Although the property itself will be your greatest cost by far there are other hidden costs involved in buying property.
We've covered financial tips for home buyers before but it's important to also consider the hidden costs which can catch people out.
Costs vary hugely based on the cost of the property and the companies you engage to help you buy property.
I've tried to include a guideline of costs but the main aim is to make you aware that there will be additional costs. That way you can include both the obvious and hidden costs of buying property into your budget.
If you're in a hurry and want a very rough guideline budget factor in around $10,000 for the hidden costs of buying property.
Otherwise here are the main hidden costs of buying property so you're prepared.
You will need a building and pest inspection and may also need an electricity safety switch, smoke alarm and swimming pool inspection. A combined building and pest inspection will cost roughly $300-$600 with a swimming pool inspection fee an additional $150-200.
Most of the relevant property searches such as flooding and lot information are free of charge from Brisbane City Council. Only if you're intending to renovate or rebuild the property will you need to pay for zoning information from the council.
Basic conveyancing legal fees from a qualified legal firm usually start from $700 for a straight forward property buying transaction. If you want to know exactly how much your legal fees will be give us a call on 1300 224 278 or email us now for a fixed quote.
There is usually a one-off cost charged by the bank when you apply for a loan. Sometimes banks waive this fee if you’re taking out a packaged loan so it's worth asking. Otherwise budget around $600 for your loan application or establishment fee.
If you're borrowing more than 80% of the value of the property the bank may also make you take out lenders mortgage insurance which could cost up to $8,000.
You may also need to pay a bank valuation fee of $300–$400 before you can get your loan.
Registration of title
The cost of registering the title with the Queensland state government is currently $75.
When you buy a property, you’re required to pay the vendor the remaining yearly or quarterly rates, both water and land rates. These will begin from the date of settlement and will be individual to the property and area. Council and water rates may cost $500–$700.
As soon as the property goes into your name you need to take out building and contents insurance to protect you against fire and flood. Property insurance may cost anywhere from $500-1000 per year.
The Real Estate website has a useful stamp duty calculator. The cost depends on the cost of the property and first home buyers will only need to budget for transfer fees.
Other home buyers should budget $10,000 on stamp duty for a $500,000 property.
If you're buying the property to move into removalists could be a major expense. Depending on if you're moving from around the corner or interstate and how much stuff you have you should budget anywhere from $500-3000 for removals.
Changing Service Providers
Compared to the other costs involved in buying property these costs will be small but it's good to be aware of them. For example, switching your pay TV service from one address to another can cost $100 while the redirection of your mail could cost around $13 for a month or $66.50 for 12 months.
All those little extras add up.
How do you plan to cover the hidden costs of buying property?
How can Charter Conveyancing help you?
Offering conveyancing services throughout Brisbane with offices in Mount Gravatt and Aspley we can take care of your conveyancing and general legal needs. Contact us today to find out more or to book a free consultation.