Moving House Costs
If you are thinking of moving house, then you will probably be interested in how much the move is going to cost you. A move can incur a good deal of costs, including solicitor’s fees and estate agent’s costs. Youshould know that the cost of selling and buying a house is going to take a large chunk out of your overall budget.
This guide will show you all the hidden pit falls and extra costs you may not have accounted for in your budget. On top of that, we’ll show you where to find the most competitive prices.
How Much Can I Spend on Moving?
Moving, as mentioned above, can be expensive, so you will need to work out some basic expenses
before you are totally ready to even start looking for your new home. You need to find out what you can afford. This is easy; just subtract the costs from your total available funds.
So, time to take a deep breath and work out how much you actually have to spend. The calculation is simple, just add together three numbers: amount you expect from your current property sale + savings and assets you have elsewhere + maximum mortgage affordable.
Now, work out what you will be spending: How much to sell your property + costs of buying new
property. Then subtract this number from the last. Got that? Subtract this number from the last one and
that is what you have to work with.
Your calculation should look something like this:
How much I can spend
• Amount expected from sale of current property £
• Savings and assets elsewhere £
• Maximum mortgage you can afford £
Total = £
Subtract spending costs
• Cost of selling property £
• Cost of buying new property £
Total = £
Total amount you can spend on a new house = £
The Specifics
Now you know exactly how to calculate how much you can afford, it is a good idea to get familiar
with some of the specifics of those factors that will contribute to the overall figure you get.
You will need to know how to find out what you expect to get from your current property. This is
simple enough. Find out what you expect to get from your current house then subtract how much
you still owe on your mortgage.
Expect to get from sale of current property
-
What you still owe on your mortgage
=
What you expect to get from the sale of your current property
See a local estate agent to get an estimate on your house. But beware; estate agents are known to
slightly tamper the correct estimate to suit their financial needs if they believe you are thinking of
listing your property with them. You can visit a number of online estimate website that are reliable.
Assets and Savings
This figure should include your savings and other monetary investments that can cover your house
purchase. It may take a bit of time, but go through it all carefully to ensure you get an accurate
figure.
Affordable Mortgages
Here is the real key to your financial status. You need to heed some advice, especially if you are
a first time buyer looking to see how much you can comfortably afford on your first home: your
mortgage should never exceed more than a third of your net pay – or what you take home after
taxes. If you are a couple, then combine your net pay and work out a third of that.
You cannot expect lenders to be particularly trustworthy with leading you to realistic conclusions to
what you can pay, especially if this is not your first mortgage loan. Lenders can earn more with the
more you pay back on your mortgage, but the last thing you want to do is overstretch yourself. It
could mean repossession and a black mark on your credit record.
Try to bear in mind that the current economic climate may mean repossession for a good deal
of homeowners who have lost their jobs or can no longer afford interest rates attached to their
repayments. And being realistic with your money will provide lenders with figures that they can rely
on. That is something you need when lenders are being tight fisted with approving mortgages. If you
do get into this kind of trouble see our quick sale guide for ways to prevent yourself from getting
trapped.
Try to get the best UK mortgage deal for you by speaking to an experienced mortgage broker. It is the
simplest way to find out the best route to go down. Only ever talk to independent advisors, not those
situated in a bank or building society.
What Selling Your House Will Cost
1. Marketing Fees
The first costs you will encounter along the road to selling your house is marketing fees. These are the
costs to actually get your property up onto the marketing. So, let’s take a look at what kind of marketing
fees you could come by.
Estate Agent’s fees: This will cost you 0.75 to 2.5 per cent of your total house sale. It may not seem
much, but it is a good portion of the cream skimmed off the top, and you need every penny to put
towards that new house. Negotiate hard and always work with an independent estimate – try to avoid
relying on estate agent’s estimates.
You may decide that the best option for you is an independent house sale, where you advertise your
home through other means. For some this is not the best option, but if you have the time it can really
save you some cash. Selling your home by yourself can only cost you around £600, if done right.
2. Solicitor’s Fees
Solicitors are crucial to managing all the legal and most of the administrative work that comes with
property exchanging hands. You will need to find someone you know has a good reputation, because a
poor service could end up costing you more in the long run.
You may be wondering what you expect to pay for a good property solicitor. Well, that really depends
on their reputation and whether your house is freehold or leasehold – leasehold properties create a
good deal more work for your solicitor.
