Selling a house in Australia is exciting but undoubtedly takes a lot of work. As such, you’ll want to have a clear view of all the associated costs before you get started, whether you’re:
- Upgrading
- Downsizing
- Relocating
From agent commissions to legal fees, it all adds up. We will outline in this article the common costs you incur while selling a house in Australia.
Real Estate Agent Fees
The most significant cost involved in selling a house is the commission that a real estate agent will take. The rate that agents charge for their services in Australia generally lies between 1.5% and 3% of the sale price.
This rate can vary according to:
- Where the property is located
- The agent’s experience
- The amount of services provided
For example, the fees in major cities such as Sydney and Melbourne may be slightly higher since demands are higher and the value of property is also higher.
Fixed vs. Tiered Commissions
Some agents offer a fixed commission, where the percentage remains constant no matter what price a property brings. Others provide a tiered commission structure where, if a property sells over a certain price, the agent takes home a larger percentage of that increase.
Just remember to hash out these details early on and define which services will be covered, like marketing and open houses.
How to Choose the Right Agent
Choosing the right real estate agent will make all the difference during your selling experience. Look for someone with experience in your local market, along with positive reviews from past clients. Don’t hesitate to conduct multiple interviews and even ask for references to be confident in your choice.
Marketing and Advertising Expenses
Marketing is needed to get interested buyers looking at your place, and these can range a great deal in cost. The following are just some common types of marketing expenses:
- Photography and Videography: First-class photos and videos can mean the difference in drawing in buyers. Plan on paying somewhere between $300 and $1,000 for them.
- Online Listings: For online advertising, sites charge anything between $600 to $2,000 depending on the level of advertising display and the length of time the advertisement is on the net.
- Print Advertising: Less used these days but can still be useful in some areas for newspapers and magazines. Typically this can fall between $200 and $1,500.
- Signage: The “For Sale” sign will usually fall between $150 and $300.
Bundled Marketing Packages
Most agents will have marketing packaged deals where services are combined, and there is some savings when buying each component from different sources individually. Consider discussing the packaging and the value provided given your home and target market.
Digital Marketing Strategies
Complementing traditional marketing methods, digital is taking centre stage. It may include using:
- Paid social media commercials
- Email mail-outs
- Virtual tours
These will serve to increase exposure and reach more potential buyers at a higher value compared to more traditional, less modern approaches. Be sure to discuss digital marketing regarding the completeness of their strategy.
Conveyancing & Legal Fees:
Other essential expenditure includes selling a house and legal services. The legal aspects of the selling are taken care of by conveyancers or solicitors; this also covers the change of ownership and the preparation of the contract.
Costs for Conveyancing
Conveyancing costs range from $800 to $2,000, depending on the intricacy of the dealings and the professional that you select. Some firms charge for a fixed price, whereas other firms may be on an hourly rate. You must thoughtfully study quotations and make sure this fee will cover all the services you want, including:
- Title searches
- Document preparation
- Liaison with the buyer’s lawyer
Importance of Choosing a Good Conveyancer
You have to pick a good conveyancer or solicitor who will take you through every step of the process. The best legal experts will organise all the papers in time, keeping all parties in the know and iron out any likely issues that may arise. You can check reviews and reputation in the industry by doing an online search.
Property Styling and Staging
This can really increase your home’s appeal and net a faster sale for a higher price. Professional styling services could cost anywhere between $2,000 to $8,000, depending on the size of the house and also the level of services.
DIY vs. Professional Staging
While professional staging may be expensive, often it offers a very good return on investment. If you are really hard up, you could go for do-it-yourself staging. It could also mean:
- General cleaning up
- Rearranging furniture
- Other cosmetic improvements to increase appeal
Benefits of Home Staging
Home staging will enable buyers to see the place as their future home. It tends to provide the following advantages:
- Emphasises its best features
- Creates warmth that makes people want to stay
- Makes the rooms larger and brighter
Generally, the better the presentation of your house, the more interest it will receive, and sometimes the higher the offers will be.
Repairs and Maintenance
Before listing your property, do any needed repairs or maintenance work. That may mean:
- Fixing leaky faucets
- Painting over walls
- Replacing old fixtures
Costs vary again here, depending on how much work needs to be done. A light spruce-up may only be a few hundred dollars, while major renovations can cost thousands.
Pre-Sale Building and Pest Inspections
Some sellers elect to undertake a pre-sale building and pest inspection to uncover and fix any hidden problems that may deter buyers. Such inspections normally cost in the range of $400 to $800. Sorting these things out early on prevents delays or last-minute negotiations with buyers.
Common Fixes to Consider
Common areas to fix up to make your property more marketable include:
- Sealing any visible cracks
- Ensuring all doors and windows work
- Updating lighting fixtures
Spending dollars on small fixes can pay dividends when people tour your property.
Capital Gains Tax
If the property that you are selling is not considered your main residence, then you may have to pay Capital Gains Tax. CGT is calculated based on the profit made from the sale of the property, and it forms part of your taxable income for the year. The rate depends on your income and period of ownership.
CGT Exemptions
If you have been residing in the property, then you might be exempt from paying CGT in full. On the other hand, if you rent it out or make any other business use out of it, then partial exemption or full CGT may apply.
You need a tax advisor who will be able to help you understand your obligation and ways you can minimise your CGT.
How to Minimise CGT Liability
Some valuable tips in minimising your CGT liability include:
- Keeping thorough records of all expenses related to your property
- Utilising all exemptions available
- Coinciding the sale of your property with your low-income years
Professional tax advice will be of immense importance in going through some of these complexities.
Conclusion
Selling a house in Australia involves some costs, but knowing what these costs are will help one keep a good budget to realise maximum profit. Each and every cost, from the agents’ commission to marketing and legal expenses, adds to the process of selling your house.
You can feel your way confidently through the selling process and get the best result for your property with the help of forward planning and professional advice.
