Deposit Isn’t the Only Thing to Think

Your Deposit Isn’t the Only Thing to Think About

A lot of people get confused when we talk about deposits, stamp duty, and cash required estimates.

Even people who’ve bought multiple properties before may not fully understand this side of things.

What we want to do is demystify that process a little bit so you know what you’re getting into…

Let’s assume you’re buying a $300,000 property.

To do that, you’ve saved up $30,000, which should cover a 10% deposit. And you’ll get a $270,000 loan to cover the rest of the purchase.

So far so good…

But when you look at your spreadsheet, you notice your total cash required is higher than that.

This generally comes down to some fees you’ll have to deal with during the exchange period.

It’s during this period that you’ll get the contracts sorted and deal with the finer details of the deal. 

From there, you go into the settlement, which can take anywhere from 15 to 90 days depending on the deal.

But let’s come back to the exchange period... 

...There are a few fees beyond the deposit that you may have to deal with here.

✔️ The first is a cash deposit that you may have to pay at the exchange point... 

...That might range from 0.25% to 5%, depending on the state you’re buying in.

✔️ There are also buyer’s agent’s fees to consider...

...Again, they’re going to vary depending on the agent.

✔️ You may also have to pay an initial conveyancing fee to get them to start work....

✔️ Beyond that, you may need to add in valuation fees and loan application fees....

✔️ Then there’s stamp duty... 

...Again, this varies depending on the state. 

For our $300,000 property, you’d pay $8,925 in Queensland. That goes up to $13,070 in Victoria and each state will have its own variation on the fee.

The key point here is that you have to think about more than the deposit when buying property. 

A mortgage broker can help you to untangle some of these extra fees, which is why we always recommend using one.

For our part, we can help you to find a high-performance property.

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