Save yourself over $100,000 by building an addition vs. buying a new property

Often a difficult choice for families looking to increase their living space is whether to purchase a new home or build an addition on their current home. The costs associated with both decisions can vary but there are many hidden and overlooked costs related to purchasing a home which are not applicable when building an addition. We have outlined costs below for you to keep in mind if this is a decision that you are currently looking to make;

Costs related to purchasing a home

Loan fees – This is the fee charged by a bank or other lending institution when you apply for or take out a loan. Approximate cost: $Nil – $800 There may be additional costs preparing and registering a mortgage.

Mortgage discharge fee – If you have a mortgage, you can expect to close your mortgage loan for approximately $1,000, but this cost can vary depending on your bank. This is essentially a fee for the paperwork involved. Approximate cost: $1,000-$2,500

Conveyancing fee – A conveyancer is required for the process of transferring the property from the seller to the buyer. Approximate cost: $700-$2,500

Disbursements – Your solicitor/conveyancer will charge for some of these expenses paid on your behalf during the conveyancing process. Approximate cost: $100-$350

Stamp duty – You must pay contract stamp duty on the purchase price of the property. Approximate cost based on a house valued at $1.1 million: $45,990

Inspection fees -Building Inspection – A building inspection checks structural soundness and lists any visible defects and necessary repairs. Approximate cost: $300-$700 & Pest Inspection – A pest inspection checks for any signs of past or present pest infestation. Approximate cost: $250 – $300

Real estate agent commission – The cost of selling will depend on the amount of commission charged by your real estate agent. The national average commission rate in Australia sits at around 2 per cent, but commission rates vary from agent to agent. Approximate cost based on a house valued at $1.1 million: $22,000

Auctioneer fees – If you’re holding an auction, you’ll often have to pay an auctioneer’s fee. Approximate cost: $6,000

Moving costs – The cost of moving generally depends on the distance you’re travelling, the amount of furniture you’re moving and whether you’ll hire a full-service removalist or pack the truck yourself. You’ll also need to purchase storage boxes if you haven’t got them already. Approximate cost: $400 – $3,000

Property repairs and renovations –When buying a new home spending money on repairs and renovations is very common. Common repairs include painting, flooring, lighting repairs, kitchen repairs and maintenance, bathroom repairs, electrical repairs as well as giving the exterior a touch up to give your new home that personal touch. Approximate cost: $1,500 – $20,000

Costs associated with moving:
Loan Fees	$Nil-$800
Mortgage Discharge	$1,000-$2,500
Stamp Duty Based on a home valued at $1.1 million	$45,990
Inspection Fees	$300-$1,100
Real Estate Commission Based on a home valued at $1.1 million at 2% Commission	$22,000
Auctioner Fees	$6,000
Moving Costs	$400 – $3,000
Property Repairs and Renovations	$20,000
Total Costs Estimate	$103,890

Additional inconveniences and disruptions related to purchasing a home:

• Relocation of services – When moving you will need to relocate your existing services to your new property. This can include transferring and updating your: Gas, Electricity, TV, Internet/Phone, Insurances, Licenses and addresses for your bills.

• Disruptions in relocating – When moving to a new home you face the uncertainty of not knowing who you are moving next to. You have to consider that your new neighbours may not be as accommodating as your previous neighbours which you have good relationships with.

• Other things to consider are the need to change – Schools, churches, social groups, gyms, childcare and the commute to your workplace.

 

Benefits of building an addition

One of the benefits of building an addition is that you can custom design your plans to tie in with your existing home and remove the need to move or purchase a new home. Building an addition is the perfect way to add significant value to your existing home whilst bypassing any of the issues related to moving.

We specialise in building second storey additions that seamlessly integrate with the existing structure of your home, giving you an aesthetically pleasing street frontage which will make you the envy of all of your neighbours.

Costs related to building an addition

Plans and drafting – $6,000

Council lodgement – $5,000

Council fees – $2,500-$15,000

The average cost of adding a 3 bedroom, 1 bathroom and 1 living room addition to a home starts from $200,000.

If you are looking for an affordable solution and you are happy with your existing location, have a great relationship with your neighbours and would like to avoid the stresses of moving, then an addition is the perfect option for you to consider.

Give our team a call or complete our Pre-Quote Enquiry Form if you would like to discuss a potential addition to your home. We can conduct a pre-site assessment prior to the builder coming out to meet with you to ensure that building an addition is a viable option on your property for you.