Breaking Down All The Costs Of Buying A Home in Australia

In this video I'm going to give you a run down of the hidden fees when buying a home so you know what you're in for.
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Buyer's agent fees
If you plan on getting help with finding a property from a buyer's agent, you'll need to account for their fees - and they're not cheap.
Buyer's agent fees can vary depending on the agent, but you're looking at paying an engagement fee in advance, or a percentage of the purchase price of the property you buy.
These fees can range from $10,000 to $20,000 or more depending on which agent you use and the purchase price of the property. The good news is that this is a one-off fee.
Building & Pest reports
Building & Pest reports look at the structural soundness of the building and check for pests to make sure you’re not buying a home riddled with termites or white ants.
They are technically optional - in many cases, real estate agents will supply you with a building & pest report that they have obtained for the sale process.
But I think it's essential that you get your own building and pest report. There is a clear an obvious conflict of interest if you use the building and pest report given by the real estate agent.
You need to get your own report from an independent, certified building and pest inspector to make sure that you don't get lumped with a lemon of a property.
A typical building inspection for a 4-bedroom home can cost $400-500 and pest inspection $200-300. You can save a few hundred dollars by getting a combined building and pest report for around $500-600.
But they are worth every penny - and then some. I can say that building & pest reports have saved me over 5 times from buying complete dumps of properties.
One of the properties had concrete cancer, another had issues with flooding and water leaking through the walls, another had termites in a tree in the backyard, and another had evidence of old damage in the roof.
Any of these issues would have cost me thousands of dollars to fix. And I would have missed them completely if I didn't get a building and pest report done.
As another benefit - this is one of the few hidden costs of buying that can actually pay for itself. If your inspector finds a few small, easily fixable issues in the report, you can proceed with the purchase and use these to negotiate some discounts from the vendor.
You will need to pay for a building and pest report for each property that you are considering buying.
Legal Costs (solicitor / conveyancer fees)
You will need to pay a legal professional or conveyancer to help you with the process of buying a property.
They will conduct title searches and strata reports on your behalf, help you to review the contract of sale, and arrange settlement details.
If you’re buying at auction, you’ll need to engage a solicitor or conveyancer before you bid. If purchasing by private treaty - by submitting an offer rather than going to auction - you can engage a solicitor or conveyancer during the cooling off period.
In general, conveyancers charge a flat fee. Solicitors commonly charge by the hour, with the amount paid depending on how complex your purchase is.
The approximate cost is $1,000 to $2,000 depending on the searches conducted. Your solicitor or conveyancer will tell you which searches you need to conduct.
We recommend avoiding one-person operations. Your solicitor or conveyancer will need to attend settlement for you - if they are on holidays or sick then it could cause some issues at settlement time.
DISCLAIMER:
This video offers no Legal, Financial and Taxation advice, and the information contained is general and does not take into account your personal situation. The Listener acknowledges, consents and agrees to the viewing of the content presented on the Channel is subject to the full Disclaimer (below) and agrees to be unconditionally bound by this Disclaimer.
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[@MortgageBrokerAustralia]

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[@billysummerhayes6434]

Super helpful info fellas. Really helping me out heaps

[@MortgageBrokerAustralia]

Our pleasure!

[@joannarivera2275]

You guys are helping a lot of us with very informative videos ❤️ thank you❤️

[@MortgageBrokerAustralia]

Our pleasure!

[@chriswerps5041]

Another very informative video , thanks guys !

[@MortgageBrokerAustralia]

Our pleasure!

[@rafakao9577]

Thanks a lot for all the great content 👌👌👌

[@MortgageBrokerAustralia]

You're most welcome Rafa!

[@timfudy3147]

Thanks guys, this stuff really helps us.

[@MortgageBrokerAustralia]

Our pleasure!

[@jessicachan1782]

Great video ☺️

[@MortgageBrokerAustralia]

Thank you!! 😊

[@8sanidhya]

Your videos are very helpful. Thanks so much for sharing such good content. Wondering if you could answer this question. Among couples if it's just one of them who's willing to purchase and pay up the loan amount for the property. How will the Bank view their document ? Should that specific person apply for the loan individually? Is there chance of the loan getting disapproved?

