Saving money is hard and slow so you need to not waste a cent. The Victorian Government is however, speeding the process up with a stamp duty concession. You can save 50% in stamp duty – worth up to $27,500 (on a $1 million property) – for new builds and 25% – worth up to $13,750 – when purchasing existing residential properties.
If you are buying in the next six months there are three things that will make those savings stretch even further.
- Research the area
Buying property is clearly a huge investment and you need to consider what affects value. Things like:
- School zoning;
- Future building plans – Visit the local council website;
- Access to amenities and
- What elements make the area desirable -cafes, village vibe, leisure etc.
- Budget for the expenses of buying a home
- Council rates – if the current owner has paid partial council rates for the year you need to pay the outstanding amount;
- Stamp Duty –a stamp duty calculator will determine the fee less 25% till July 1st 2021;
- Lenders Mortgage Insurance – if you’re borrowing more than 80% of the value of the property, you must insure the lender. This is called Lenders Mortgage Insurance (LMI);
- Additional Insurance –many banks will ask you to insure the home before settlement;
- Loan Fees –take into consideration the fees associated with a loan. Add up all fees and determine if the rate is lower because of the hidden fees;
- Conveyancing – They review the purchase contract and complete searches on the property. Ask for a list of standard fees and what additional costs might be;
- Building and pest inspections –consider budgeting for between $500 to $1000, but this can quickly add up the more houses you seriously inspect.
To successfully negotiate you must have something someone wants in the first place. You have the money and they have the house. If the house is in high demand you have less to negotiate with conversely if the market or house has issues you are in the driver’s seat. So, your success comes down to you offering what others won’t or can’t:
- Supply and demand – which end are you on? If you are in a seller’s market then the owner may need something you have.
- Settlement terms – for example, if you’ve already sold your house you can settle quicker or you may be able to accommodate the vendor’s specific needs. You could leaseback as an incentive to a seller who isn’t ready to leave the house due to waiting on the purchase of their next home.
- Negotiating repairs or
- Buying some of the furniture in their house, particularly if its custom made for the space.
The Victorian Government incentives have created urgency for some and being prepared is how to fully maximise the subsidy. Enjoy your search.