When buying a house, there are more expenses to save up for than just the deposit. Many first-time homebuyers often end up surprised at how much more it costs to buy a property than it seems because they did not get to prepare for these hidden costs.
Hidden costs homebuyers pay can definitely take a swipe at your bank account if you don’t watch out for them. Expenses like stamp duty, transfer, and conveyancing costs, insurance, building and termite inspection, and other fees can be costly. While some of these fees can be prepared for, other fees are upfront and cannot be refunded even if your property purchase does not push through.
1. Pest and Building Inspection
Checking your home for pests and for any hidden structural damages is essential when buying a property, especially for older homes. While hiring a professional home inspector can cost you around $300-$600, this is definitely money well spent because it gives you an assurance of the quality of the property you bought.
2. Stamp Duty and Other Government Fees
Stamp duty is the tax you pay when you purchase a home. Depending on the value of your property, stamp duty can cost thousands of dollars. For example, stamp duty on a home purchase of $650,000 is $24,890 if it’s for your home and a little more if it’s an investment. Stamp duty is paid at settlement.
However, some states like Western Australia waive the stamp duty for first-time homebuyers. You’ll only need to pay other government charges such as mortgage registration and transfer fees which can definitely help you save a lot of money.
3. Conveyancing Costs
Having enough money for a down payment is not enough when purchasing a home. You also need to prepare for the settlement costs. Conveyancing costs include various costs that are necessary when settling a property deal. Some of these are as follows: document fees, title cost, mortgage application, etc.
Ask your buyer’s agent about these fees and make sure that everything is understood so you know how much you need to save up and to save you from unpleasant surprises.
4. Home Maintenance and Repair
Although your new home passed the pest and building inspection, you still need to prepare in case there are any repairs needed. Once you move in, there can still be things in the house that needs to be removed or replaced such as door locks and old or faulty fixtures. You might change a few things on the property such as adding a fresh coat of paint, installing a new water heater, changing the garden landscaping, etc.
Yearly maintenance fees can be a cost that many don’t prepare for so it’s best to save up that amount in case any unexpected repair costs come up.
5. Homeowner’s Insurance
Buying a home is an investment. Since you will be spending a big amount of money on this, it is necessary to protect your investment. You can do this by getting homeowner’s insurance. This is especially important if the location of your new home is prone to natural disasters. Getting a homeowner’s insurance might seem like an additional cost when buying a home but you will find it absolutely essential in case something happens to your home.
6. Moving Costs
Your expenses when buying a home don’t end with the actual fees that you need to pay upon purchasing a home. Finally settling the deal is an accomplishment after the long buying journey but the journey doesn’t end there. You still need to take care of moving into your new home and this entails additional expenses.
You’ll need to rent a moving van plus purchase necessary moving tools such as boxes and packing supplies. Include this in your home buying costs so you’ll be able to manage your finances accordingly.
It’s best to be prepared for these hidden costs homebuyers pay for when buying a property. Make sure that you include these fees when deciding to buy a house and saving up money for a deposit. Prepare early so that you can avoid straining your finances.
When buying a home, don’t hesitate to ask your buyer’s agents about these fees. Get a free consultation with Clive and the experts at Buying Perth Real Estate. Our experienced buyer’s agents will make sure that these costs won’t be hidden from you as we guide you through your home buying journey. Send an email to firstname.lastname@example.org or call us at 08 6215 0200.