The property buying process in Australia is generally inexpensive and quick. There are also differences in the detail of the process from state to state, so check the precise details of the procedures involved with your lawyer.

Buyers of real estate may incur costs including stamp duty payable to the State Government, conveyancing costs and other legal fees, building and pest inspection reports, a valuation report, and costs payable to a financial institution. API suggests the following when budgeting for the costs of buying real estate.

Price of the property

The price that the buyer and seller agree upon is countersigned on the contract of sale.

Borrowing costs

When borrowing money from a financial institution, buyers are likely to encounter costs such as the loan establishment fee and mortgage insurance (if borrowing more than a nominated percentage of the property’s value).

Buyers will also need to budget for ongoing fees and interest repayments on top of the loan amount borrowed. Fees will vary between financial institutions and buyers should shop around for the loan that best suits their needs. It is a good idea to obtain pre-approval (or at least have an idea of how much the bank with lend you) for a loan before starting the search for your dream home.

Stamp Duty

Stamp duty is a tax imposed on written documents that records or affects certain types of financial or legal transactions. State Government charges the buyer stamp duty when they purchase a property - the percentage scale will vary (ranging from around 1.25% to 6.75%) according to the amount of the sale price and whether or not the buyer intends to live in the property or rent it out to tenants as an investment. 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.

Land transfer registration fee

This varies from state to state with some imposing a flat fee and others operating a sliding scale of charges dependent on property value. Allow anything from 0.01% to 0.6% according to what and where you’re buying.

Valuation report

An independent valuation report on a property can be of assistance to the buyer to indicate a property's current market value. Sometimes the seller will obtain this for the buyer at his or her own cost.

Legal costs and searches

API strongly encourages buyers to seek independent legal advice before signing a Contract for Sale. Issues that need to be understood by the buyer are the appropriateness of accepting or waiving the cooling off period, seeking assistance with understanding the all documents and forms. After a buyer has signed the appropriate forms and the Contract of Sale, they are advised to undertake certain searches - these include a Title search verifying the ownership of the property, a local government building report on the legality of existing structures on the property, and a local government search on the zoning of the property indicating any restrictions on the property and encumbrances on the property easements.

Solicitor's fees are negotiable - it is advisable to compare the fees being charged by a few different solicitors. Good referrals and past experience is valuable when choosing your legal representative.

Each state has its own regulations regarding who can undertake the legal processes (it might be a solicitor or specialist conveyancer, or in some cases individuals are allowed to do their own conveyancing). Budget for between 0.5% and 2% of the purchase price.

Building and pest 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.

Termination of a Contract under cooling-off provision

If a buyer terminates a Contract of Sale at any time during the stipulated cooling period, they have to pay the seller a small percentage of the property price on the Contract. If the buyer has elected to waive the cooling off period provision they will not incur any cost and consequently cannot terminate a Contract.