For the majority of people living in Australia, buying a property is one of the biggest financial decisions you will ever make. You may only purchase one, two or three homes throughout the duration of your life. Avoiding mistakes and understanding how to mitigate the risks, is crucial to your financial future.
In this blog, I outline all of the extra costs that are involved when you are looking for your next home. I hope you find this information helpful as you search for a property.
LOAN APPLICATION – This is a one-off fee charged by the bank when you apply for a loan.
BANK VALUATION – Your lender may charge you for arranging an independent valuer to assess the value of the property you’re planning to buy.
STAMP DUTY – Calculated as a percentage of the purchase price. Stamp duty tax is one of the main revenue streams for the state government. Each state uses different formulas to calculate it. There are certain concessions available for various types of buyers. http://stampdutycalc.com.au/
BUILDING INSPECTION – The purpose of a building inspection is to inspect the structural integrity of the property to ensure you are not buying someone else’s problem (lemon). When you walk through a property that is staged for sale, your eyes can wander to the furniture or the views overlooking the rear yard. It’s very easy to become emotional and purchase a property with your heart and not your head. A building inspector will look at the hidden parts of the home that you cannot see. There is also a significant chance that the owner hasn’t inspected the roof void or under the house. So they innocently, might not be aware of any issues with the property.
PEST INSPECTION – Certain areas of Melbourne are prone termites areas. Termites are soft-bodied insects that live in large colonies, typically within a mound of cemented earth. They feed on wood, and can be highly destructive to trees and timber.
These little insects are attracted to damp areas, and they eat through timber, like a knife through butter. I have seen first hand the damage that a colony of termites can cause to a house. In some cases, the structural integrity of the house can be affected.
CONVEYANCING / SOLICITOR COSTS – Conveyancing is the transfer of property from one owner to another. Your legal team plays a crucial role; they will facilitate and manage this process for you. Our advocates have access to some of the best conveyancers in the business. They often review a section 32 and contract of sale, in a matter of hours.
TITLE INSURANCE – This is insurance to protect you from any claims against the title of your property.
LENDERS MORTGAGE INSURANCE (LMI) – Charged when you have a deposit of less than 20% of the purchase price. LMI acts as a security to the lender, who considers you a ‘high risk’ borrower with anything under 20% deposit.
COUNCIL RATES – When you purchase a property the previous owner may have paid the rates in advance. If this is the case, the amount that paid is refunded back to the former owner and you are required to pay this amount upon settlement.
In a highly competitive marketplace, time is of the essence. Having access to a trusted team allows you to act quickly and can mean the difference between securing the property, and missing out.
Over the years, we have built relationships with some of the most trustworthy and professional people in the real estate industry. We understand the importance of having a team of professionals by your side, to ensure one of the biggest decisions is handled with care.
If you need any assistance, don’t hesitate to speak with one of our Property Buyer Agents on +61 8374 7652 or book a zoom call here