What potentially unexpected costs should I plan for when selling my home and buying another?
Buying or selling a home is an exciting journey filled with new beginnings. However, it's essential to be aware of the potential hidden costs that might pop up along the way. Here are a few you can prepare for!
LIM Report and Building Inspection
Before you buy, it's crucial to know the ins and outs of your potential new home. A Land Information Memorandum (LIM) report provides vital information about the property, such as zoning details, rates, and any building consents or code compliance certificates. The average cost of a LIM report in New Zealand is around $250-$400.
Coupled with this, a thorough building inspection can uncover any hidden issues. While prices may vary, expect to budget around $500-$700 for a comprehensive inspection. Remember, investing in due diligence now can save you from costly repairs later!
Conveyancing and Legal Fees
Legal expertise is crucial for a smooth transaction, and conveyancing fees cover the legal transfer of property ownership. On average, this can set you back anywhere from $1,000 to $2,000. It's worth shopping around for competitive rates, but remember, quality advice is priceless.
Valuation and Appraisal Costs
Both buyers and sellers often require a property valuation to determine its true market value. While some banks may cover this as part of the mortgage process, expect to pay around $1000 for an independent valuation. Additionally, if you're selling, an appraisal from a registered valuer can provide a realistic asking price, typically costing around $1000 and up. Bear in mind that if it is an urgent request this is an added fee on top of the base rate.
Real Estate Agent Fees
For sellers, this is a significant consideration. Real estate agents typically charge a commission based on the final sale price. The standard rate in New Zealand ranges from 2% to 6% plus GST. Be sure to discuss this in detail with your chosen agent, and remember, a skilled agent can be the key to securing a great deal.
Home Staging and Marketing
Making your property shine can attract potential buyers, but it comes at a cost. Professional staging services can range from $2,000 to $5,000, depending on the size and style of your home. Additionally, marketing expenses such as photography, listings, and advertising should also be factored in, costing approximately $1,000 to $2,000.
Don't forget the practicalities! Whether you're relocating across town or to a new region, moving expenses can quickly add up. This includes hiring a moving company, purchasing packing materials, and potential storage fees. Plan for anywhere between $1,000 to $3,000, depending on the scale of your move.
Knowing what you’re up against is half the battle when it comes to a smooth sale and purchase, and having an expert on your side to guide you is priceless! (Particularly accurate in this scenario - I get paid by the banks, not you!) I’d love to have a chat with you, wherever you are in New Zealand, if you’re thinking about buying or selling. Drop me a line and let’s get you there together!