Costs of Purchase
The costs of purchase include the following:
Stamp Duty (tax):
for properties Builders North Wales up to £125,000, stamp duty = 0%;
for properties over £125,000 and up to to £250,000, stamp duty = 1%;
for properties over £250,000 to £500,000, stamp duty = 3%;
for properties over £500,000; stamp duty = 4%. Bizarrely the rate quoted is payable on the ENTIRE purchase price, eg a house priced £251,000 is liable for £7,530 stamp duty, whereas one at £250,000 is liable only for £2,500. It follows that it is very well worth negotiating a reduction to take a property just below a stamp duty threshold.
Legal fees – generally consisting of lawyer’s fee plus those of any searches carried out
Land registry fees
Valuation/inspection (survey) fees
Mortgage “arrangement” fees (essentially points, an up-front payment in return for better rates)
A chain is where you wish to buy a house from Mr A, but Mr A is waiting to buy a house from Mr B, and Mr B is waiting to buy a house from Mr C etc. In view of the late stage of fixing a completion date chains occur all too frequently in English real estate transactions.
The only way to avoid getting caught in a chain is to limit your search to properties listed as “no chain” or “vacant possession” (unoccupied). It is also worth getting your lawyer to confirm this as part of the conveyancing process.
Gazumping and Gazundering
As we’ve already said the English real estate system is fraught with frustration as buyers and sellers may change minds or walk away right up to the last minute. Two common reasons for doing so are “gazumping” and “gazundering”. Though it’s hopes that readers will never encounter them it’s worth defining them here.
Gazumping is where a seller accepts one offer but keeps marketing the property and eventually accepts a higher offer. The maker of the first offer is left out of pocket to the tune of inspections, legal fees, and mortgage fees incurred to date.
Gazundering is where a buyer, having had one offer accepted, subsequently makes a lower offer. This may be genuine, in the light of faults identified on inspection, or may be based upon pure greed arising from the seller’s need to sell quickly.