You’ve saved the deposit, got the green light from your lender – and after weeks of open homes and auction nerves, finally found the right property.
But just when you think you’ve crossed the finish line, the expenses start to creep in.
Beyond the obvious purchase price of a home, there’s a range of additional costs that can quickly add up… and while a proactive mortgage lender can ensure these fees are factored into your budget from the outset, it’s not always the case – and even experienced buyers can be blindsided by the costs.
So what exactly are they? Let’s walk through what each involves.
1. Stamp duty
Stamp duty (also known as ‘transfer duty’ or a ‘transfer fee’) is often the single largest expense when purchasing a property. In NSW, the amount varies depending on the property purchase price, and whether you’re an owner occupier or investor. While concessions and exemptions exist (such as the First Home Buyers Assistance Scheme), most buyers will still need to factor this into their budget well in advance; a property priced around $800,000 for instance, can equate to tens of thousands of dollars in stamp duty – see an online calculator like this one to estimate yours, or get in touch with your lender.
2. Conveyancing and solicitor fees
Typically ranging from $1000 to $3000 depending on the property, conveyancers and solicitors are crucial to ensuring that all legal aspects of the sale are handled appropriately – from reviewing contracts and conducting searches, to advising you on legal risks and managing your property settlement. A good conveyancer will read the fine print, so that you don’t have to – and in the maze of property paperwork, it’s worth spending on a reputable one.
3. Building and pest inspections
Before committing to the purchase of a home, it’s best to arrange a professional building and pest inspection. These inspections provide written reports that identify structural issues, such as water damage, pest infestations or the potential of other major issues down the track.
Costs vary, but most buyers in NSW can get a reliable pest and building report combined for around $400 – $700.
4. Bank fees e.g. loan application
Thought you’d settled the bank transaction, only to find out you’ve been charged additional fees? Depending on your bank, lender and loan product, these can vary greatly – so it’s worth comparing options to minimise them. As some may be negotiable, be sure to discuss the common ones with your trusted lender, which include:
- Loan application fees
- Valuation fees
- Settlement fees
- Ongoing account fees
5. Moving costs (particularly if you’re upgrading)
If you’re selling to buy the next home, double the logistics often means double the cost. Removalists, temporary storage, cleaning services, utility disconnections and reconnections can quickly add up to a couple of thousands of dollars on average, so best to factor these into the budget upfront.
The bottom line
Buying is one of the biggest financial decisions that most people make, so understanding the costs (and budgeting for these!) through a trusted lender will mean a much smoother path to settlement.
Prudential Real Estate Macquarie Fields | (02) 9605 5333 | macquariefields@prudential.com.au
Prudential Real Estate Narellan | (02) 4624 4400 | narellan@prudential.com.au
