What are the Hidden Costs of Buying Property?
Buying your first property is one of the most exciting moments of your life. However, before you make the decision to buy your first home, there are a number of other costs that you should be aware of. By being aware of these costs, you’ll be able to budget for your move and ensure there are no hidden surprises along the way. In this article, we’ve listed out some of these costs, so you can arrange your budget.
You’ll want to arrange for inspections before you begin negotiations on the property. This way, you’ll know the state that the property is in before you make an offer.
Inspection reports can cover a number of things, including, building and pest inspections and pool inspections. The average cost for a building and pest inspection is $400-$600, while a pool inspection will cost $170-$350.
Before you purchase the property, a number of searches need to be carried out to ensure that all the legal information surrounding the purchase is correct, and to ensure that there are no encumbrances on the property.
In Queensland, you can buy property title searches and survey plans online via the government’s website. There are also a number of other searches to consider, including:
- SmartMaps showing current information on property boundaries, valuations and sales data
- Environmental property searches
- Mining permit and applications
- Vegetation property report
- Title searches of other registers
If you instruct a conveyancer to deal with the property sale (which is highly recommended), then they will conduct the searches on your behalf and tell you which are applicable to your purchase.
Legal Costs for Conveyancing
Conveyancing is an essential part of buying a property. Fees for conveyancing vary, but if you’d like to discuss a , then please contact us.
If you’re applying for a loan to buy your home, then depending on the type of loan you’re taking out, you might be charged a finance fee for your loan application.
Likewise, you may also have to pay a bank valuation fee, and if your loan is for more than 80% of the value of the property, then you may be required to take out lenders mortgage insurance.
Discuss all of these options with your bank and ensure that you know all of the fees and charges associated with the product they’re selling you before you sign.
When you purchase the home, you will need to register the title with the Queensland state government. All of the information for the fees associated can be found online.
When purchasing the property, you may be required to pay the vendor for the remaining rates (these may be paid yearly or quarterly). You’ll owe money from the date of the settlement, and the costs that you pay will be individual to that property and that area. Your conveyancer will work out these adjustments for you at settlement so everything is squared away.
When you sign the contract, the property is at the purchaser’s risk. If you are confident the contract is proceeding, very early on you must obtain insurance for the property. This is done shortly after signing the contract, not on settlement. For this, you’ll need buildings and contents insurance to safeguard your new property against fire, flooding and theft. The amount you pay for this insurance will once again vary depending on a number of factors. For example, properties located on or near riverbanks will be more expensive to insure because they’re more liable to flood.
Transfer Fees and Stamp Duty
As the purchaser, you’ll need to be prepared to pay transfer fees for the property. For future transactions, stamp duty will apply, which will depend on the price paid for the property.
Depending on how far you’re moving and how many things you’re moving, then removal costs could be a major expense. To help keep this cost as low as possible, be sure to shop around for quotes, as the first one you get may not necessarily be the best.
Changing Services Across
Once you have a date for moving into your new home, you’ll also need to switch across all your services, such as electricity, water, any paid or satellite television services, and have your post redirected. There’s normally an administration fee for this and, although it’s only a small charge, it can add up across multiple providers and is something you should budget for.
Hopefully, this guide has given you a good idea of all the extra charges and hidden costs of buying a property. Armed with this advice, you should now have no problem budgeting for your move, allowing everything to go smoothly. If you have any questions or we can assist you with your conveyancing, contact us.