Buying Real Estate: A List of Costs
As you probably are aware, buying property is very costly, and some people go ahead with a house purchase without having taken all the costs into account, which can lead to stressful situations. In order to assist you regarding essential costs, here is a list of expenses that you are likely to incur when you buy real estate.
- Mortgage Fees – If you deal with an independent mortgage broker, then their services would be free, as the lender gives the broker a small commission, but otherwise, you will have to pay for the administration of your home loan.
- Building Inspections – There are two ways to have a property inspected, you can leave it to your real estate agent to arrange, which will cost you more than if you simply went online and contacted Jim’s Building Inspections in Perth who has the lowest prices for all types of building inspection. It is essential that you have any property you are looking to buy inspected by a qualified building inspector, otherwise you are risking everything.
- Estate Agency Fees – The real estate agent should be receiving a commission from the seller, so you should not have to pay estate agent fees when looking to buy. The seller traditionally pays the agent an agreed commission for selling the property, so you shouldn’t be paying until you decide to sell up and relocate.
- Relocation Expenses – Of course, you need to factor in the removal costs when you first move into your new home, and it doesn’t end there, as you will gradually need to buy fixtures and fittings. Don’t forget to include tour removal costs when crunching the numbers, unless, of course, you have some able-bodied friends with a big truck. Here is a great article on improving your home over time, which is recommended reading.
- Tax & Stamp Duty – You will have to pay some tax, but a first-time buyer should be exempt from paying stamp duty, which is something your mortgage broker can check for you. The Australian government understands how difficult it is for the first-time buyer to get their foot on the property ladder, and if you qualify, there is financial support there. Click here for more information about taxation when buying and selling real estate.
- Legal Fees – You will have to pay a lawyer to oversee the title deeds transfer, and there are online solutions that are relatively inexpensive. You need a legal expert to inspect the contract of sale, which will give you peace of mind. If you shop around, you could save some money, perhaps by hiring a semi-retired lawyer, who freelances their services.
Yes, it is expensive to purchase real estate, and by adding everything up, you should be able to check whether or not you have the necessary funds to complete the purchase. If it works out that you are not quite there, wait a year or two and you will be in a better position financially.