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The Costs of Buying Real Estate

There are a number of costs you may incur during the purchase of a property. Some of the main ones may include:

1. Price of the Property
2. Stamp Duty
3. Legal Costs and Searches
4. Valuation Report
5. Pest and Building Inspection Reports
6. Termination of Contract & the cooling-off provision
7. Miscellaneous Costs
8. Deposit


Price of the Property

A written offer may be placed on a property and presented to the seller. The seller may either reject or accept your offer or may place a counter offer. This must be countersigned by both parties on the contract of sale, which is then legally binding, subject to conditions on the contract. Gazumping cannot occur after the contract is signed by both parties.

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Stamp Duty

Stamp duty is a tax imposed on written documents that record or affect certain types of financial or legal transactions.
The State Government charges the buyer stamp duty when they purchase property - the percentage scale will vary according to the amount of the sale price. Depending on the nature of the transaction, certain concessions and exemptions are available.

Your solicitor will obtain the appropriate rate. The buyer pays the solicitor the amount payable who then arranges payment to the Government authority.

Stamp Duty Calculator
For more information on calculating stamp duty click here.
The calculator provided can help you to determine how much Stamp Duty is applicable to your transaction. For more information about Stamp Duty, go the State Government's website at www.osr.qld.gov.au or phone 07 3227 8733 or
1300 301 342.

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Legal Costs and Searches

The way property is bought and sold in Queensland has recently been changed with the introduction of the Queensland State Government's new Property Agents and Motor Dealers Amendment Act 2001.
Issues that need to be understood by the buyer are: the appropriateness of accepting or waiving the 5-business day cooling off period, seeking assistance with understanding the new State Government forms, the Selling Agent's Disclosure to the Buyer Statement (Form 27c) and the REIQ Contract of Sale.
After a buyer has signed the appropriate forms and the Contract of Sale has been accepted and signed by the seller, the buyers conveyancing solicitor will undertake certain searches - these include a Title search verifying the ownership of the property, also any encumbrances on the property (easements), a local government search on the zoning of the property indicating any restrictions on the property.

Solicitor's fees may vary. I can provide details of a local solicitor if required or contact the Queensland Law Society for further details about how to contact a solicitor: www.qls.com.au See our Trades list for a local solicitor.

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Valuation Report

The buyer’s financier may obtain an independent valuation of the property. A buyer can also obtain this at his own cost prior to signing a contract. See our Trades list for a registered valuer.

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Pest and Building Inspection Reports

Buyers can make their Contract of Sale conditional on the basis of a satisfactory building and pest inspection report from a licensed professional (see the Building Services Authority website www.bsa.qld.gov.au for more information).
The cost of these can vary but it is now required under Queensland law that the Inspector must be licensed by the Building Services Authority. The Building Services Authority (www.bsa.qld.gov.au) – Information on building regulations, licensed builders etc.
Visit our Trades List for building and pest inspectors.

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Termination of a Contract under the 5-business day cooling-off provision

If a buyer terminates a Contract of Sale at any time during the stipulated 5-business day period, they will have to pay the seller 0.25% of the property price on the Contract. There is no additional GST payable on this amount.

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Miscellaneous Costs

* Financial considerations you may also wish to pursue include Lender's Mortgage Insurance. For further information on these contact your financial adviser. See our Trades list for a local mortgage expert.

*There are some incidental costs that the buyer may incur. These could include loan establishment or transfer fees from your financial institution.
* A pro-rata adjustment of rates may apply between the buyer and the seller.


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Deposit

The amount of the deposit is detailed on the contract when signed. It is often 5%-10% of the purchase price and may be paid in two parts -:
1. A portion when the contract is signed.
2. The balance sometime later, eg. When the finance is approved. The deposit remains in the Real Estate Agent's Trust Account until settlement.

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