The Surprising Hidden Costs of Looking for a Home
Home hunting remains a passionate pursuit in our country and there are many who keep looking for a year or more before zeroing in on the right property.
What you pay for the property is not necessarily all that you’ll have to spend in the pursuit for a home. There are several surprising hidden costs of looking for a home, too.
You may already have spent $20,000 searching for your property
There is a good chance that if you have been hunting for a property over a year, you would already have incurred an expense of $20,000 or more. Let’s factor in all the probable costs. Even these wouldn’t be all because every property hunter has some unique attribute and apart from the normal expenses, he or she may be inclined to make some peculiar expenses, too.
Surprising hidden costs of looking for a home
Did you ever realise that the petrol you use while home-hunting , or the coffee or the quick bite you grab from the roadside takeaway, are all costs incurred in pursuit of your home? If you are diligently searching for a home for over a year– wait, what does a diligent search mean anyway? It means that you have been paying babysitters, taking unpaid days off work, and so on to hunt property down. So, if this be the case, you must add around $21,000 to your total purchase price, or you will make a mistake when the time for calculating your capital gains comes.
Cost of researching the market
To break down the surprising hidden costs of looking for a home, let us begin with market research. If you have been following comparable sales figures which tell you how much identical properties (within a short radius of your property) have sold for in the last three months, reaching out for property reports and have been carefully looking over suburb profiles, then you may have already spent $1,800.
Road tolls and petrol costs
You have been driving back and forth for your regular property inspection so it may be wise to add petrol costs and road tolls. Reliable researches suggest that if you are looking at three different properties over a month, you are spending about $190 on these factors. Over the course of a year, the amount could add up to $2,280.
Food and beverages (Innocuous expenses? Think again)
Something like coffee–a seemingly innocuous expense–can set you back by $250 a year, and that odd lunch can force you to cough up close to $1,100.
Next in line is the opportunity cost. You may have to take unpaid leave from your work to search for your house. If you take the amount you would have made for a day’s work and add it to what your partner would have made if both of you took a day off each month, we may be looking at a figure of $8,400 annually.
Payments to professionals
Add to this the money spent on seeking professional advice. This can include payments to accountants, property inspectors and financial planners, which can easily run up to $1,700 a year.
Cost of hiring babysitters
It is definitely easier to hunt for homes without kids hanging off your arms, but babysitting fees could cost you $5,400 over a year.
Mobile data expenses
And time for another apparently innocuous cost–mobile data that you eat up month after month scouring for your property. While mobile data plans in Australia are quite competitive, you could still go over the limit, and that could cost you about $250 a year.
The not so hidden costs and the hidden ones
There are many other costs that come with buying a house, like the pest and building inspection fee, the payment made to the conveyancer, solicitor, the council fee, water rate, title registration fee, bank valuation fee, stamp duty, among others. However, these costs are expected and no one thinks of them as hidden costs.
The costs I enumerated earlier, however, can make you poorer by about $21,000 even before you actually buy the property. Ideally, you should factor them into your total purchase price if you want to make a reliable estimate of how much your home has cost you overall.