Mercury (Hobart) - Property
BEWARE HIDDEN COSTS
Costs can quickly take the shine off a great price, whether buying or selling, writes Rebecca DiNuzzo.
IT is not uncommon for buyers and sellers to be surprised by unexpected costs.
And with pressure on to purchase before the market rises further – or sell before the market slows – experts warn it’s important to keep these expenses in mind to avoid budget blowouts.
Here are some of the common costs people forget.
Some loan cost are can be added to the balance of a home loan and were not something buyers needed to worry about upfront, National Property Buyers director Antony Bucello said.
These include lender’s mortgage insurance, which comes into play if a purchaser borrows more than 80 per cent of the property value.
But mortgage registration fees, loan application and establishment fees, and even property evaluation fees, could add to those expenses and cause them to blow out.
Conveyancers and solicitors also needed to be hired to draw up and check contracts before selling or purchasing a home, he said.
Wakelin Property Advisory director Jarrod McCabe said buyers should consider taking an insurance policy before settlement, to make sure their new home was covered.
“Theoretically, the vendor should maintain insurance.
“But a lot of solicitors suggest you take it out, so it is a cost that may come about a little bit earlier than expected,” he said.
Building and pest inspections were necessary, particularly when buying an older property, Mr Mairs said.
It was best to know before signing on the dotted line if a serious structural issue needed repair, and how much it would cost.
Mr McCabe said such inspections could quickly add up – they typically cost $500$800 each – particularly if buyers had to get them for multiple properties. But he said trying to save a few dollars by skipping an inspection was like playing Russian roulette.
“If you do find there’s something wrong by getting that building inspection done, instead of it costing you a few hundred dollars each time you want to bid on a property, it’s saving you hundreds of thousands of dollars if you make the wrong decision,” he said.
If you buy an apartment, unit or townhouse, these will likely apply. They can range from hundreds to thousands of dollars a quarter, depending on the extent of common property in a complex.
This could include driveways, carparks, foyers, gyms, pools and more.
Mr Mair said it was also worth asking if any upgrade works were planned for the complex, as that could cause the fees to be raised.
The cost of stamp duty often catches buyers by surprise – but so can the significant savings on offer in some circumstances.
The fee is calculated based on the value of your purchase, and online calculators can offer an idea of how much you will be stung.
Settlement dates don’t always match up when selling one home and buying another.
Mr Bucello said this may result in having to shell out for rental accommodation.
Buyers also needed to factor in the cost of breaking a lease early if they bought a property but still had time left to serve on their rental contract.
Mr McCabe said older buyers should be aware they might not be eligible for bridging finance, and therefore needed to