And the differences continue
We’ve officially begun our house search in Australia. And boy is it different than our home buying search in the US. First, I’ll start with the positives.
1. We may be able to afford a house in Australia solely on 1 income! In the US, MJ and I had to both work full-time to be able to make ends meet. Meanwhile, according to the all our calculations and the bank people, we may be able to get a house on solely MJ’s income for now. It won’t be the greatest of houses but it’ll be a little more than a rundown shack. Yay!
2. Homeowners insurance is way cheaper than that of the US. Depending on which type of house we choose, the premium will range from $140-$250 a year. Not bad, compared to the $450 a year premium in the States.
3. Tax rates are much lower. In NJ, average yearly tax for the area we lived in was about $6,000 a year. Around here, we’re expecting to pay about $1,500 a year. Major difference.
4. The mortgage insurance points fee (or whatever its called) is much, much cheaper. It depends on how much the house costs but it’s nowhere near what you can expect to pay in the States.
5. First-time home buyers are given money to help with the deposit! Some parts of the US are given money as well but they tend to be if you buy in more urban areas.
Now, the negatives.
1. Mortgage interest rates are a couple of percentage points higher.
2. In the US, you can go into any realty agency and say you’re looking for a house. A realtor will work with you and do all the researching, drive you around to see the houses, and will do the negotiation for you. You usually don’t have to pay anything as a buyer upfront. The buyer’s realtor splits the commission of the sale of the house between himself and the seller’s realtor. However, in order to get that same type of treatment in Australia as a buyer, you will have to hire a realtor to work on your behalf and pay a fee. I’m not sure how much is the fee as we haven’t gotten to that point yet but still it’s a fee.
3. When a house is listed in the US, the asking price may be a bit inflated keeping in mind of people who will offer lower than the asking price. In Australia, when a house is listed, they specify that they are seeking “Offers over, $”. So it won’t be uncommon to see a house listed as “Offers over, $300,000” or “Negotiable over $350,000”. Right off the bat, they’re saying they want more money.
4. In the US, when you sell a house, you have to honestly complete a seller’s disclosure form. Basically it lists every aspect of the house and you are obligated to be honest and list if anything is defective or needs replacement or so forth. In Australia, there is no such form and sellers are not obligated to tell you anything. They can’t lie to you but they don’t have to tell you anything. For instance, in the US you would tell a potential buyer that there is an old oil tank buried in the yard (if you are aware of it). In Australia, unless you specifically ask the question, they don’t have to volunteer that information. So you have to come prepared with checking the place out thoroughly and ask a lot of questions.
1. It’s routine to have a Home Inspector called in to check the house for any potential problems. In Australia, it’s not as routine. It’s not unheard of but it doesn’t happen as often. So while you can save money by not hiring an inspector, you run the risk of getting yourself stuck with a money pit. Also since they’re not used as often, it’s a bit more difficult to find them. We were lucky to have a friend who is a home inspector in the US. And now we have find one so we’re at a loss.
I’m sure I will encounter more differences but because we just recently started our home search, it’s too soon to tell and I’m not sure what else to expect. I’m sure I’ll pass along our experience. We are going to see a fixer-upper for the 3rd time today and possibly going to make an offer. I’ll let you know how that goes.
And the differences continue