From conveyancing to agent fees to marketing expenses, there’s lots to consider when weighing up the true cost of selling a house – so where do you start?
While Australian home owners are welcome to try and sell their property on their own, it’s generally not an advisable practice. Real estate agents are licensed professionals that have the tools to reach the right buyers, and to ultimately sell your home for the best possible price. Of course, this service doesn’t come for free. If you live in Melbourne, a typical real estate agency commission rate is between 1.6% and 2.5%. In regional areas, home owners can expect to pay between 2.5% and 3.5% commission to sell their property.
While the commission paid to a real estate agent is one of the more obvious costs when it comes to selling property, there are a few other factors that are generally considered to be non-negotiable.
Eight Factors That Add To The Cost Of Selling A House
The true cost of selling a house can vary significantly depending on factors like the market value of your home, what repairs are needed, and how much voluntary marketing and maintenance you opt for.
If you’re looking to sell a house or property in Victoria, the good news is that we have the lowest real estate commission percentage on average when compared to our neighbours in the other states and territories. According to Open Agent, the average commission charged by real estate agents in Victoria to sell a property is 2.05% – the lowest in the country. While this may sound like a lot, it’s certainly a lot more favourable when compared to the nation’s highest in Tasmania, which averages 2.96%.
While the commission that homeowners pay to a real estate agent is considered to be the largest outlay when it comes to selling a property, there are a medley of other costs to consider during the process – some are optional, and others not so much.
Conveyancing – The cost for conveyancing fees in Victoria range from $700 – $1,300. While it’s completely legal to sell your home without the help of a qualified conveyancer, you open yourself up to making mistakes in the settlement process. One wrong move, and you could be out of pocket by the thousands.
Marketing Fees – If you want your property to “get seen” by potential buyers, photos, floor plans, internet listings and brochures are all necessary evils. A good guide is to invest 0.50% of the value of your home into the marketing efforts, as this often varies between $2,000 – $10,000 depending on where you live, and how aggressively you wish to advertise the property.
Lender Fees – While the Australian government banned exit fees on all variable rate mortgages in 2011, mortgage discharge fees still apply on fixed loans. Depending on your lending institute or the type of loan agreement you have, expect to pay between $150 and $1,000 for mortgage discharge fees.
Capital Gains Tax – While not applicable if you have been living in the property you are looking to sell, capital gains tax applies to investors who are selling assets such as real estate, shares or managed fund investments. If you’re unsure if paying CGT applies to you, be sure to do your research via the Australian Tax Office.
Pre Sale Repairs – Before selling your property, you may want to give it a quick “once-over” with a paint brush and some minor repairs. How much you spend is totally up to you but, remember, spending a lot may not necessarily see you get a return on your investment. For some, it’s a new coat of paint while for others, it’s a complete kitchen renovation.
Council Fees – Depending on how quickly you sell the property, you’ll be liable for a portion of the council rates for the current quarter. If you’re selling a unit in a strata building, then you’ll also need to pay a portion of the body corporate fees. While technically not a fee exclusive to selling a house, it’s important not to forget about how much of the rates you’re still liable for.
Home Staging – The goal of home staging is to make a property visually appealing to the highest number of potential buyers, thereby selling a property more swiftly and for more money. If you intend to hire a company to assist you with your home staging, you can expect to pay somewhere between $2, 000 and $8, 000.
Moving Costs – Although it’s probably the last thing we think of when it comes to the cost of selling a house, things, don’t forget to allocate between $500 and $3,000 to moving costs to see the entire process through. You’ll also need to have a plan as to where you’re going next in terms of renting vs buying another property.
Should you be looking to sell your home, enlisting the services of a property advisor can often be a game changer for vendors. As an example, your advisor would likely research the property, local agents, check the zoning, evaluate market conditions, and communicate clearly with the owner regarding all of their options. When working with a reputable advisor, this often results in homeowners being able to sell their property for significantly more than they initially thought possible.
Keeping Down The Cost Of Selling A House
A completely free service, Emergency Services Property Advisors provide property advisor services to Police, Fire, Ambulance and S.E.S personnel and their families right across Victoria.
If you are an emergency services worker looking to potentially buy or sell property in the future, please get in touch with Emergency Services Property Advisors today to discuss how we can turn your real estate dreams into reality, or call Luke directly on 0414 757 705.
