Strong market conditions mean that sellers are realising record-high prices for their homes. If you’ve been considering selling up, now might be the perfect time.
Before you start styling the lounge, though, it’s important to be aware of the costs involved. Most of us are aware that real estate agents and conveyancers will charge a fee for their services. There are several other aspects to selling that also carry a cost.
Knowing what you’re up for ahead of time can help you plan better.
This is the big one. Most real estate agents charge a commission, which means they take a small percentage of the final sale price. Others work on a flat fee basis, so if you prefer that approach it’s worth shopping around.
Commission percentages vary from as low as 1.5% to as high as 3.5%. Many agents will also offer a tiered structure. Under this system, you may pay a lower percentage (say, 2%) unless the property exceeds an agreed-on sale price in which case you pay a higher fee (say, 2.5%). Alternatively, you may use a bonus system: you pay 2% on any price under an agreed reserve, and then a higher percentage (up to 10%) of the amount over that price.
If you sell your house for $800,000, with a flat commission structure of 2%, your agent fee will be $16,000.
As long as you and your agent agree on the commission structure, there is no hard and fast rule about which to use. Remember, you can always negotiate prior to signing the agency agreement.
If you decide to sell by auction, you’ll also need to pay the auctioneer. This is generally a flat fee and ranges from $400 to $1,000.
As well as the fee to the real estate agent, you’ll need to pay for marketing. This covers the cost of the photographer who will come and photograph your home, the ‘for sale’ board outside your home, online listings on property marketing websites, professional copywriting and brochures.
Typically, agents will offer a range of marketing packages. An expensive high end property, or an unusual one, may reward an extensive marketing campaign. If the home is very prestige, for example, it might attract international and interstate buyers. A wider marketing campaign can create greater competition and achieve a higher sale price. On the other end of the spectrum, if you’re selling a modest unit you probably want to keep marketing costs low.
Accordingly, marketing campaign costs vary considerably. Budget anywhere from $3,000 to as high as $10,000. You can discuss the pros and cons with your agent to help decide what the best investment is for your home.
Styling and maintenance
Styling is distinct from marketing, although it’s another way to help maximise your sale price. The aim is to make your home appear as attractive, spacious and appealing as possible so that potential buyers can see themselves living there.
Professional styling involves someone coming in to help. They may give you tips about decluttering and advise which bits of furniture and artwork to make the space look its best. They may also put your furniture into storage and replace it with furniture and accessories that tie together and showcase the space.
Depending on the service, and the size of your home, a professional stylist can cost as little as $1500 or as much as $10,000 – or even more for very high end furniture and finishes.
The other part of styling your home is to do any little repairs that you’ve been putting off. That leaky tap, or the faded paintwork on your walls, can drive down the asking price. Have a look around at what needs doing and contact your local tradies for a quote.
Conveyancing is the legal process by which the property is transferred from you to the new buyer. There is a required set of paperwork to be lodged, which can be done by a licensed conveyancer or solicitor. The conveyancing process is fairly involved and is best done by a specialist.
- Undertake searches to make sure you can pass the title unencumbered
- Calculate the adjustment of fees and taxes between you and the buyer
- Prepare, certify and stamp legal documents
- Liaise with the bank and the buyer’s conveyancer to arrange and effect settlement
Conveyancer fees vary from company to company and from state to state. You should also make sure you understand the fee structure of the person you’re using. Some conveyancers charge a single all-inclusive fee. Others charge a lower flat fee, but add on extras such as a file management fee or a fee to contact your bank. Neither method is better or worse, as long as you understand which one your conveyancer is using.
Budget between $800 and $2,000 for this service.
If you are selling a home with an existing mortgage, you will need to discharge the loan as part of the sale. This means that the lender will lift their caveat from your title so that you can sell the property, in return for you paying the mortgage with the sale proceeds.
Bank fees vary depending on the type of loan you have, but can be anywhere from $150 to $1500. You can ring your bank and ask what the fee will be in advance.