The costs of purchasing a property
Angela Laird, property manager at McQueen Legal, advises on what costs you need to account for when buying a home.
When you are buying a property, it is necessary to use a solicitor for the legal work that needs to be done. You should approach local firms of solicitors or ask friends and relatives to recommend a suitable firm. Before making a choice of solicitor, you should ask for estimates of their charges for buying a property.
- Check whether the figure quoted is a fixed fee or is determined by how much work is involved or the level of the purchase price
- Check that the figure includes Land and Buildings Transaction Tax, search fees, registration dues, (registering your title at land register) expenses and VAT and get a breakdown of these costs
- Check the charges include noting interest and submitting offers
- Check what charges, if any, will be made if your purchase falls through.
Conflict of interest
You cannot use the same solicitor as the seller because the solicitor cannot act for both buyer and seller. It is an advantage to use a solicitor who has a good knowledge of the local housing market who can advise you on what to look for when you are viewing a property and give you sound advice on pitching your bid in the current market.
If you already have a mortgage lender you may need to check if the solicitor you choose is on your lender's panel of solicitors. Some lenders have their own panel of solicitors and if your chosen solicitor is not on their panel, then they cannot act for the lender and this will add to your costs.
Once you have found a suitable property you wish to note interest or make an offer on, the selling solicitor or agent will provide a copy of the Home Report which can be requested through the selling agent or through ESPC.
The Home Report is a document comprising the single survey, a property questionnaire completed by the seller and an Energy Performance Certificate. The surveyor who produces the single survey has a legal responsibility to provide accurate information to both the seller and the buyer.
You should consider getting your own survey as well as the seller's single survey especially if you have any concerns about the condition of the property. If you are buying the property with a mortgage, the lender may insist on having a survey for mortgage assessment carried out, to be paid for by the buyer. There are three main types of survey, or inspection:
- Mortgage valuation report (scheme 1 survey). A mortgage valuation is the least expensive type of inspection and provides a valuation of the property for the purposes of getting a mortgage
- Home buyers report (scheme 2 survey). The home buyers report will consider not only the value of the property but will also examine the structure of the property and should identify any existing or potential problems
- Full structural survey (or buildings survey). A full structural survey is expensive but provides a thorough and detailed inspection of the property
- If the surveyor reports that there are some problems with the property, you will have to consider whether you still want to go ahead with the purchase. In some cases it may be necessary to ask specialists to estimate the cost of carrying out necessary repairs.
- Always ask advice from your solicitor if there is anything at all you are concerned about in the Home Report as your offer will be subject to a satisfactory report. You may find, for example, the surveyor has noted some damp in the property, therefore your offer should be subject to a damp contractor carrying out a further inspection before you progress further with your purchase.
For more information or to speak to one of our property experts, pop into the ESPC showroom or give us a call on 0131 624 8000.