When gearing up to sell a property, most of us are focused on how much it’s worth and how strong market demand is at the moment. But how much does it cost to sell a house? Once we factor in commissions, advertising costs and other unavoidable fees; how much money do we need upfront to pull this all together?
Well, the “big three” are the real estate agent’s commission, the conveyancer fees, and the cost of marketing the property.
However, there’s numerous other optional or variable costs involved; such as going to auction (if you’re that way inclined), potential renovations or repairs, staging costs, professional cleaning, gardening, roofing/guttering and so on. Then there’s the things that come into play after you’ve sold your house, like relocation costs.
So let’s break down the costs involved in selling a property.
The real estate agent’s commission
Given their integral role in the successful sale of your house, obviously the real estate agent deserves a commission for their services and expertise. But how much?
This varies from state to state, suburb to suburb and even from one property to another; based on various factors such as the area’s unique property market, the reputation of the agency, whether the property contains any outstanding features and more.
But to get an overall idea of what percentage of the final sale price you can expect to pay your real estate agent, the average agent’s commission by state is:
- 2.18% in ACT
- 2.46% in NSW
- 2.8% in Queensland and the Northern Territory
- 2.35% in South Australia
- 2.96% in Tasmania
- 2.05% in Victoria
- 2.66% in Western Australia
These figures are based on fixed rates, however some real estate agents charge X% of the property price up to a certain point, and then a higher percentage if it sells for more than that. This creates an incentive for them to help you sell your home for the highest price possible.
Marketing and advertising costs
The general rule of thumb for marketing and advertising costs is that you should invest between 0.5% and 1% of the desired sale price. So if you’re hoping to sell your property for $700,000, you should spend $3500-$7000 on marketing.
This money pays for high-resolution photographs and videos, drawing up floor plans to include in the listing, quality copywriting to highlight the home’s standout features, brochures to hand out at the home opens – right down to the “For Sale” signboard out the front.
When done properly, this investment pays for itself.
Be sure to work closely alongside your agent to establish a well thought-out marketing campaign with clear time frames, designed to reach your target market. It’s important to gain a clear understanding upfront of what marketing costs are/aren’t covered in your real estate agent’s commission, so that there are no costly surprises later.
Choose a reputable real estate agency with a decent website containing a well-maintained listings page, active social media with regular listings posted, e-newsletters to subscribers and so on. This digital side of things is all “free”, so it’s best to make the most of it.
As for printed listings in the newspaper, it’s hard to say whether this is worth it for your particular home. It ultimately depends on readership in your area and might be worth discussing this matter with your agent.
Conveyancing is the transfer of legal ownership from the vendor to the buyer. It can only be done by a licensed conveyancer or solicitor, and typically costs between $800 and $2000 in Australia. This cost includes preparation of the contract, liaising with potential buyers’ legal representatives throughout the campaign process, and the settlement of the property.
Renovations, repairs and general maintenance
This covers everything from upgrading your bathroom for increased property value, to painting over the previously water damaged interior wall, fixing the crooked kitchen cupboard, clearing the gutters, trimming the hedges, cleaning the pool and so on.
Particularly if you were renting your house out to tenants previously, it’s crucial that you conduct an in-depth inspection of the property and cover the standard landlord repairs and maintenance costs.
Staging your home
When it comes to the costs associated with “styling” or “staging” your home, it’s kind of a “how long is a piece of string” situation.
You might need to hire high-end furniture for every room of the house, which could cost up to $4000. On the other hand, you might already have the home very well-presented; in which case it might be a matter of borrowing some decent outdoor furniture from your friends to spruce up the backyard, for example.
It’s worth getting your entire home professionally cleaned before showing your home, with steam-cleaned carpeting, dust-free hardwood flooring, pristine windows and so on.
The main takeaway with staging costs is that you get out of it what you put in. The more immaculate your property is at the time of home opens, photographs and the rest of the marketing stage, the better impression it’s going to make on potential buyers. Don’t be afraid to invest in styling your home before going to market!
If you’re going to auction off your property, ask your real estate agent if their commission includes the auctioneer’s fee. If it doesn’t, then you’ll need to book an auctioneer in advance and expect to pay up to $1000 for this service. This is generally the cost of an auction Australia-wide.
Still got money owing on the mortgage of the home you’re selling? Your lender will charge a fee for exiting out of the loan early. This can be anywhere between $150 and $1500, depending on how much is still owed and the lender’s specific policies.
The cost of moving typically costs between $500 and $2000, depending on where you’re moving and the size of your household, how much furniture you’re transporting and so on.
Capital Gains Tax
In Australia, the Capital Gains Tax on selling a property is usually between 15% and 20% of the sale price. However, this varies and there are exceptions to the rule – but that’s a whole other article!
Need help covering the costs of selling your property?
At RealtyAssist, we offer vendors up to $50,000 upfront to go towards marketing and advertising costs, as well as the other expenses associated with selling your home.
Whether you need funds for renovations, repairs, gardening, staging or even relocating into your new property; we can assist. With our premier product, VPA Collect, you can enhance the value of your property and sell faster.
We are leading the industry, with extremely competitive fees that are often lower than you’ll see from a regular credit facility. VPA Collect provides a 60-day term for the credit advanced, with a single credit fee of 4% of the funds advanced. It’s that simple.
First, you list your home with your chosen agent. Your agent completes the VPA Collect Request online, and we provide the funds to get you started on your sales campaign. Afterwards, you repay VPA Collect at settlement (or prior – up to you!).
For more information, give us a call on 1300 355 729 or email [email protected] and one of our friendly professionals will be happy to assist.