What? I Have To Pay To Sell My Home!

Selling a house involves a range of expenses beyond just the sale price. Understanding the expenses when selling a home will ensure you won’t be met with any unpleasant surprises. 

So what costs are usually associated with selling a home? Here’s a quick breakdown:

Legal / Conveyancing: In most states, you are not able to sell your property unless you have a contract of sale prepared.  Engaging a lawyer or a conveyancer to ensure your real estate contract is drawn up with accuracy is an important first step. In some states, this is an essential item before you are able to even list your property for sale.

Professional photography of your property: Great marketing is all about using maximum exposure to capture people’s attention and interest in a property. In most cases, the first thing a buyer will see is an image or a walkthrough video of the listing. Therefore, the best way to attract potential buyers is to use a professional photographer and/or videographer. With 90% of buyers likely to see your property online (including The Fold), making sure you have high-quality, accurate images of the property will help your property stand out from the crowd. 

Your appointed agent or agency usually has trusted contacts in this area. 

Professional marketing of your property can help you to achieve a better asking price. However, keep in mind that marketing is a separate cost paid for by the seller in addition to the commission that the agent receives when the property sells.

These funds are are charged in advance of the campaign’s commencement and used to pay for marketing material such as signage, internet advertising, brochure printing, and auction marketing. Based on industry advice, a typical marketing budget is approximately 1% of the asking price. Marketing is normally payable even if the agent does not successfully sell the property.

Agent commission is a percentage that is calculated on the sale price and is paid to the agent at the time of settlement. You don’t need to factor this expense in upfront as the agents commission is only paid if your property sells. The average real estate agent commission for selling a house is usually between 2% and 3% but this depends on your location.

Property styling: To enhance your chances of selling, some agents recommend a professional home stager to stage your home to sell.  This process includes decluttering, cleaning, depersonalising, reorganizing existing furniture and accessories, or engaging a professional home stylist to replace most belongings and furnish the space with rented items.

Selling an investment property:  if you are looking to sell, there are a myriad of costs that you need to factor in. Aside from real estate agent commissions, legal fees, maintenance costs, and marketing costs, you may also need to pay a Capital Gains Tax. Depending on the profit, capital gains tax may apply, impacting the final return on investment. If you own the asset for less than 12 months, you will have to pay 100% of the capital gain at your income tax rate.

If you own the asset for longer than 12 months, you will pay 50% of the capital gain. As a general rule, you can avoid capital gains tax when selling your investment property if that property is your primary place of residence (PPOR). 

Advice – seek expert advice from accountants and solicitors experienced in investment property sales.

Auction fees: if you are selling via auction you may have to prepare yourself for a higher cost than if you were to sell via private sale. This is because the auction process is much faster, marketing & advertising campaigns are more extensive (and expensive), and there are extra fees associated including the cost of the auction itself.  Speak with your agent or their auctioneer for price estimates. Remember, if your home doesn’t sell at auction, you still have to pay.

DISCLAIMER – The information provided has been sourced from established property industry platforms and is for guidance and informational purposes only and does not replace independent business, legal and financial advice which we strongly recommend. Whilst the information is considered true and correct at the date of publication, changes in circumstances after the time of publication may impact the accuracy of the information provided