There is a lot of competition among solicitors now, so you may find some reputable law firms offering
you their services for less than 1 per cent of your property’s value – a good deal! The internet has
opened up a whole world of solicitors trying to compete with one another to sell your house, but avoid
using the very cheapest firms. Saving a bit of cash will seem pointless if you have had to chase your
solicitor for weeks trying to get simple things done on time.
You need to know you can trust your solicitor, because certain aspects of their work take time and
money. The last thing you want is to get stuck with someone you find a hassle to deal with. Your solicitor
should be working with you.
3. Mortgage Redemption Charges
A mortgage redemption charge is your exit fee on a mortgage. You need to enquire about these if you
are getting a mortgage.
Lenders may make you pay a redemption charge if you decide to switch your mortgage at some point,
or wish to pay the rest of it in full. Get advice from an independent broker for information on the rest
rates.
4. Removal Costs
It is hard to tell you what to expect where removal costs are concerned. Different removal companies
have different costs guidelines according to the services you need, it will include the quantity of
possessions you need removing; whether you need a boxing service; the distance to your new home,
and other factors.
Reallymoving.com is a good website to get some quotes on how expensive this process is going to be.
That is everything for what selling your house will cost, and in part 2 we will show you the different fees
that will need to be calculated to get the total of what buying your new property is going to add up to.
Property Valuations – The Basics (Step 1)
How can you be sure you’re getting a fair estimation for your property? It’s a question not asked very often, and estate agents get away with either over or under evaluating your house – one of the many little tricks they use to further their own gain.
But don’t despair, because we’ve put together an easy to follow step-by-step guide that’ll help you properly form an evaluation you can use when the estate agent comes over to give you a valuation.
The first step will focus on three areas:
1) Getting a feel for your local market
2) What houses were sold and how much they were sold for
3) Looking at what is currently on your local market
The second step will show you how to properly handle estate agents during the property valuation meeting.
Property Valuations – All the Factors (Step 1)
Although this stage is supposed to focus on the various factors that can influence the price of your house, there is one simple rule – or maxim – you need to remember: Your property is only worth what buyers will pay for it
With that in mind you can forget how much you paid for your home, the money you’ve spent decorating it and sprucing it up, and definitely forget how much you would like to get for your house. It’s a hard truth, but the only one that will allow you to set a fair and clear valuation.
You’ll need to know exactly what buyers will be looking at to determine what they’re willing to pay for your property. These are:
• How the price of your home compares to others on the market in your area
• How much similar properties in the area sold for
• How the property market is faring on the whole
It’s important to remember to stay flexible during the negotiation stages of solidifying a price with a buyer. It’s impossible to say exactly what your house will eventually sell at once you’ve set a price. A valuation works to give you a good base from which to begin the selling process.
Try to take an educated guess at what people would be willing to pay, but take into account the state of the property market, what similar houses are selling for in your area, and what similar houses were sold at.
How Much is Your Home Worth?
Now that we have the internet, looking up house sales and listings is much easier than the days when people were forced to rely solely on estate agents, who had a monopoly on information related to how long it took to make a sale, realistic house prices, and the state of the property market in the area.
At the moment rightmove.co.uk is arguably one of the leading resources for people looking to get a better idea of property listings and prices in any given area. You may also want to try hometrack.co.uk – The UK’s leading AVM (automatic Valuation Model) provider.
Righmove.co.uk is like an estates shop window with almost every property advertised across the UK. It’s now the easiest and most cost-effective way to attract people, with over 80 per cent of buyers searching Rightmove for a property.
When you’re using right move there are a few things you need to bear in mind; buyers are willing to pay more for similar houses to yours for a few reasons:
• It might be in a better location
• Private outdoor space
• More double bedrooms
• Detached, or semi-detached – This has a significant impact on price
• New bathrooms and kitchens play a role in price factors, especially if they’re modern
• Alarm and security systems
• Time left on the lease
There aren’t set prices when it comes to valuating all these factors together, but it’s worth noting what makes a house more valuable. Know your competition, sell the good features of your property, but don’t try to sell your home for the same amount as the detached 4 bedroom with the loft conversion and brand new fitted kitchen three streets away.
The best thing to do is to try and put yourself in the shoes of a buyer and honestly appraise your house according to location, size and condition of the property market. You might also want to try sneaking around estate agent’s offices pretending to be a buyer.