by Mark Johnston
Buying a property is a huge financial commitment and therefore it is crucial for potential buyers to factor in all additional costs into their budgets.
The most common cost after the solicitor’s fees is stamp duty and this is based on the value of the property.
Stamp duty is levelled in bands of 1% on properties between £125,001 and £250,000, 3% on properties between £250,001 and £500,000 and then 4% on properties above £500,000, for example the stamp duty on a property valued at £200,000 would be £2,000.
Once the process of buying a house has been started if the sale was to fall through buyers should be aware that fees due such as for a valuation or survey will still need to be paid as does the solicitor if they have started any legal work.
Once the solicitor is satisfied with their searches, the surveyors report has been received and the formal mortgage offer has been received, the final contract between the buyer and seller is prepared.
At exchange of contracts both the buyer and seller are then legally bound and the sale of the property has to go ahead.
Buyers will also have to pay a deposit on exchange of contract, this is usually around 10% of the purchase price but it may vary. The seller’s solicitor will keep hold of this till the completion date which is usually a few weeks later.
It is only when the contracts are signed and exchanged that a completion date is given and this is usually decided between the buyer and seller.
It is at this point that the potential new owners should now make sure that they have buildings insurance arranged for the new property as once the contracts are exchanged they become responsible for the property.
Completion of the purchase usually takes place between 2 and 4 weeks after contracts have been exchanged, although in some cases it may be sooner.
The time between exchange and completion can be used to pack and arrange removals. Arrangements should also be made for the supply of gas and electricity. The seller should also now take final meter readings at the property.
Completion is the last legal hurdle to face. A lot will happen on completion day, so it may be worth taking time off work to ensure everything goes smoothly.
On completion day the mortgage lender will release the money to the seller, less the deposit amount, the deeds to the property are handed over to the solicitor, the solicitor will also complete a tax return to pay the stamp duty, which needs to be signed and finally the seller will hand over the keys to the estate agent or solicitor and must leave the property.
The solicitor will usually send their bill on or soon after the completion date.
With the sale complete and the funds transferred the new home owner will be able to collect their new keys and move in and enjoy the new home!
Story link - Buying a House Part 5
Related stories to : Buying a House Part 5