When making the biggest investment of your life, an average of $500,000 in the Newcastle Real Estate market, every dollar counts. In NSW, stamp duty makes up the largest cost when purchasing a property. On a $500,000 purchase, stamp duty adds $17,990 and should it be the wrong decision, it gets even more expensive when you add sales commission as well as stamp duty on the new purchase.
Often referred to as changeover, basically it means the costs to purchase and the costs to sell combined. On a $500,000 purchase, you could be looking at changeover costs of almost $50,000. The question you need to ask is how long would it take to regroup after making a $50,000 mistake?
How can you mitigate the risk of making such a loss? Engage the services of a buyers agent. Why use a buyers agent?
A buyers agent removes the emotion out of the decision making process. Even when purchasing a home, it is easy to get caught up in the moment. The fear of loss can take over and it can mean paying a lot more than a property is worth.
By having a deep understanding of the local area, a buyers agent can guide you away from undesirable locations such as near public housing or areas that may have issues such as flooding.
All this is well and good but are buyers agents just for the wealthy? No, not at all. A buyers agents fees are typically around 2% of the purchase price of the property for a full buyers advocate role where they search, inspect and negotiate. To bid at auction on your behalf can be as little as $1000.
Most buyers agents charge a commencement fee or a retainer. This can be either a fixed fee or a percentage of the total fee and is deducted from the total fee. Most buyers agents will charge the success fee once contracts have exchanged.
So going back to earlier in the article, a mistake of $50,000 on a $500,000 is 10%, when a buyer agent has a fee total of 2% without taking into consideration any savings made during negotiations, it is a wise insurance policy worth considering.
To find out more, get in touch with Newcastle Buyers Agent Principal Tiron Manning.
Article written by Tiron Manning Director of Newcastle Buyers Agent.