One of the main goals we have in selling our homes is to earn a bit of money. And if we’re lucky, it’ll be a pretty penny more than what we invested in it. But let’s not forget the associated costs in selling a home. There’s the staging, the conveyancing, the agent’s commission, and the taxes… these factors really add up.
But we’re not here to scare you, we’re here to inform you! The best way to stay prepared is to be knowledgeable of all the fees concerned with selling your home. So before you make the leap, here’s a list of what to think about first.
If you’ve bought a home before, you’ll probably know about the conveyancing process. It is a necessary step for every property purchase. To be brief, conveyancing is the legal procedure of handing ownership from one person to another. And while seemingly simple, it involves time, lawyers and their hefty fees.
You can also use a solicitor or do it yourself, but be warned, the DIY option requires lots of time and admin. So we do advise consulting a professional. They’ll be able to mark out any issues or special cases early on.
You can expect to pay anywhere between $900 and $2,500 for this. And the process can take several weeks. Prepare to add this to the final cost of selling your home because there’s little way around it.
There are a few steps to take to find the best agent for you, and you can read up on that here. We recommend doing some homework first. And before you jump at the opportunity for a less expensive real estate agent, remember that their fees aren’t always the best indication of their expertise. You’ll want to be assured that your real estate agent can sell your house well and efficiently.
There are two different types of agent fees and this is discussed before you sign on with your realtor:
Flat fee: this is a fixed charge for the agent’s sale of the property. Regardless of how much the property sells for, their fee will stay the same.
Percentage fee: here, you and the agent agree on a percentage of the final sale price that will go to the agent. This percentage usually ranges from 1-4%.
While the flat fee is more straightforward, the percentage fee depends on different elements like how much your home is valued at as well as the agent market. Commission isn’t regulated in Australia so postcodes with a higher number of listings may force agents to lower their rates to be competitive. The inverse applies to quieter areas where fewer listings for sale means fewer agents and higher rates.
There’s also the potential for a tiered commission structure where the percentage of commission depends on what the property sells at. The higher the sale price, the higher the commission. Some real estate agents do prefer this method and can be a great incentive for them, and you can be confident that your agent will fight for the best price on your home.
Again, discuss these with your agent before moving forward.
A reputable agent will know how to market your home effectively. But you will be responsible for the marketing costs to sell your home. Your realtor may include some advertising in their commission, but you’ll have to cover other costs like these:
- Advertisements in metropolitan/local newspapers and property magazines
- Online advertising
- Brochures and/or flyers
- Professional photography
- Video production (if a professional team is required)
- Floor Plan layout
Your agent will draw out a marketing strategy and show you how they’ll promote the sale of your home. The upside of listing properties on Soho is that it’s free of charge for agents, whereas other platforms are chargeable.
Every home is different, but to give you an idea, sellers spend an average of 0.5-1% of the value of their home on marketing alone. But you probably won’t see these costs until the house is sold and your agent rounds up all the numbers.
Marketing is a sound investment and we do encourage expert photography as a starter. Professionals know how to feature your home in the best light, offering more opportunity for potential buyers.
Lender fees/mortgage fees
Lender fees come in if you’ve got a mortgage on the home you plan to sell. These are also known as discharge or termination fees. Generally, they cost between $200 – $1000 on top of all other costs to sell your home.
There are also break fees which are commonly applied to longer fixed-term loans. It’s tough to know exactly what you’ll have to pay out so contact your lender for more information. The next step will be to fill out discharge forms and wait for the processing which takes around 2-3 weeks.
Cleaning & staging costs
Before the photographers come in to take photos of your home, you will want to make sure it’s as clean and impressive as possible. They might assist you in minimal staging, but it’s best to prepare your house beforehand. You can also take this chance to get it ready for inspections.
Clear out extra things which make it look messy—things like clothes, kids’ toys, extra furniture and other personal items. If you don’t have room to move these to a different area in the house, consider renting out a storage unit. Costs for these will vary between $60 – $500 a month.
On top of all this, your house might need a deep clean. Hiring professional cleaners will be between $30 – $50 per hour, with the total sum depending on the size of your home. This may be an option worth exploring if you don’t want to handle it yourself.
And if DIY really isn’t your thing, there are many worthy, professional stagers that will swoop into your home and outfit it with furniture and home decor that sells. This kind of service might cost up to $6000. Shop around and get quotes before making a final decision. It’s best you configure this into the budget you’ve set to sell your home.
Auction vs private sale cost
Another option that’ll impact the costs of selling your home is the method. Are you going to put it up for auction or choose a private sale (also known as a private treaty)?
An auction allows all potential buyers to bid on your property. You choose a reserve price, and once the bidding goes above that (even by $1), your house must be sold to the highest bidder. However, if it doesn’t go above the reserve price, it doesn’t go on the market, at which point you might opt for a private sale.
A private sale is when you engage a real estate agent who acts on your behalf. They are in charge of marketing and negotiating with the potential buyers.
There are pros and cons to both methods, but if we’re talking about costs, auctions may be more expensive. This is because the seller is responsible for the marketing costs regardless of whether the property sells or not. So if you’ve invested all this money into marketing and no one bids enough for it at the auction, you’ll need to spend again to sell it privately.
To make this decision, do some research on the real estate market in your area. If there are frequent auctions, and decent competition then an auction may be your best bet. But it’s best to consult your real estate agent before deciding. Ask for examples of both auctions and private treaties in your neighbourhood before weighing up the costs.
So there’s a round up of the associated costs of selling your home. And if you haven’t found your next home yet, we can also help you out in that department. Browse our search page to check out some amazing listings available right now. But don’t just stop there, download our app to get the full Soho experience. Just remember to shortlist or swipe left on our listings so we can send you others that better match what you’re looking for.