Second Time Buying - How does it work

Financially_Prudent

First post, so be kind to me.

I am after some advice. Bought first house with girlfriend [now wife] in May 2005. We now want to move to bigger 3 bed house. Saw a property we both liked. So put our house on the market at £219,950. First viewer to see the first day on the market put an offer in at full asking price!!, however situation was complicated. Second viewer also put full asking price offer in on day two. I am beginning to wonder if we have under valued the house, but we are happy with the price achieved, so accepted the 2nd person's offer.

We have put an offer in on a 3 bed house which looks like it will be accepted, as first offer was declined.

In terms of financing, we will have £52,000 equity [after stamp duty, solicitors and agent fees, have been taken in to account] to put against the offer price of £285.000. meaning we need a mortgage of £233,000.

We don't have the actual funds to pay the £12K moving costs [stamp duty, sols fees and agents fees] these will need to be taken from the equity [£64k - £12K fees]

How does this work in principal? Will the solicitors fees and agent fees be worked out at completion and taken from the equity?

Thanks for any advice provided.

Financially Prudent

JennyW_2

yes your solicitor will pay all fees upon completion (ie stamp duty, disbursements, his fees, estate agents, any mortgage redemption fees) from the equity in your property so try and work out what it will cost so you can account for it.

just to add, your solicitor will provide you with a cost of fees for their services to handle the sale and purchase for you, so just add this to what your EA wants and other fees. We were able to work it out what we needed to allow within about £10

tazgirl

Be aware though that you will need some money up front - although it may differ by solicitor. While all our EA fees, solicitors fees and stamp duty were taken from the equity, we did have to pay the solicitor up front for the searches on the new property (around £200), any mortgage reservation fee for the new mortgage you're getting, and most importantly the balance of your deposit. Some of this will be passed up the chain - so if your buyers are depositing 10% of £220k, but you need to deposit 10% of £280k you'll just need to find £6k to pay your solicitor before exchange. I believe that some solicitors will cover this for you, but I've not come across that.