Purchasing a property in Perth, while not as expensive as in Sydney, can be costly. It is something that you need to prepare for and think about thoroughly before buying it. You need to plan your finances and consider every expense that might arise along the way. Most first-time homebuyers often overlook one important thing when purchasing a property – settlement agent fees and settlement costs.
When they see a property, first-time homebuyers in Perth think the purchase price is already everything they need to pay for. Settlement costs can come as a big surprise that they have not been able to prepare for. Therefore, understanding settlement costs is important and should be part of every Perth home buying journey.
Settlement costs are the expenses above a property’s contract price that buyers need to pay to complete a real estate transaction. Meanwhile, settlement fees are usually settled at the very end of a real estate transaction when the title of the property is transferred to the buyer. Both the buyer and the seller usually incur settlement costs.
The total amount of a settlement cost ranges from 2% and up of a property’s total contract price although it also varies depending on the costs of different services in your location. Your home loan type and mortgage lender will also affect how much your settlement costs will be. Western Australian government stamp duty on the transfer is quite a big expense.
Licensed settlement agents and can property lawyers that do conveyancing such as Tibby Morgenstern one of the most experienced conveyancers in Sydney Australia.
These include costs for administrative fees, application fees, bank transfer, and everything that is related to the processing of your mortgage loan. Your lender might charge a loan application fee. Ask your lender about the details and the associated fees before applying for a mortgage in Perth.
The valuation fee is paid to a professional home valuing company or the bank that assesses a property’s fair market value to determine your loan-to-value ratio. The appraisal fee is a required expense as your lender would want to make sure that your home appraises for the price you are buying it.
A settlement agent in Perth prepares all the documents for transferring the property from the seller to the buyer. They adjust rates and taxes and inform the appropriate bodies of the new ownership. They work with the lending company and follow the selling contract right through to the final settlement. Make sure you select an experienced professional, licensed company to act for you as your settlement agent.
Your initial deposit is held in a trust account by the selling agent or settlement agent. Until the contract is unconditional, it is paid out at settlement by your settlement agent.
Make sure there is always ample time to meet all the requirements needed for settlement. Late settlements can cost interests that can hurt your budget for buying a property.
All this information seems too overwhelming, especially to first-time buyers or if you are inexperienced in the Real Estate purchasing system in Western Australia. Don’t worry as you can always seek help from experts. If you want to know more about settlement costs, let the experienced buyer’s agents at Buying Perth Real Estate help you understand.