Buying a property is a significant investment – quite likely the largest of your life. However, many prospective first homebuyers are not informed of just how long the charge may run. A set of additional expenses will follow the purchase price asked by the vendor. Hence, before you make the bid or sign the contract of sale, it is a good idea to learn all your ‘hidden’ out-of-pocket payments – both before and after the sale.
Pre-purchase Research
Pest and building inspection can uncover a lot of things about a property. Once you are sure about purchasing a property, consider obtaining an independent, qualified contractor’s report. Keep in mind. It will likely cover only significant structural issues, not minor deficits. Based on the location and size of the property, the report may cost you between $400 and $1000.
You can take the assistance of your conveyancer or lawyer to find a suitable inspector. Alternatively, when you are looking to purchase an apartment, you should also get a strata inspection report, which shows the financial standing of the strata scheme and can inform you of any significant works on the cards.
Council And Utility Rates
The conveyancing method enables you to find any outstanding water and council rates when you purchase a house. The seller and buyer share these costs in balance to the length of time each party held the property during the period. The same applies to strata rates. Make sure you have the budget to pay upfront utility costs on a pro-rated basis.
Legal And Conveyancing Fees
Engaging a conveyancer or solicitor is a crucial step in the home-buying process. They can assist you right from reviewing the contract of sale to transferring the legal title of the property into your name. Again, based on the complexity of the terms of purchase and location of the property, the amount you spend on their services may vary. On top of the legal charges, be prepared for additional expenses involved in the process, like various council certificates and title searches.
Registration And Mortgage Transfer Fees
Mortgage and transfer registrations are extra expenses charged by the territory and state governments. They are designed to cover the government’s costs for transferring property title into your ownership and registering the property as security on your mortgage.
Stamp Duty
This is the government tax that you pay on property purchases. It is calculated using a sliding scale to the relevant state, the property’s market price, and whether you intend to use it as an investment or live in. However, for first home buyers, this amount varies.
These are a few of many out-of-pocket expenses. It is always beneficial to consult a first home buyers’ specialist to learn about these hidden costs. It will help you plan your budget efficiently.