What extra costs should I expect when purchasing a home?
Legal fees
When buying a house, a lawyer or conveyancer is necessary to help you understand the legal jargon involved in the transaction. They can check the record of title for the property, which provides information on boundaries, rights, and restrictions. Legal fees can range from $1,500-$3,000, depending on the property type and work required. Lawyers can charge around $250-$300 per property to review auction documents, which can add up if you're considering multiple properties.
Building inspection
To avoid potential issues with a property, it's recommended to hire a qualified building inspector to check it out, even if the seller or agent provides a pre-prepared report. Building inspectors aren't required to be certified in New Zealand, so it's important to choose a trustworthy one. The cost of a building inspection can range from $300 to $1,000 depending on the type of inspection and the property's size. A verbal-only report may be a cheaper option, but a written report usually costs at least $500. A building inspector can also estimate the cost of any necessary repairs or renovations, providing peace of mind and potentially preventing costly surprises.
LIM report
To obtain a Land Information Memorandum (LIM) report for the property, you'll need to contact your local council. The report will summarize the property information held by the council, including rates, consent for work, and any known land issues. The price for the report can range from $300 to $400, depending on the location, and it may take up to 48 hours to obtain it urgently. You can also request to see the council file on your property, but the cost for this varies.
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Property valuation
When buying a home with a deposit of less than 20%, a registered valuation is required by the bank to ensure that the property's purchase price is in line with its actual value. This is to protect both the bank and the homebuyer from potential fluctuations in house prices that could result in the home loan being more than the property's value.
What about when I settle?
After you have made an unconditional offer on a property, it is important to keep in mind additional expenses such as home and contents insurance and rates that you will have to pay once you settle on the property.