If you have decided to downsize and sell your family home, chances are your attention is focused on the money you stand to make from the sale rather than the costs you are set to incur. However it is important to remember that there are also a number of fees you will be liable to pay, many of which are unavoidable.
Whether you choose to advertise your home privately or place it up for auction, you will have to start paying out soon after you make the decision to sell and settle upon a real estate agent – long before you’ve even found a buyer for your property. Here are all of the costs you need to be aware of when selling a house in Australia.
So you have decided to downsize and sell the family home, but how do you go about finding a suitable buyer for your property? The first thing to do is market your property so people are aware that it’s on the market. There are many ways to do this and your real estate agent, should you choose to hire one, will advise on the best plan of action to make sure you find a buyer within the right price bracket.
Marketing can include everything from adverts in local newspapers, online adverts, professional photography and visible banners and display boards outside your home. As a general rule it is estimated that this should come in at around 0.5 to 1 per cent of the total value of your home. So if your property is valued at $600,000, you should expect to pay anywhere between $3000 and $6000 for marketing.
The amount of money you will be required to pay your agent depends entirely upon the agreement you signed with them. Real estate agent fees are typically split into two areas; flat fees and percentage of sale fees.
The former is a fixed rate agreed upon between you and your agent, regardless of how much your property eventually sells for, while the latter refers to the percentage of the final sale price that the agent is entitled to and, according to realestate.com.au, the average rate in Australia is currently between 1 and 3 per cent.
There has also been a rise in fixed-fee online agencies in recent years, such as Purple Bricks, Upside and PropertyNow. The main selling point of these companies is the ability to know upfront how much you will have to pay your agent as they charge a one-off fee for their services. For example, in Upside’s case the fee for selling your home with them is $8,900, or $9,700 if you choose to sell via auction. It should be noted though that the fee will vary between companies.
However, where traditional real estate agents take care of most of the hassle for you, with fixed-fee agents, more of the onus falls on you, the homeowner.
If you’re selling up, you will also have to factor in the cost of a conveyancer who will handle all of the legal and practical aspects of the sale for you. Their work includes ownership transfers, preparing and lodging all legal documents, including the contract of sale and transfer of land document. They can also advise you of state and federal legal requirements regarding building and pest inspections, or payment of stamp duties.
Typically conveyancers charge anywhere between $800 and $2000, depending on which state or territory your property is in.
If you’re selling up and buying another smaller property, then you will need to pay stamp duty. It is the tax on the sale of a property and covers the costs of changing the title of the property and ownership details. According to the Australian Tax Office, the amount of stamp duty you will be liable to pay depends on which state or territory you reside in.
While the majority of costs related to selling a house are unavoidable, there are also some additional things you can spend money on to ensure the process is swift and successful. These include things like the cost of hiring a professional cleaner to give the property a once over before you have photographs taken.
Another additional cost to consider is the price of carrying out any necessary repairs and renovations to make your home as attractive as possible before listing it for sale. This can be anything from repairing cosmetic damage such as cracked plaster, to tidying the garden or hiring a professional to ‘stage’ your home. It would also be wise to factor moving costs into your budget, as you may need to hire professional removalists to transport your larger furniture to your new property.