5 Hidden Costs That Shock First-Time Homebuyers

Joel RobinsonJul 9, 20193 min read

It’s no secret that buying a home is a huge financial investment. In fact, it’s usually the single, largest financial investment we make. Given the time, effort and expense we invest in such a decision, it seems only logical to be as informed as possible on current housing market trends, mortgage costs and contract terms. But with so much to remember and so many questions to ask, it’s easy to overlook some of the important, yet latent expenses that seem to emerge out of nowhere. Don’t stress though! To put your fears to rest we’ve compiled a list of the top 5 hidden costs that shock first-time homebuyers below…

Image: Smart Asset

1. Hiring a building inspector Just like we test drive a car to check how it drives, a first-time homebuyer should be encouraged to hire an inspector to seek out any issues or hidden expenses with their potential home. Not only is an inspector able to identify potential termite damage or mould, but they also examine the roof, foundation, electrical, plumbing and other features of the home. Engaging the services of a professional provides insurance for the future and allows for the identification of any possible insidious problems not always readily visible to the untrained eye.2. Stamp duty As a first-time homebuyer, it’s critical to understand that the amount of stamp duty you pay varies depending upon the value of the property and the state in which you purchase. The more expensive your home, the more stamp duty you’ll attract. Fortunately, most states offer stamp-duty exemptions and concessions to first time home buyers. Check-in with your lender to assess your eligibility and see if any reductions apply to you.3. Closing costs Closing costs are a broad term to describe the array of expenses associated with closing on a home. Closing costs include fees related to securing the title of the home, loan establishment fees, mortgage insurance, and more. It’s important to be aware that such costs can amount to 2 to 5 per cent of the sales price and vary, depending upon the state you purchase in.

4. Maintenance and repairs While an inspection goes a long way towards preparing you for any possible repairs or works, at the end of the day, it’s only an estimate. Often it’s not until we move into a home that we discover previously unseen problems. For a first-time homebuyer, it's especially important to be prepared for replacements or repairs, whether it be faulty heating, scratched or chipped paint or difficulties with locks. Having a safety fund tucked away for such emergencies or maintenance is one way to minimise any future stress.5. Council and utility rates With the excitement of moving in it can be all too easy to overlook the simple, everyday costs that come hand-in-hand with owning a home. After the purchase of your property, you’ll have to pay the vendor for council or water rates. While the vendor will have paid - normally to the end of the quarter - any rates owing to the council, don’t forget that your portion of that amount will be added to the purchase price!Are you a first-time homebuyer? Speak to one of our consultants on 1800 184 284 Our team of new home advisors can answer any questions or queries you may have about buying your first home and being matched with the perfect builder.

Joel Robinson

Joel Robinson is the Editor in Chief at iBuildNew, where he leads the editorial team and oversees the country's most comprehensive news coverage dedicated to the new home building industry. With more than a decade of experience in residential real estate journalism, Joel brings deep insight into Australia's evolving home building and construction landscape.

5 Hidden Costs That Shock First-Time Homebuyers

Joel Robinson

Editor's Picks

New homes, land & house packages

News