on 02920 668585, e-mail email@example.com or pop into one of our three Cardiff branches.