Agent fees: seller
The commission real estate agents charge to sell your home varies between states as well as between areas, according to openagent.com.au, which estimates the lowest at about 1.6% and the highest around 4%. The average across the country seems to be around 2-2.5% of the home, meaning on the sale of a $1 million property, the agent’s fee will be $20,000 to $25,000. And while some agents include advertising and marketing costs in their commission, others don’t, so be sure to check.
uno’s Home Loan Report provides a suburb snapshot and property value estimate for your home. It looks at comparable sales in your area and makes suggestions on the loans most suited to your situation. It’s all available in one, easy to read report.
Agent fees: buyer
For home buyers, if you decide to enlist the services of a buyer’s agent when looking for a property, expect to pay up to $15,000 for their services. The amount they charge will differ depending on the area you’re buying in, and whether they charge a commission or a flat fee. Some buyer’s agents will charge a commission of 1-2% of the purchase price; others charge a fee of a few thousand dollars upfront and a larger sum once they’ve found and secured a suitable property for you.
Stamp duty: buyer
Stamp duty, or ‘bloody stamp duty’ as it tends to be called, is a tax on written documents and certain transactions imposed by state and territory governments. It doesn’t matter if you’re buying a home to live in or an investment property: you’re going to have to pay stamp duty on top of the property sale price. It can vary depending on the state or territory: In Sydney it can be around $50,000-$80,000 depending on what you buy. Most state revenue websites have a stamp duty calculator that calculates the rates home buyers will have to pay. uno’s stamp duty calculator also enables users in any state to work out stamp duty by entering a number of variables.
Have a go and read our comprehensive guide to stamp duty here, including information about stamp duty concessions for first home buyers.
As an example, the current rates and thresholds for stamp duty in NSW are outlined in the table below:
NB: Along with the fee itself, there are additional costs involved with paying stamp duty. You’ll have to pay a transfer fee and a mortgage registration fee. The transfer fee is usually around $200-$300 and the mortgage registration fee around $100-$150. These differ between states and territories as well.
|Property Value||Rate of Duty|
|$0 - $14,000||$1.25 for every $100 or part of the value|
|$14,001 – $30,000||$175 plus $1.50 for every $100 over $14,000|
|$30,001 – $80,000||$415 plus $1.75 for every $100 over $30,000|
|$80,001 – $300,000||$1,290 plus $3.50 for every $100 over $80,000|
|$300,001 – $1M||$8,990 plus $4.50 for every $100 over $300,000|
|Over $1M||$40,490 plus $5.50 for every $100 over $1,000,000|
|Over $3M (Premium Property Duty)||$150,490 plus $7.00 for every $100 that the value exceeds $3,000,000|
Conveyance and legal costs: buyer and seller
The legal work involved in preparing the contract of sale for a property (if you’re selling), reading it thoroughly and making any changes (if you’re buying) to home loan documents and other related docs, is called conveyancing. Information about conveyancing can usually be found on the office of fair trading website in your state or territory but generally speaking it will include processes such as examining the contract for sale; arranging building and pest inspections; and examining a strata inspection report (if the property is in a strata scheme).
Joseph Rose, a principal at Rose Lawyers in Melbourne, has kindly answered some questions for us on the conveyancing process:
What does a conveyancer do?
“A conveyancer’s work is to act for purchasers or sellers of real estate property. They can act in other issues involving the Titles Office such as subdivision of land, creations of easement, transfer of a property as a result of a Probate, and the list goes on.”
When do you need one?
“A conveyancer can be used in any transaction involving real estate.”
How critical is a good conveyancer when it comes to purchasing property?
“A good conveyancer should always be able to resolve property issues. In this office I work together with the conveyancing department in the more difficult or complex matters. A recent issue that came through the office involved a situation where one of the bank’s used by the vendor (seller) went into receivership. This meant that the transaction could only be completed by a liquidator who was then in possession of the property. This problem caused alarm bells to ring for the purchaser. It took time for the liquidator to cooperate to complete the sale to the purchaser and skill by my office to negotiate the hurdles that the problem created and hurdles with the seller’s other bank.”
How much does a conveyancer cost?
“Costs are a matter for each individual conveyancing firm. They are becoming inflated because of the complex demands now being made by the Australian Tax Office which require extra negotiation, communication with the vendor’s accountant and more paperwork than was necessary, say, 12 months ago. My fee is $1,250 plus GST and disbursements.”
Does the role of a conveyancer vary from state to state?
“The process is slightly different in each state but the role of the conveyancer remains similar. It is rare for a conveyancer in one state to try to handle a transaction in another state. This may change with time as the dependence on physical presence diminishes with the advent of electronic conveyancing.”
Anything else about conveyancing we should know?
“My own personal comment is that there are people who think that conveyancing is a simple clerical task. Those people are fooling themselves. Conveyancing is difficult and complex when done competently.”
Application fees are charged by lenders for processing home loan applications. The fee is paid by the customer. Not all lenders will charge a fee. Your uno Home Loans consultant will keep you informed about such fees.
Pest and building inspection costs: buyer
If you’re serious about making an offer on a property or bidding on it at auction, you’ll need to pay for what’s known in the biz as a “P&B”. Unfortunately it’s not a peanut butter sandwich, but a pest and building inspection. And yes, there are costs involved. P&Bs tend to cost around $250, although sometimes they’re $300 or even $400. Sometimes the vendor or selling agents will pay for one to be done, and interested buyers pay for access to the report, which is available for a slightly reduced fee. At least this is one fee you might be able to plonk on your credit card.
Mortgage broker fees: buyer
If you’re reading this, hopefully you’re considering a home loan via uno, which doesn’t charge a fee for service.
If you choose to use a traditional broker, he or she might charge you an upfront fee for providing you advice and assistance. On top of that, they’ll usually receive commission from the lender, which is a percentage based on the size of the loan and the loan to value ratio (LVR). These payments usually amount to between 0.65% and 0.7% of the loan amount, plus GST, as upfront commission; and between 0.165% and 0.275% of the remaining loan amount, plus GST, per year as trail commission.
The percentage your broker receives also depends on whether they go through an aggregator or not. If they go through an aggregator it will be dependent on the aggregator’s agreement with the lender and furthermore, the broker’s agreement with the aggregator.
uno’s advisers don’t receive commission. They are paid salaries, so they don’t favour one lender over another. Customers can be assured that our advisers will find the best lender for them based on their individual circumstances. uno can also negotiate with the lender on your behalf to get your best deal.
Read more in our article, Explaining mortgage broker fees.
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uno is an online mortgage broker. The information above is general in nature, and you should always seek professional advice when making financial decisions.
*WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. The comparison rate is calculated on the basis of a loan of $150,000 over a term of 25 years.
** Comparing the mean interest rate of 4.27% among mortgage customers who compare their rate every six months with the mean rate of 4.58% among those who never compare using a $500,000 principal and interest loan over a 30-year period.