Aside from the purchase price of the home you want, there are a few more costs you may not have calculated on. It’s best to go into this house hunting journey with your eyes open, knowing what’s involved.
Some common costs involved are;
Building Inspection & LIM Report
Once you find a house you want to put an offer on, you’ll want to hire a builder to give it a building inspection. You can either get a building inspection done and then put an offer in knowing whether the house has an defects, outstanding Code of Compliance approvals, resource consent issues or pest issues. Your offer will reflect the costs of work required to fix those issues and you may able able to get the house cheaper depending on the circumstances of the seller and the demand for the property.
Or you can put a conditional offer in with the condition of the building inspection outcome (and a finance claus). This inspection costs around $500 but is a great way to give you piece of mind about issues that can’t be seen without a trained eye, and could save you thousands in the long run.
While a LIM (Land Information Memorandum) is a summary of information that is held at your local council on the property, which you can pay a fee to receive. It will give you information on;
- Potential erosion, subsidence or slippage, flooding of any type and possible presence of hazardous substances.
- Details of current rates, and outstanding rates, if any, owed on the property.
- Information on any protected or heritage buildings or trees on the property.
- Details of resource consents, or building consents issued for work on the property.
- Private and public stormwater and sewerage drains.
- Special conditions including NZ Historic Places Trust listings.
- Any information which has been notified to the council by any statutory organisation in terms of any other act.
- Network utility in relation to the Building Act 1991 or 2004.
These are both important in giving you an understanding of the building and it’s land you are about to purchase. They can be very useful if there are maintenance issues, then you can bring these up with the vendor and negotiate terms on who will complete the works required.
Home Loan Costs
Your chosen lender may charge you an upfront ‘loan application fee’ and if your deposit is less than 20% you may be charged a ‘low equity margin fee’. Some banks/lenders will charge this fee upfront while others may add it onto the regular interest rate.
If purchasing directly from the home owner without involving a real estate agent your bank/lender will ask you to get a formal valuation assessment done. The same goes for if you’re purchasing with less then a 20% deposit. This valuation assessment costs around $500-$600. This has the added benefit of having peace of mind that your offer is either at market rates or that you will gain instant equity by getting the house for less than the current market worth.
You’ll need to select a lawyer (solicitor) to go over your home loan agreement, purchase agreement and insurance paperwork as well as other legal documents to do with your application. It pays to shop around and having a lawyer with a set fee can be a great way to go.
Once you have the keys to your new home there's the moving in costs, be it hiring a moving company or a van/truck to do it yourself. Plus getting utilities connected and turned on; gas, electricity, telephone line, internet and water. This utilities can at times take a few days to be turned on, so it's best to have this organised and ready to be turned on before you move in or on the day.
As a requirement of receiving your Home Loan you’ll have organised House Insurance but may have also opted for contents insurance. By getting these two insurances from the same company you may be entitled to a reduction in the overall cost. Happy house hunting!
No one understands the true costs of buying a home more than us. Choose First Steps to finance your home purchase and we’ll ensure you don’t run into any unexpected costs.