How much does it cost to sell a house?

REAL ESTATE

Selling a home, particularly a family home, is a very emotional and exciting time. There are many reasons why people choose to sell, ranging from getting a new job and having to move, to just wanting a change of scenery – such as a sea-change or tree-change – or simply requiring more internal and external space because of a growing family. 

However, it’s very useful to know the key expenses involved in selling a home, as some of these can be significant.  From conveyancing costs to agents’ fees to marketing expenses, there’s a lot to consider and get your head around. In this article, we’ll delve into the key expenses and help provide an estimate of what to expect to pay.

Agents’ fees

There are two types of real estate agent fees. There’s a fixed fee, where the agent and vendor agree on a fixed fee for the sale of the property – regardless of what the property sells for. Then there’s a ‘percentage of sale’ fee, where the agent will receive a certain percentage of the final sale price.

The percentage of sale fee, or ‘sales commission’, can range from 1% to 2% (inclusive of GST) of the final sale price. This percentage is influenced by several factors, such as the property value and the competition for business among local real estate agents.

In addition, ‘incentive bonuses’ are also a great way to incentivise a successful sales result from a vendor’s perspective. Effectively, the agent and vendor agree on a percentage-based bonus if the property sale price reaches above an agreed reserve. 

For example, a property expected to sell for a reserve of $1,000,000, being sold by an agent on a 1.5% ‘percentage of sale’ fee and 10% ‘bonus’ fee, that eventually sells for $1,100,000, will net the agent $25,000 in commission. This is made up of $15,000 for the percentage fee (1.5% of $1,000,000) plus an incentive bonus of $10,000 (10% of the $100,000 above reserve).

Remember, everything is negotiable and all fees should be discussed (and negotiated) prior to signing with an agency. The cheapest agent isn’t always the best – ideally you want to go with an agent who has a consistent and successful sales history, and someone who you feel comfortable to work with. 

Presentation & Styling

During 2021, the vendors’ homes which we saw achieve incredible results had a few consistent elements: they were effectively presented, meticulously tidy and clean, and styled to sell with key buyer groups in mind. 

Presentation and removing buyer objections is key to achieving a strong sales result. There are many things you can do to get your presentation and styling right. While major works may not be within everyone’s budget, minor cosmetic changes can make a significant difference. 

Ensure anything a buyer can see is spotless and presented well. This includes paint, floor coverings, windows and window coverings, light fittings, architraves and skirting boards.

Presenting your home in its best light will generate inquiries and increase competition – and if the property appeals to a broad range of active and committed buyers; the better the results.

Spend a few weekends giving your home a thorough spring clean. De-clutter, tidy up the garden, plant new plants and mulch garden beds. 

Furthermore, professionally styling a property with quality hired furniture – will not break the bank – and will translate to a better result at the end of the sales campaign. An indicative cost is approximately $4,000 for a three-bedroom home. 

Finally, we see many vendors make avoidable mistakes when selling their home. See our article on the common mistakes that can hurt your property campaign (Common mistakes that hurt your property).

Conveyancing fees

Conveyancing is the process of transferring legal ownership of a property from the vendor to the ultimate buyer, and is completed by a qualified conveyancer or solicitor.  Vendors should budget between $800 and $2,000 for conveyancing as part of their sale, which will include preparing the contract, liaising with potential buyers’ legal representatives during the campaign, calculating all amounts owing or outstanding, and of course conducting settlement of the property.

Marketing

According to www.realestate.com.au, in 2020, the average marketing campaign in the Melbourne property market cost between $6,500 and $8,000. A typical marketing package is usually tailored for the specific property and vendor. The package will include professional photography, floor plans, advertising sales copy, a signboard, and premium online advertising packages, with all the major search platforms such as www.domain.com.au and www.realestate.com.au

As a result of extended lockdowns in Melbourne and Regional Victoria, recent changes in buyer behaviour have significantly influenced how properties are marketed. Professional walkthrough videos, and 3D tours are becoming very popular, especially as some buyers are now remote. Expect to pay around $400 to $700, depending on the video length and specific requirements.  Finally, properties with a fantastic view or in close proximity to the beach, might lend themselves well to drone photography too. 

Lender fees

Finally, if you have a mortgage on the current home you’re selling, and you intend to pay-out the loan, you’ll need to pay your lender a discharge or early exit fee.  Each lender charges customers a different amount, however expect to pay between $150 and $1,000. Your lender (or mortgage broker) will have their own mortgage discharge forms to complete, with the entire discharge process usually taking between 7 and 21 days from form submission. 

Always seek advice from a trusted professional.

Purchasing and investing in real estate is exciting and when done well, can significantly transform your life.  Your local One Agency specialist, lives and breathes real estate in your area and has insights into exactly what is happening in your community.  

Now is a great time to get started on your property journey, or continue climbing the property ladder, as interest rates are at an all-time low. Our agency is also seeing high-quality family-oriented supply begin to come onto the market, and this is set to continue as we progress through summer.

To learn more about the benefits of real estate investing and what prices may do long-term, please contact us at One Agency.  With One Agency being one of Mildura’s most trusted real estate agencies, we are well placed to provide you with our view of the current market based on our local experience. We’ll thoroughly guide you through the process and help you take advantage of this opportune time in the property market.

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