When you’re looking into buying a property, adding up all the potential additional costs can be difficult. People often forget just how many costs there are. It’s important that you add up, or prepare for, all the potential costs so you’re not left surprised or short by the end of the process. Here are some of the costs you need to consider when you’re looking to buy a new home.
Your estate agent fee
Many people question the need for the real estate agency to send one of their employees to assist you with the property. These days, most buyers find their properties online and will research that property quite a lot there. What the agents once did, we now largely do ourselves. But a real estate agency will provide an agent anyway.
Of course, there are benefits to having a buyer’s agent handy. They will have the most accurate information about the property. You can’t have complete trust in what you read online; for one thing, it may be outdated. The understanding, evaluating, and presenting of correct information to the buyer is still in huge demand.
The fee that you end up paying by the end of the process will depend entirely on the agency and what the agent did. There’s not really a fixed or consistent rate for agents across the country. Consult the agency about this fee as early as you can.
Stamp Duty tax
The Stamp Duty tax is a sneaky and arbitrary tax. Unfortunately, that doesn’t really decrease our need to pay it!
This tax is based on the price of the property being bought. That is to say that the percentage of the total value increase as that total value increases. So let’s say you’re buying a property for £125,000 or less. £125,000 is the threshold for Stamp Duty; you won’t pay anything extra at this price or lower. But if the price is just one penny more, you have to pay 1% tax. At £250,000, it’s 3% tax. At over £2m, it’s 7% tax. This means that a penny over one bracket and into another will cost you thousands.
Something to remember: the tax rate is set at an absolute level. You’re not paying 1% tax on everything above £125,000 (this would be tax at a marginal level). That 1% is calculated from the entire value. You need to keep Stamp Duty in mind when buying a home. A Stamp Duty Calculator can help you work out what you need to pay and may even help you save some money.
Inspections
Getting the property professionally inspected isn’t absolutely necessary. But if you’re going to sink a lot of money into a property, it would seem silly not to get it done. If there are any structural or mechanical weaknesses, they need to be found. There are also pests to consider such as mice or wasp nests.
In a fair world, all of this would be done by others out of their pocket. And in many cases the previous homeowner will be have gotten an inspection and can provide you with proof. But they’re not legally obligated to have the property inspected in this way. If it hasn’t been done, you should get it done. The cost can be anywhere in the £200-£500 range, depending on your area and the size of the property.