If you are planning to buy a house in Perth, you should understand that there are many costs associated with the purchase other than the price of the property.
When you are planning what you can afford and when you are creating a budget for your new home, you should have a full understanding of the fees that you will need to pay. These fees include:
Bank Fees and Home Loan Fees
Many financial institutions will charge you a fee for applying for a home loan and also to set up a home loan. Some of the other fees include the fee to estimate the value of the house, fees to prepare documents, bank cheque fees and service charges due either monthly or yearly.
Typically, these fees would be deducted from the money that you borrow before the funds are made available to you to pay for your new house.
The amount of these fees vary depending on the lender, therefore, it is a good idea to do some research regarding the fees that each lender will charge.
Lenders Mortgage Insurance
If you put down less than 20 per cent of the value of the home down when buying, there are many banks and financial institutions that will charge an on-off insurance fee. The fee is typically between 1 and 3 per cent of your loan amount. This fee is charged so that the lender is covered. If you want to avoid paying this fee, you would need to put down a larger deposit or provide another form of security.
WA Government Fees
• Mortgage Registration: If you are taking out a home loan to finance the purchase of your new home, the bank might register a mortgage against your property to secure the loan. To register for a mortgage, there is often a one-off Landgate registration fee.
• Transfer Duty: This is also known as Stamp Duty. This is a tax and the price of the property determines the amount. The State Government would levy the tax to cover the cost of transferring the title of the property. In Perth and throughout Western Australia, first time home buyers who qualify and are buying a property that is valued at $430,000 or less would not be subject to transfer duty.
To view transfer duty rates in Western Australia and to get more information, you can visit the WA Department of Finance.
• Real Estate Agent: If you are just buying a home, you won’t be required to pay any fees to a real estate agent. However, if you are selling a home to buy a new one and you are getting help from a real estate agent, you will need to pay the agent a commission. This is typically a certain percentage of the sale price. In Perth, the commission for real estate agents is typically between 2 and 2.5 per cent of the cost of the home.
• Conveyancer: A conveyancer is a professional who is legally allowed to transfer the ownership of the property that you are planning to buy. A lawyer or a settlement agency would conduct a title and property search to be sure that the seller is legally allowed to sell the home. If you are looking into buying a strata property, they would ask the strata body corporation questions regarding the levies and insurance.
• Utilities and Services Connections: Before you move to your new property, you are going to need to arrange for the connection of all utilities. Some utilities require a one-time payment. As a Perth buyer, you would need to connect the following:
When it comes to having your water account set up, your conveyancer can help you set up and account with the Water Corporation as part of your settlement process.
• Removalists: Unless you are going to ask friends and family members to help you move to your new home, you are going to need to hire a removal company.
Most removalists in Perth charge by the hour. The price can also vary based on the size of the truck needed and the number of removalists sent to work on the job. It is important to check if you need to pay extra for insurance or other charges, such as a call out fee. Also, many removalists start calculating the time from the time the moving vehicle leaves the depot to when it is returned. The time is not just measured by the time it takes to move your belongings.
Building and Pest Inspections
While building and pest inspections are optional, it is recommended that you have it done. The fee to have the home inspected is much less than it would be if the inspector found a significant building issue or a pest control issue.
Several types of inspections can be performed. The bigger the property and the more things you want to be checked, the more expensive the cost. A settlement agent can give you more information regarding inspections. In the long run, it is worth the investment. If issues are found, you might be able to renegotiate your offer on the house. Most Perth real estate agents will recommend that you also get a termite inspection.