Costs of Buying a House in NSW

1. Conveyancing & legal fees
2. Pest & building inspections
3. Stamp duty
4. Lenders mortgage insurance
5. Mortgage application fees
6. Mortgage registration fees
7. Moving costs
8. Home & contents insurance

It can be easy to get caught up in the excitement of buying a property, especially if you’re a first home buyer. But many buyers are unaware of all the costs of buying a house – which can add up quickly. While saving for a deposit is one of the biggest costs involved, you also need to know about other fees such as stamp duty, pest and building inspections, transfer fees and conveyancing costs.

To help you, we’ve put together this guide on both the upfront and hidden costs of buying a house. And if you have any questions, please don’t hesitate to get in touch with our experienced team of conveyancers.

The upfront (and hidden) costs of buying a house

1. Conveyancing & legal fees

This is the cost of the service by the conveyancer or property lawyer that is handling the legalities of the purchase of your home. These services can include:

• Reviewing your contract of sale (including special conditions of sale)
• Filing all the necessary paperwork
• Performing title searches
• Checking for caveats on the property

Legal and conveyancing fees can vary depending on whether you need both a lawyer and a conveyancer, and the amount of work required for them to properly assist you.

2. Pest & building inspections

Pest and building inspections usually occur during the cooling off period. These inspections are imperative for the protection of the buyer. A building inspection allows for an outside inspector, chosen by the buyer, to visit the home and inspect the structure, plumbing, electrical and all other aspects of the home. If the inspector finds a material defect in the home, the buyer can either pull out of the contract or possibly negotiate with the seller.

A pest inspection, on the other hand, looks out for issues such as termites or other small animals and/or rodents that might be nesting in the home. If any such defects are found, the homeowner may be required to cure the defect before the contract can be enforced. The terms of these conditions will be contained in your original contract for sale.

As the buyer, you are responsible for paying for the building and pest inspection. While prices vary depending on the size of the property, you can expect to pay upwards of $500.

Learn more: cooling off rights

3. Stamp duty

Stamp duty, also known as a transfer of land duty, is a tax that you have to pay when you buy a property. Each state in Australia has a different way of calculating stamp duty. In NSW, you can use the Revenue NSW calculator to see how much you’ll need to pay.

The NSW Government offers the ‘First Home Buyers Assistance scheme’ which is a stamp duty exemption scheme for individuals purchasing their own house. There are a few eligibility requirements to access this scheme, which we recommend discussing with your solicitor.

4. Lenders mortgage insurance

If your deposit is less than 20% of the purchase price, you will encounter additional fees for borrowing the balance of the purchase price. This is called Lenders Mortgage Insurance (LMI). The amount of LMI you have to pay can depend on your Loan to Value Ratio (LVR) and the amount of money you borrow.

Lenders and insurers can have different rates for calculating LMI, so it’s best to speak to your lender or mortgage broker about getting an estimate.

5. Mortgage application fees

Another cost of buying a house is the fee for processing your application. The fee will be dependent upon the charges of your particular mortgage company. Mortgage application fees can run around $600.00 – however, you can ask your lender for any packages and/or discounts they might be offering on this fee.

6. Mortgage registration fees

This fee is for the registration of your mortgage (deed of trust) and could cost between $150.00 – $300.00.

7. Moving costs

This cost of buying a house can often be forgotten about, but it’s important to keep in the back of your mind. Moving costs will vary depending upon whether you are doing the move yourself or if you are hiring professional movers. If the move is being done by a professional moving company, it is important to have at least three companies visit your home and give you an estimate for the cost of the move.

8. Home & contents insurance

We always recommend getting home and contents insurance as soon as you settle on the property. This insurance will cover you in the event of loss or damage to the home. Costs vary depending on the insurer as well as the type of property, its location, your policy cover and more.

Owen Hodge is here to help

The process of buying a house should be fun and exciting, but you also need to ensure you’re being diligent about all the costs involved in buying a house. So, long before you sign across the dotted line, make sure you’ve spoken to a professional and/or used budget calculators for your mortgage payments, taxes and fees.

In the event that you find yourself in need of assistance, please contact the law offices of Owen Hodge Lawyers. At Owen Hodge, we are always happy to assist clients in understanding the full ramifications of any and all of your legal needs. Please feel free to call us at your earliest convenience to schedule a consultation at 1800 780 770.