[@MortgageBrokerAustralia]

Thanks Sanidhya, great question. Definitely can apply for the loan individually. The bank will complete the assessment based on the overall position and would be best to chat with a broker who can crunch the numbers prior to applying to make sure it all stacks up. Feel free to touch base with us www.huntergalloway.com.au/contact/ and would be happy to chat further.

[@8sanidhya]

@@MortgageBrokerAustralia thank you

[@Freestyle80]

for Apartments do you need to do a building and pest report too? Because afaik by law they have to state all the building defects and potential issues in the strata report what additional benefit do you get with a B&I other than maybe peace of mind?

[@MortgageBrokerAustralia]

Yes, it's a good idea to conduct a building and pest inspection for apartments as well, as it provides a detailed individual assessment of the unit, beyond the general information found in a strata report. This ensures you have a comprehensive understanding of the property's condition.

[@anu7320]

Please make videos for Sydney home buyers please

[@MortgageBrokerAustralia]

Thanks Anu, will do.

[@elizabethpalu2447]

Can you guys also add if it's an investment property whether these fees and charges are tax deductible?

[@MortgageBrokerAustralia]

Thanks Liz, great question and this would be one best answered by your accountant.

[@shanesmith3677]

Question please, is there a rort happening in Brisbane at the moment between shyster realestate agents and their equally dodgy "buyers agent" cohorts? Ive been trying to buy a property for months now and I cant even find a single property that isn't already under contract. buyers agent pfft what a joke do realestate agent actually do anything for their insane fees?

[@MortgageBrokerAustralia]

Thanks for watching Shane, certainly is a challenging market at the moment and super frustrating to see property after property getting snapped up so quickly.

[@shanesmith3677]

@@MortgageBrokerAustralia so that would imply a yes then, buyers agents are a scam. And they do work together with unscrupulous agents to fatten their Gucci wallets. Playing a rigged game

[@MortgageBrokerAustralia]

Thanks Shane, I believe buyers agents can certainly add value to the process. For example, if they are able to get you an off market deal that doesn't have multiple buyers bidding for the same property. The fee you pay them, could be saved by not having the price increased through a bidding war. Having said that, it's always wise to do your diligence on any member of your team that will be helping you through the process (solicitor, mortgage broker, building and pest, buyers agent) and make sure they are fit for you.

[@winston_bishop]

Generally speaking, what cut of the pie does the mortgage broker receive?

[@MortgageBrokerAustralia]

Thanks Winston, In most cases, mortgage brokers are paid an upfront commission and a trail or ongoing commission for the business they bring to the bank. These commissions are paid out only once your home loan settles. The commissions themselves are based on a percentage of the loan amount utilised. Although the details around when and how brokers receive commission varies from lender to lender, generally speaking: Upfront commission: 0.65% to 0.7% Trail commission: 0.165% to 0.275%

[@saynotocapitalism]

FHBC scheme is only helping the wealthy. If someone afford over a mil property then they don't need any assistance. Labor's first home buyer scheme is a fair scheme which would support struggling first Home buyers by exemption and discounting of stamp duties. This policy will drive down the prices to fit into the exemption brackets as well. Current Sydney Price hikes is also driven by FHBC.

[@MortgageBrokerAustralia]

Hi pawanchaudhary. That's a good point and the FHBC in NSW ends on the 30th of June 2023. The home guarantee scheme (previously called the first home buyer scheme) allows people to borrow up to 95% of the purchase price of a property without having to pay lenders mortgage insurance (LMI). This means that people with smaller deposits can afford to buy more expensive properties. However, this also means that the scheme is driving up house prices, as people are able to bid more for properties. The home guarantee scheme is a fairer scheme, as it provides assistance to all first home buyers, with an income cap and property cap. NSW has also change the stamp duty to exempt first home buyers from paying stamp duty on properties up to $850,000 in value from the 1st of July.

[@sallymafohla8466]

Brr...so many costs to navigate your way through....

[@MortgageBrokerAustralia]

I know right, hopefully this helped!

[@okeandme]

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[@MortgageBrokerAustralia]

Thanks for watching Pazzello!