Putting your property on the market can be an exciting time. But while you might be looking forward to the title changing hands and that lump sum arriving in your bank account, it can be easy to forget all the other steps involved, not to mention the costs.
Some costs are unavoidable, such as real estate agent fees, conveyancer fees, and the cost of marketing your property to potential buyers. But there are plenty of voluntary costs sellers take on in the hope they’ll be able to bump up the sales price. We run through a few below.
Real estate agent fees can take the form of either a flat fee or a commission. If you’re paying a flat fee, you and the agent will agree on a fixed amount beforehand and this will be paid regardless of how much the property sells for.
A commission on the other hand is a percentage of the final sale price, usually between 1 and 3 per cent. To use an example, if an agent sells a property for $700,000 and the commission is 2 per cent, you can expect to pay $14,000.
A tiered commission can also be used. Under this arrangement, a vendor agrees to pay an agent a higher percentage on amounts above the agreed reserve, incentivising them to work for the best possible sale price.
A licensed conveyancer or solicitor will be required to transfer the legal title of land from you to the new owner. Their services can cost you anywhere from $1,000 to $2,000, so it’s a good idea to get a few quotes in advance before you make your decision.
A standard marketing campaign will usually involve signage, newspaper advertising and an online listing. But if your budget allows it you can go much further, such as by hiring a professional photographer, printing flyers, and getting a floor plan produced.
Ultimately, the size of your marketing campaign will come down to how much money you’re willing to spend, but you can usually expect to pay between 0.5 and 1 per cent of the property’s value. That means if your home is valued at $700,000, the cost will be between $3,500 and $7,000.
Mortgage discharge fees
This one applies if you’ve still got a mortgage on your home. Before you can sell, you’ll need to complete a discharge form and submit it to your lender. It can take up to three weeks for this to be processed, so make sure you don’t leave it till the last minute.
If you have a fixed rate loan, terminating it comes at a significant cost to your lender, so you can expect break fees to be in the thousands of dollars. This will usually be added to the amount your lender receives from the sale.
Nowadays, many sellers will hire a home staging service to help entice potential buyers. This involves bringing in furniture and homeware to improve the look and feel of the property, and it’s known to boost sale prices by up to 10%. The cost will vary depending on the service and the size of your home, but we can ballpark it at around $2,000 for a six week display.
Pre-sale cleaning and repairs
When selling a home, it helps to view it from the eyes of a potential buyer. Would you be impressed by what it has to offer, or are there bits and pieces that aren’t up to scratch? If you feel like some rooms could use some touching up, taking the time to do so could help increase the appeal of your home.
This might involve giving the walls a fresh coat of paint, repairing any faulty cupboards, or just making sure all the rooms are clean and presentable. While you might be able to do these yourself, it’s a good bet to hire a professional so you can be sure you’ll get the best possible results.
If you plan to sell via auction, you’ll also have to hire an auctioneer. Sometimes this cost is included in the real estate agent’s fees, so make sure to confirm with them if that’s the case. Otherwise you can generally expect to pay around $600 for an auctioneer’s services.
For more information, be sure to browse our tips for selling your home. And if you’re in the market for a home loan, visit our home loan comparison page, or check out the selection below.
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