Settlement cost, what’s involved?
Buying a house can be an exciting and daunting experience. One of the essential things to consider when buying a house is the cost involved in settling a house purchase. In this blog, I will discuss various associated with buying a house.
Deposit: The first cost involved in buying a house in New Zealand is the deposit. Typically, you will need to provide a deposit that is usually 10% of the purchase price. If you're a first-time buyer, you may be able to use the KiwiSaver scheme to help with your deposit.
Legal fees: You will need to hire a lawyer or a conveyancer to handle the legal aspects of your property purchase. Legal fees can vary depending on the complexity of the transaction [how many borrowers, how many Kiwisavers, etc], and the lawyer you choose. The average cost is around $2,000 to $2,500.
LIM report: You can choose to obtain a Land Information Memorandum (LIM) report before you buy a property. This report provides important information about the property, including any building consents, permits, or restrictions. The cost of a LIM report varies, but it can be up to $400.
Building inspection: It is always recommended to get a building inspection done before buying a property. A building inspection can identify any potential problems with the property that may not be immediately apparent. The cost of a building inspection varies but can range from $500 to $1,000.
(Registered) Valuation fees: You may need to obtain a property valuation to determine the property's market value. In some cases the bank will require you to do a registered valuation as a condition to provide the mortgage. Valuation fees can vary but can be up to $1,000.
Mortgage registration fee: If you are taking out a mortgage, you will need to pay a mortgage registration fee to the Land Registry. The fee is usually around $150.
Insurance: You will need to obtain insurance for your property before settlement. The cost of insurance varies depending on the level of coverage you choose.
Moving costs: Finally, you will need to consider the cost of moving. The cost of moving can vary depending on the distance you are moving and the amount of belongings you have.
In conclusion, settling a house purchase involves various costs that you need to consider before making your purchase. It is always recommended to do your research and seek professional advice before making a purchase. By being aware of all the costs involved, you can budget accordingly and make a well-informed decision about your property purchase.
