The 7 ‘Hidden’ Costs of Buying a Home: Part 2
Written by Ben Saravia,
Yes, there is a part two! In the last article, we broke down some of the biggest costs that are associated with buying you home. Why? Because for many of us (especially us first home buyers), buying a home is scary enough without being blindsided with unexpected bills and expenses. Indeed, at Pest Build Legals, we always recommend that you get the best team of professionals on your team ( i.e property conveyancers, pest and building Inspectors,) to ensure that you get the best outcome when buying you home. It all boils down to ensuring that buying the property of your dreams really is the property of your dreams (and does not become a nightmare, so to speak).
And so as the old saying goes, knowledge is power. So if you have read part one, (if you haven’t - do so now!) here we explore another 3 important hidden costs that you really need to be across before you complete the contract of sale and get that shiny set of keys.
Conveyancing and Legal Fees
When you buy your home, the first main point of contact is the seller’s agent: aka the real estate agent. Real Estate Agents can be incredibly helpful and friendly but always bear in mind that they work for the seller. However, when you make an offer, and if this is accepted, you will be presented with the contract of sale and this is when you must, before taking any further action, engage either a real estate conveyancer or a solicitor. Generally speaking, conveyancers charge a fixed priced (from $1800). This can give you peace of mind as this is a fixed cost, and generally are cheaper than a solicitor that charges hourly. What is the difference? We cover the difference between a Solicitor and Property conveyancer, but in short, a solicitor is better placed to help you with more complex property transactions ( as they have a wider breadth of knowledge of the law ) whereas a conveyancer has specific training in property law. The choice is yours, just make sure that you budget for quality legal representation, as it can be priceless in the long run.
Taking out a mortgage is a big and ongoing commitment, (for both you and the bank!). Mortgage insurance is a payment due when you are acquiring your mortgage. The general rule of thumb is that the more you are borrowing, and the smaller the deposit, the higher the rate of this insurance is.
This is not entirely bad. It can take a long time to acquire a 20% deposit on a $500,000 home aka $100,000! Mortgage insurance allows many people to get a foot on the ladder by allowing them to have a smaller deposit say, 5%, or $25,000. With house prices subject to change, ( normally increasing in price ) it is often better to buy in sooner than later, and this allows many people to do so.
Taking it in your stride.
The best way to look at the indirect costs associated with your home is to include this in your budget from the very beginning. Allow yourself 5% of your total costs to be allocated to these mostly unavoidable costs, and make sure that you ring around to get the best quality service.
At Pest Build Legals, we provide you with free, no-obligation quotes for Legal representation. Instead of ringing around a load of solicitors and conveyancers, just give us your details and we get them to call you!
Simply visit www.pestbuildlegals.com.au today
Click to read part 1 of the insight: The 7 ‘Hidden’ Costs of Buying a Home: Part 1
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