Different costs incurred when selling are marketing and legal expenses, agent commission and pre-sale preparation costs.
Generally, the real estate agent's commission is negotiable and the money spent on marketing is decided by the homeowner. as is the pre-sale preparation cost to get the property up to scratch. Pre-sale preparation implies organising the home, cleaning the garden, performing common repairs and maintenance followed by a paint job. It is almost impossible to estimate the total money spent on these tasks since it depends on the property’s condition. Still, some experts suggest spending $4,000 on a three-bedroom property to enhance its appeal. Marketing costs begin from $5,000, reaching sometimes upwards of $8,000. The included overheads are professional photography, online and offline advertising, signboard, and videography. Legal expenditures can range from $1,500 to $2,000 covering contract preparation, settlement of the property and negotiating with the buyer’s lawyer. In a nutshell, expect to pay for the below estimated costs when selling a home:
Service | Estimated cost |
|---|---|
Renovation | Property dependent |
Real Estate Agent commission | 1 to 2% |
Solicitor charges | $2,000 |
Marketing and advertising | $5,000 to $8,000 |
Auctioneer charges | $1,000 |
Home staging costs | $2,000 to $4,000 |
Shifting or moving costs | $400 to $2,000 |
Mortgage discharge fees (optional) | $3,000+ |
Capital Gains Tax | Subject to capital gains (if any) |
Below are the house selling expenses that are common in all the states:
Service | Estimated cost |
|---|---|
Solicitor or conveyancer fees | $700 to $1,300 |
Lender fees and mortgage discharge fees | $150 to $1,500 |
Home staging and styling | $2,000 to $8,000 |
Auctioneer’s cost (if hired) | $200 to $1,000 |
Commission of a real estate agent in different Australian states are as follows:
Location | Commission |
|---|---|
Victoria | 1.6% to 2.5% in Melbourne and 2.5%- 3.5% in regional areas. |
New South Wales | 1.8% to 2.5% in Sydney and 2.5%- 3.5% in regional areas. |
Queensland | 2.8% |
Western Australia | 2.66% to 3.25% |
Australian Capital Territory | 2.18% |
South Australia | 2% to 2.75% |
Tasmania | 2.96% |
Northern Territory | 2.64% |
Marketing costs for a 45-days campaign in various states are below.
Location | Estimated expense |
|---|---|
Victoria | $500 to $2,000 and around $1,000 for a standard campaign. |
New South Wales | $600 to over $2,000 |
Queensland | $600 to $2,000 |
Western Australia | $400 to $1,000 |
Australian Capital Territory | $1,500 to $3,500 |
South Australia | $500 to $1,000 |
Tasmania | $400 to $800 |
Northern Territory | $600 or over |
To find the estimated cost of selling a house, add all the expected expenses.
Assuming that a home located on the main road in Brisbane is worth $562,847, below is the illustrated expense incurred on its sale.
Add the real estate agent’s commission. Queensland has 1.5%- 3.5% commission rate with an average rate of 2.8%. The average commission will be $15,760.Renovation charges should be $4,000.
Legally transferring the house’s ownership to the buyer will cost $1,300.
To run a 45-days marketing campaign, the owner will be spending $1,500 since the property is on the main road; hence it will require a signboard.
If the owner sells the home through an auction, it will cost $1,000.
Lender fees should be $200.
A staging company will charge $6,000.
The homeowner should be spending $2,000 at most to shift or move from the property.
Add all the estimated expenditures to know how much does it cost to sell a house:
$15,760 + $4,000 + $1,300 + $1,500 + $1,000 + $200 + $6,000 + $2,000 = $31,760.
Suppose the house's sale price > (cost price + expense incurred on selling). Any profit will be a capital gain for the owner, included in his total income. The tax shall be applicable on the total income, and the capital gains tax will be the final expense when selling a house.
Styling
Photography
Floorplanning
Marketing
Signboards
Auction fees
It is essential to clear with the agent the services included in the fees. Opting for an agent with the maximum included services will help eliminate these costs. There is no need to hire separate agencies for styling, marketing, and auction. Some contracts may have hidden fees applicable after the property sale that remains disclosed or undiscussed unless asked. Hence, check the contract for any hidden charges and discuss it with the agent before proceeding.
The real estate agent’s fee structure decides the actual real estate fees, and the structures include a flat fee, fixed-percentage fee and tiered scale fee.
Generally, real estate fees are negotiable and negotiation is highly prevalent. Most agents quote a higher price initially, assuming that the client will negotiate, so get quotes from several real estate agents before proceeding. In a nutshell, any homeowner should expect to pay between 1.6% and 4% in real estate fees.Under the flat fees structure, the agent will quote a fixed amount irrespective of the house value, ideal if the home is large or its sale price is extremely high. Most agents generally charge an upfront flat fee between $4,000 and $10,000 that is non-refundable if the home fails to sell. In the fixed-percentage fees structure, the agents estimate the house rate and quote a fixed-percentage fees that does not include advertising charges. A fixed-percentage fee can range from 1.6% (in Melbourne) to 3.5% (in Victoria and New South Wales regional areas). The agent’s commission under tiered scale fees depends on which tier the home value is estimated. For example, the agents will charge the following commission percentage based on the property value:
Up to $500,000 = 2.5%
$500,000 to $1,000,000 = 2.5%
$1,000,000 + = 3%