Most people know that the cost of buying a property is more than the amount they pay to the real estate agent. But how much more?

Individual contracts of sale can vary and level of borrowing affects cost, but most advisers say that prospective purchasers should budget to add around five percent to the purchase price of the property for the various fees and expenses. Where does that money go?

Regulations vary from state to state and country to country but the possible costs include

• mortgage application fee

• solicitor’s conveyancing fees (plus disbursements including title searches, survey identification report, strata title report, (if needed) registration fees, inquiry and certificate fees charged by government authorities and administrative costs such as photocopying and phone calls

• stamp duty on purchase price (sliding scale)

• stamp duty on mortgage

• valuation fee (may be charged by your lender)

• mortgage insurance (may apply)

• building inspection and pest inspections

It is possible to shop around and reduce some of the costs. Some people use a Do-It-Yourself Conveyancing Kit, but of course this can be time-consuming for the novice. Don’t forget that buyers who can afford to put down a reasonable deposit will have lower interest repayments as well as possibly saving on mortgage insurance.