New South Wales is the most populated state in Australia and has the highest average house and unit price across the nation with many suburbs breaking the million dollar mark. With competition high, it can make buying real estate in NSW a daunting task, but with the right planning, it can be achieved without much stress at all.
Before you begin the process of buying NSW property, it is important to understand the different ways that you can actually go about it.
_You have pre-approval of finance from your bank or lending institution
_Your own property sold, or at least assessed for value and possible sale time
_You have a solicitor or conveyancer selected
_Determine how you will be paying the 10% deposit and associated costs
_Have an idea of settlement times, the timeframe between when you sell and move into your new home
A standard residential property transaction is known as a Private Treaty sale. This is when the vendor or homeowner sets the price they would like to sell their property for and their real estate agent negotiates individually with prospective buyers to achieve a sale as close to this price as possible.
An auction is a public sale conducted by a licensed auctioneer and is governed by strict rules. There is a reserve price, which is essentially the minimum the home will sell for - if bids surpass the reserve and you are the highest bidder, you have to sign the contract right there and then.
Buying NSW property by tender is a process wherein you submit a single offer, usually accompanied by a 5 or 10 percent deposit, and it is accepted or rejected by the vendor.
When you buy property off the plan, you are paying for something that hasn't been built yet. The home can end up slightly different from what you were told. However, it does offer you a lower price point than many other properties.
Here is a quick overview of some of the costs you may come across.
We recommend you contact your solicitor or conveyancer for a more in-depth look at charges relating to buying property in NS W.
A deposit is usually 10 to 20 percent of the purchase price.
Purchasing property in NSW also has many hidden costs you need to be aware of. Here is a summary, but a full list can be found at the Office of State Revenue.
_Stamp duty is a tax levied by the NSW Government. It is based on the value of your property and can be significant. For NSW property that costs between $300,001 and $1 million, you will pay $8,990 plus $4.50 for every $100 you pay over $300,000. So on a $650,000 property, stamp duty would end up costing $24,470. On a $1.3 million home, it would be $56,990. go to our useful links to view the stamp duty calculator.
_Legal fees will be between $1,500 and $3,000 depending on the complexity of your contracts.
_Pests and Building Inspections will be between $300 and $800, based on the complexity of the inspection
_Loan application fees can range from nothing to $1,000 - sometimes this is waived by the lender.
_Independent valuers fees - you will require an independent valuer to value the property you are planning on buying. This is generally $300 to $500.
_Lenders Mortgage Insurance - if borrowing more than 80 per cent of the property's purchase price, you'll need LMI. This is a one off premium to cover the lender should you default on the loan. This varies but allow for around $10,000.
_Registration of title - you are required to register the title with the NSW state government for $75.
_Strata - you can expect to pay around $200 for a strata report.
_Council Rates and Strata Fees - these commence from settlement. Allow for an extra $500 to $800.
After buying the property either via private treaty or auction, signed sales contracts are exchanged between the vendor and the buyer. Private treaty sales often have a 5 day cooling off period for the buyer, however there is no cooling off period for properties bought at auction or for the sellers of the property. It is recommended you consult a solicitor or conveyancer during this process.
Settlement is the conclusion of the sale transaction, and usually takes place about 6 weeks after the contracts are exchanged.