What is the Cost of Selling a House?
No matter which way you go about it, selling a house always has fees attached to it. The good news for the thrifty home seller is that selling privately helps cut the costs.
Many homeowners choose to sell privately to save on agent fees, but it pays to be aware of the many other inescapable costs you can incur when selling a house.
If you’ve read our blog on fees when selling a house, you’ll already know that selling a home comes with a range of expenses. It’s essential to keep these in mind because, well… there’s often just no way around them.
Read on to learn just how much it costs to sell a house and what you’ll need to consider if you want to go it alone.
Unless you’re a property law expert, you’ll probably need a conveyancer to handle all the paperwork for your sale and transfer the title, which can cost anywhere up to $1500.
However, with house sales moving online now, many sellers and buyers are turning to flat-fee online conveyancing options.
And if you’re feeling confident in your DIY conveyancing skills, be sure to check out our guide here.
2. Real estate agent’s fees.
While selling through an agency does have its pros, the big con is the attached price tag (which can reach tens of thousands per sale).
The idea behind commissions is that they’re supposed to incentivise your agent to sell your house for more—a higher price means a higher commission, right?
Wrong. Most agents won’t tell you that the agency takes a hefty cut out of their commission, so there’s really no reason for the agent to push harder for a bigger sale. Some even get no commission at all or rely on bonuses for listing (note, not selling) more properties (which completely negates their need to bring you the best price possible).
The average commission varies from state to state and between regional areas and capital cities.
Agent bonuses are effectively incentive bonuses, where you and the agent agree on a percentage-based bonus if your property makes above the agreed reserve. Again, you’ll want to know if the agency takes a significant percentage of this bonus, making the incentive for the agent to do extra work less attractive.
You’ll generally set this percentage with an agent, but it could be up to 10% of the amount above the reserve.
P.S. For more secrets real estate agencies don’t want you to know, read this blog.
3. Selling your home privately using online platforms.
With most buyers researching and purchasing property online these days, a real estate agent’s job has gotten even more straightforward.
Choosing a private selling online platform like PropertyNow gives you all the services a real estate agent offers within a fixed listing price—no commission required. We believe you can successfully sell a house yourself without paying exorbitant agent commissions, and we’re here to show you how.
But you don’t have to go it alone. We’ll give you access to our team of professionals and the platform you need throughout your property sale process. You’ll get the satisfaction of selling it yourself while enjoying the savings from a traditional agent’s commission fee.
And our fixed service price is just $694. Compare that to the $12.5K you could pay in agent’s commissions if your home sells for $500K!
4. Marketing costs.
That all-important ‘For Sale’ sign.
Physical signs on your property are a great way to spread word of your sale in the local area. They allow drivers by a quick insight into your home and let people know it’s still available. Who knows? Your buyer could be right around the corner.
These cost approximately $65 each.
Property evaluation and market reports. Setting the price for your home is the key to a successful sale. With a professional’s property evaluation, you can move forward with confidence.
Why do you need a detailed evaluation of your home? Most people’s mortgage lenders will request a professional property valuation, but it has other benefits. It helps you decide whether you’ll need to upgrade your property before selling to increase its value and reduces the buyer’s risk of overpaying.
It’s important to note that your final sale price might differ from the valuation included in the report since emotions, market knowledge, and other factors may affect negotiations. Expect the valuer to visit your home, check for structural faults and nuances that might affect its market value and send you a 3-page report of their findings within three days.
The exact cost of a property valuation depends on your home’s size and value, however
a professional evaluation will usually set you back anywhere between $300-$600.
Do you know the property market inside out? You can also evaluate your property and set your own price. We’ve got all the tips here.
And if your property isn’t super unique or you know of comparable sales nearby, you might be able to get a free property report rather than a professional valuation.
Online property listings. 90% of buyers turn to the Internet to begin their search. Online marketing is everything for property sales, so it’s essential to list on the leading sites such as realestate.com.au.
Listing online is totally up to you, but they’re often your best chance of getting a great price sooner.
Inspection booking software. In a fast-paced market, interested buyers will want to book an inspection ASAP, or they’ll lose interest. That’s why inspection booking software is crucial, and a quick Google search will show you how many there are to choose from. However, good appointment bookings and management software will come at a cost.
These are often subscription-based services and start from $10 per month.
5. Online property listing upgrades for additional exposure.
If your home listing isn’t on major selling platforms like realestate.com.au, you’re not reaching your most promising buyers (technically, this point is part and parcel of your marketing costs, but it’s so crucial to the success of your sale, we thought it deserved its own section).
Upgrading your listing on REA lets your home be seen by more of the right buyers, exponentially increasing its chance of a quick, more lucrative sale. At the blue-ribbon level, Premiere listings get 3x the number of enquiries compared to standard listings, with Highlight listings attracting 1.6x enquiries and Feature listings bringing in 1.2x enquiries compared to standard listings.
Yes, it will cost you more, but it’s worth weighing up the pros and cons to see if it’s worth it in the long run. Prices vary dramatically by property type and location, plus REA is constantly tweaking its prices. However, you can get an exact quote using our unique tool after you sign up for a PropertyNow service.
6. Home prep (renovations, repairs, staging, cleaning).
For the most part, the amount you spend on preparing your property for sale is entirely up to you—it all depends on how far you want to take it! At a minimum, you should:
Depending on your property’s needs, you should also consider investing in renovations or repairs.
Of course, you can save money by doing these tasks yourself. However, if you hire someone else to give you a hand, you’ll need to factor this into your budget for selling your home successfully.
What are some extra costs of selling a house you may not have considered?
7. Auction fees.
If you hire an auctioneer to put your home under the hammer, you can expect to pay between $400 and $1000, depending on experience.
8. Capital gains.
Capital Gains Tax is only applicable to some property sales, such as investment and commercial properties.
Capital gains tax (CGT) is part of your income tax, not a separate tax. When selling an asset (such as real estate or shares), you usually make a gain or loss (the difference between your purchase price and the asset’s final sale price).
Because you don’t withhold tax when you sell an asset, you must report this difference on your tax return and pay tax on any gain. When you sell monies investment or commercial property, you’ll want to work out how much tax you’ll owe and set it aside to pay with your next annual tax bill. Learn more about calculating CGT here.
9. Lender fees.
Even finalising a mortgage when you sell your property has its own set of costs. An exit fee is a one-off fee charged by your lender (bank) to close your account. Most banks charge less than $400 in exit fees. If you took your mortgage out before 1 July 2011, your lender might also charge you a Mortgage Exit Fee. If this applies to you, read up about it in this article.
Sell for more, with fewer fees. Call PropertyNow.
With some research under your belt and a step-by-step approach, you could be a sell your own home success story, too.
If you have any questions, please don’t hesitate to reach out—we’d love to help.