fee's associated with purchasing a house outright

65
Found 22nd Jan 2013
just running through some things in my head, had a bit of a google trawl but what fee's would you incur for purchasing a house outright for cash?

let say the house is worth £100k

solicitor fee's? have it surveyed,

and what fee's would you incur when selling the property?

it know you can get letting agents taking between 1-1.5% of total sale value

if anyone knows a link to a site which provides a quick synopsis of the costs that would be great

have had a bit of a google but couldn't find much

65 Comments

Banned

Not much difference than with a mortgage but no arrangement fee

Buyers dont usually pay estate agents costs.
If you buy at auction you will have to pay the auction house something though

if you are referring to buying out an existing mortgage, it will depend on the t&cs attached to the deal

You wouldn't have to have a survey if you don't want. Lenders stipulate you must to make sure their investment won't fall down and such.

I would, but you don't have to. If you've got £100k and want to buy a £100k house then why not get a loan or tiny mortgage to cover costs like this?

Less than £3k I would guess

It really depends quite heavily on where you are in the UK

solictor fees are about £1000 but its varies,same selling plus estate agent fees

Banned

^^or offer 97k sancho
Edited by: "goldmax" 22nd Jan 2013

sancho1983

You wouldn't have to have a survey if you don't want. Lenders stipulate … You wouldn't have to have a survey if you don't want. Lenders stipulate you must to make sure their investment won't fall down and such. I would, but you don't have to. If you've got £100k and want to buy a £100k house then why not get a loan or tiny mortgage to cover costs like this? Less than £3k I would guess



Many lenders have a minimum amount that you can actually borrow on a new mortgage.
Edited by: "WoolyM" 22nd Jan 2013

Banned

Your free to use any surveyor you choose and solicitors fees will be cheaper as they don't have to deal with a mortgage company.

Tree fiddy?

goldmax

^^or offer 97k sancho



Well yes, that would be even better! Or even £95k

if you can afford to buy outright is it that much of an issue?

There would be stamp duty if your price is over 125k as well.

You'd be daft not to get a survey done if you're buying down south too - £150 for a basic survey.

Original Poster

ok look ill produce a basic model:

buy a house £100k outright, cash

spend £1k on the associated fee's with completing

spend £2k (and a fair whack of time) fixing up the house and make it worth more

spend £600 in a couple of months on council tax and electricity (do you need council tax if you don't live somewhere?)

sell the house for £110k

lose £1,100 on agency fee's

basically the net = equals around £5,300 quid

lets say i have released that money from an existing house mortgage which would require £500 payment per month to cover that mortgage

net equals £4,800

let say i split that money between me and another person who would be doing the work, its not a bad bit of money each...

obviously there are risks involved related to purchasing property, housing market, but what am i missing, there must be something.. i am completely ignorant to in the realm of buying and selling property, when would tax come into effect on this sort of activity..


Edited by: "N1K0LAI_DAN7E" 22nd Jan 2013

When you sell the property any costs would vary according to whether it was your primary residence or not and what gain if any that you make

Original Poster

WoolyM

When you sell the property any costs would vary according to whether it … When you sell the property any costs would vary according to whether it was your primary residence or not and what gain if any that you make



so lets say it is the only property i own, but not my place of residence which would be rented accommodation, and i make £2,500-£5,000

Ok so from the tax point of view, it would not be your primary residence so there would extra tax to pay

You're presuming you will sell it immediately. Nearly £1k per month on mortgage, electricity, council tax etc. will eat into any 'profit'

You are also presuming you can add £10k with only spending £2k

And you are presuming you won't pay capital gains tax

Banned

sancho1983

Well yes, that would be even better! Or even £95k



Good idea, leaves a couple of k for some new windows ,wink,wink

Original Poster

sancho1983

You're presuming you will sell it immediately. Nearly £1k per month on … You're presuming you will sell it immediately. Nearly £1k per month on mortgage, electricity, council tax etc. will eat into any 'profit' You are also presuming you can add £10k with only spending £2k



completely there is the risk around selling, but by not having a mortgage i would offset a massve amount of this surely?

Banned

lol at investing 100k for a 2400 profit.

scrap this scheme and find a house at auction that will make you more profit.

solictors selling fees plus mortgage repayments on the 100k.

Also it might not sell straight away buyer might mess about,pull out.For maybe a couple of grand is it really worth it.

