The price on a listing is not the price you pay
, , conveyancing, inspections, and insurance can add $30,000 to $50,000 on top of the purchase price, and that is before you factor in ongoing costs like council rates and maintenance. This step explains why your budget to the listed price leaves you exposed, and how to start thinking about the true total cost from day one.
Of those who exceeded their budget:
- 18% went $50,000 over on a $500,000 purchase (adding more than $3,500 a year to their loan repayments) .
- 14% had zero savings remaining after settlement.
- 32% had less than $10,000 remaining after settlement .
These are not reckless buyers. They are people who budgeted for the purchase price and missed everything around it.
The number on the listing is not your budget
When you find a property listed at $700,000, your brain does something automatic. It treats $700,000 as the cost. Every decision that follows - how much to save, how much to borrow, what you can afford - flows from that single number.
This is called anchoring. It is one of the most studied biases in decision-making, and it hits property buyers hard. A landmark study by Northcraft and Neale found that even professional real estate agents were influenced by listing prices when valuing properties, despite having years of experience and access to comparable sales data . The listing price became the lens through which they judged value, and buyers do the same thing with their budgets.
The problem is not that you look at the listing price. The problem is that you stop there.
What actually sits on top of the purchase price
On a $700,000 property, here is what the additional costs can look like for a buyer without first home buyer concessions:
Cost | Typical range |
|---|---|
Stamp duty (varies by state) | $15,000 – $38,000 |
Lenders mortgage insurance (if deposit < 20%) | $11,000 – $20,000 |
Conveyancing or solicitor fees | $1,000 – $2,500 |
Building and pest inspections | $500 – $1,000 |
Loan application and registration fees | $500 – $1,000 |
Building insurance (first year) | $1,000+ |
Moving costs | $550 – $3,500 |
Total additional costs | $30,000 – $66,000 |
That is 4% to 9% of the purchase price, on top of your deposit.
Why 4% to 9% matters more than you think
If you have saved $70,000 for a 10% deposit on a $700,000 home, you might feel ready to buy. But the additional costs above could require another $30,000 to $50,000. If you do not have that money, you face three bad options:
- 1Borrow more, increasing your repayments.
- 2Drain your savings to zero, leaving no buffer.
- 3Delay your purchase to save more.
The Finder report found that 70% of first home buyers bought with less than a 20% deposit . That means most are already paying LMI. Add stamp duty and fees on top, and the gap between what buyers expect to spend and what they actually spend becomes significant.
ASIC’s MoneySmart recommends saving 20% of the purchase price plus enough to cover all buying costs . For a $700,000 property, that means a target closer to $170,000+, not $140,000.
The anchor distorts your borrowing too
The purchase price does not just anchor your savings target. It anchors your sense of what the property “costs” you each month. A $700,000 loan at 6.5% over 30 years costs about $4,420 per month in repayments. But that number ignores council rates ($1,500 to $3,000 a year), building insurance ($1,000+), water and utility costs, maintenance (commonly estimated at 1% of property value per year), and if you are buying an apartment or townhouse ($2,800 to $12,000+ per year) .
Your real monthly cost of owning a home is your mortgage repayment plus hundreds, sometimes thousands, of dollars in costs that never appear on the listing.
How to break the anchor
You cannot stop your brain from anchoring to the purchase price. But you can build a habit that overrides it.
Every time you look at a listed price, add a minimum of 5% for transaction costs. If your deposit is under 20%, add another 2% to 3% for LMI. This rough calculation will not give you exact figures. Those depend on your state, your lender, and your property type. But it will shift your thinking from “the price” to “the price plus everything else.”
A property listed at $700,000 is not a $700,000 decision. It is a $735,000 to $765,000 decision at settlement, and a much larger one over the years that follow. The rest of this course will help you map every dollar, but the first step is accepting that the listed price was never the full picture.