3 hidden costs of buying a home
Buying a home is an enormous achievement and may be the largest purchase you make in your entire life. Understandably so too, as at Australia's current prices you'll be paying almost $770,000 for a home in one of our five biggest cities – a lofty sum for all but the mega-rich.
It's hard enough to save and go through the entire process when you know exactly what's around the corner, so unexpected costs can cause serious difficulties – not to mention stress. With the goal of ensuring that the process of buying your home is free of nasty surprises, let's have a look at some of the costs that commonly catch homebuyers unaware.
It's important to research the exact cost of your the stamp duty with your local state authority.
The dreaded stamp duty is a fairly large cost that can surprise buyers who haven't done their homework. It varies state to state, depending on what you're using the property for (investment, first home) and how much your property costs to buy.
Working with CoreLogic's five-city median unit price of $590,000, and using stamp duty calculators – Australia we can work out some rough examples of what this cost may be.
If you're buying in NSW, you're looking at a fairly low stamp duty of roughly $10,000, while purchasers in the Northern Territory will be looking at close to $30,000. In other states, the cost will be between these two figures, usually around the $15,000 to $25,000 mark.
As these are only examples, it's important to research the exact cost of your stamp duty with your local state authority, as you may need to plan for such a large extra cost.
If you have absolutely no idea what conveyancing is, you're not alone. This term essentially refers to the paperwork of buying a property, which includes drawing up the contract of sale and other documents.
It's possible to do all of this yourself, however for most people, it's easier to hire a lawyer or conveyancer than to worry about all the little details. The Australian Institute of Conveyancers estimates that these costs will be between $900 to $2,200 – a hefty sum, but one that shouldn't cause any problems if you've planned for it.
Pest and building reports
Before buying, it's essential that you ensure the property is structurally sound and devoid of termite infestations or other costly issues. This is especially important when purchasing an older home, as despite their charm and character, they are more likely to have issues like these.
The cost of a termite inspection report should be around $250 to $350 according to the Australian Pest Control Association, and a building report should be roughly the same. Getting these reports done may be slightly inconvenient, but can save you a lot of money in the long run. In fact, treating a termite problem could set you back as much as $5,000 and fixing structural problems with your home could cost even more.
The cost of a termite inspection report should be around $250 to $350.
Know what's coming every step of the way
Buying a property can be a long and arduous task, particularly if you're not prepared and haven't done it before.
Instead of shouldering the whole load by yourself, and having to extensively research the market and property that you purchase, enlist the help of a buyer's agent from Cohen Handler.
Helping people find the perfect property for their needs is what we're best at and we're legally obliged to work in your best interests. With us, you'll know what's happening every step of the way, and none of the costs will be unexpected.