Original Poster

WoolyM

Ok so from the tax point of view, it would not be your primary residence … Ok so from the tax point of view, it would not be your primary residence so there would extra tax to pay



do you have any idea what level extra would be?

or tbh do you have any idea on who would be best to speak to about this kind of thing, mortgage lenders?

Original Poster

coloradorockies

solictors selling fees plus mortgage repayments on the 100k.Also it might … solictors selling fees plus mortgage repayments on the 100k.Also it might not sell straight away buyer might mess about,pull out.For maybe a couple of grand is it really worth it.



people are seriously missing the point here... there is no mortgage in this fictitious model

Current rate of Capital Gains Tax

For gains made on or before 22 June 2010, Capital Gains Tax is charged at a rate of 18%.

From 23 June 2010 onwards, the rates are:

18% and 28% for individuals (the rate depends on your total taxable income 28% for trustees or personal representatives of someone who has died 10% for gains qualifying for Entrepreneurs’ Relief

N1K0LAI_DAN7E

do you have any idea what level extra would be? or tbh do you have any … do you have any idea what level extra would be? or tbh do you have any idea on who would be best to speak to about this kind of thing, mortgage lenders?



An accountant or tax adviser or probably there is info on the Goverments website somewhere

Banned

It is hardly worth it, and buying a house without a survey is not a wise idea, stick your hundred grand somewhere else, as said it may take a year before you are rid again, you could make the 2 to 5 grand in a year investing your money in a bank/building society bonds, etc

Original Poster

sancho1983

Current rate of Capital Gains TaxFor gains made on or before 22 June … Current rate of Capital Gains TaxFor gains made on or before 22 June 2010, Capital Gains Tax is charged at a rate of 18%.From 23 June 2010 onwards, the rates are:18% and 28% for individuals (the rate depends on your total taxable income 28% for trustees or personal representatives of someone who has died 10% for gains qualifying for Entrepreneurs’ Relief



10%

well that puts it in out of my mind

Banned

Why not let the house long term, depending on the area you could get back 6 - 8 % per year

Original Poster

FYI i was looking at this as more a form of self employment, rather than just an investment opportunity for money

N1K0LAI_DAN7E

people are seriously missing the point here... there is no mortgage in … people are seriously missing the point here... there is no mortgage in this fictitious model



I understand. Why would you talk to a mortgage provider though?

I would say it's too risky for that large an outlay with poor return.

Banned

if you have 100k to buy property then put down 20k on four 100k houses and rent them out leaving 20k for any extras

N1K0LAI_DAN7E

FYI i was looking at this as more a form of self employment, rather than … FYI i was looking at this as more a form of self employment, rather than just an investment opportunity for money



So you want to be a builder?

N1K0LAI_DAN7E

people are seriously missing the point here... there is no mortgage in … people are seriously missing the point here... there is no mortgage in this fictitious model


I thought you were mortgaging an existing property to get the 100k.Where is the 100k coming from then??
Edited by: "coloradorockies" 22nd Jan 2013

Original Poster

sancho1983

I understand. Why would you talk to a mortgage provider though? I would … I understand. Why would you talk to a mortgage provider though? I would say it's too risky for that large an outlay with poor return.



i mean thats just an example i suppose, the reality is you coudl get one for 100k, spend 4k and sell for £120k,

equally you could get one for £100k, spend £2k and end up selling for £95k if you screwed it up.. i would say there is the potential for more and less.. it is the more that is appealing...

Original Poster

sancho1983

So you want to be a builder?



not necessarily but i know someone who is a damn good one, rather undervalued, and would have nowhere near the captial or financial background to get anything like his own property development off the ground,

i feel there is potential to use him and mutually benefit one and other
Edited by: "N1K0LAI_DAN7E" 22nd Jan 2013

Banned

http://www.thesundaytimes.co.uk/sto/multimedia/archive/00318/map4_318365a.jpg

N1K0LAI_DAN7E

not necessarily but i know someone who is a damn good one and rather … not necessarily but i know someone who is a damn good one and rather undervalued



house auction?

Banned

why arnt you thinking about gearing.

Buy a 250k bungalow with a 50k deposit spend 40k on 2 room loft conversion and sell for 30K upwards profit
Edited by: "slamdunkin" 22nd Jan 2013
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