What costs to expect when selling your property
By Donie Collins, Director of DMC Property Advisory
The costs of selling a property in Australia are substantial and cannot be determined by one figure alone, especially as there are so many variances which come into play. The charges also differ from state to state and location to location depending on whether the property is based in a major city or a less populated region.
This guide will take you through the many different primary costs of selling a house.
While some of the typical costs such as auctioneer’s fees, home improvements, repairs and home staging expenses may not be entirely necessary, it is worth having money set aside for these added extras in case you decide to go down that route. A small investment, particularly regarding repairs and professional styling, could reap huge rewards.
Whilst we are all aware of the agent’s commission, there are several other costs incurred when selling a property. Depending on your circumstances you may need to budget for:
Real Estate Agent Commission
The real estate commission fee is the most significant single cost you will have to pay when you sell your house. You will see that real estate agent commissions can vary depending on the state, location and size of your property.
As agents can set their own rate, it allows you to shop around to find the best deal for your budget. Don’t forget that the lowest commissions do not necessarily work in your favour, however. While you may save on fees, you need to ensure that your chosen real estate agent has a good track record in terms of sales and sales prices. You want a real estate agent who will work hard on your behalf to get you a reasonable price for your home, regardless of the fee you will be paying them once the sale has completed.
Conveyancer or Solicitor Fees
As soon as the house is sold, the title of the house must be transferred from one owner to another. This is done with the assistance of a conveyancer or solicitor.
Like a real estate agent, conveyancing fees will vary depending on the type of services they offer.
Note that disbursements such as title searches, stamp duty and land tax may be charged over and above these fees. So, make sure you understand the full extent of the service they are offering before you agree to their rates.
Marketing Costs
Marketing your house online is one of the most important things you can do to let potential buyers know that your property is for sale. Specific recommendations on the most appropriate way to market your house will be given by your real estate agent. Note, however, unless expressly agreed that the real estate agent will cover any costs, you will have to pay the fees for all the marketing. In some circumstances, you may find that some of the costs are included in the real estate commission, while others you will have to pay over and above the commission rate.
Prices will vary dramatically depending on where your property is located and how prominently you want your advertisements to be displayed.
As advertising is an essential part of showcasing your home to willing buyers, you may want to consider the following opportunities:
Front of house signage
Newspaper listings
Printed flyers and brochures
Online listings
Marketing is especially important if you intend to sell your home or property by auction. As it is only a one-day event, you will need to market your house extensively to widen your reach and attract the crowds.
Mortgage Discharge Fee
A mortgage discharge fee is just one of the costs associated with selling a house and will be payable to your financial institution to close the mortgage. The exact cost will depend on the type of mortgage you have with your bank or building society (a fixed or variable rate) and how much you have left on the loan.
Capital Gains Tax
Capital gains tax is a necessity if the property you are selling is not your permanent place of residence. Any capital gains or losses need to be reported to the Australian Tax Office in your income tax return so that you can pay tax on any gains. The ATO provides helpful information on how you can work out your Capital Gains Tax. They advise choosing the method that will give you the smallest capital gain. Also, be aware of new regulations surrounding the ATO clearance certificate for capital gains tax and how they affect you.
Renovations and Repairs
Renovating or fixing up some minor damage to your property is a personal choice, and it will depend a lot on time and money. However, if there is a chance that you may recoup your costs in the sale price, it is definitely worth considering. While every house is different, is it worth keeping some money in the kitty for minor repairs.
Home Staging Expenses
Home staging may or may not be necessary. The better your house looks, the more appealing it will be to potential buyers. Consultations are provided by a professional home staging company at which point you can discuss prices and ideas.
Moving Costs
Don’t forget to take into account your moving costs if the property you are selling is your primary residence. You will need to consider the charges for the transportation of your belongings once your house is sold if you are not planning to do it all yourself.
Donie Collins is the Director of DMC Property Advisory and holds a Degree in Real Estate and Valuations. He is a Licensed real estate agent across multiple states of Australia and has over 20 years’ experience in the property industry.
Reach out to Donie to discuss the sale of your property and experience the benefits that this service has to offer first hand.
