When making the decision to sell, it can be really important to understand what costs are involved when selling your home. Owners often focus more on the potential money coming in rather than what’s going out, however, there are often a number of hidden costs associated with selling a property and in this brief article, we’ve put together a list of typical costs you should consider when making the decision to sell your property.
Marketing & Advertising Costs
A finely tuned and targeted marketing plan will help reach the widest possible, but targeted audience. Most online portals offer free listings, although upgrades are sometimes recommended. You could allow up to 0.1%-0.5% of the home’s value
Professional Photography
Top real estate photography will make the difference between lots of interest and very little. The cost of photography ranges from about $150 up to $1,000 depending on the service provided.
Agent Listing Fees
The fees an agent charges are success fees and only payable once the agent sells your property at a price you agree to sell at. When selecting an agent, we would recommend you should get roughly 3 or 4 appraisals, This will give you an opportunity to interview the agents to see who you feel is the best fit for you.
The commission rates they charge is usually negotiable before you list the property and is usually a percentage of the sale price or it can be an agreed fixed amount regardless of the selling price. Agents fees range from 1% up to around 4.5% of the selling price and are often a combination of mixed rates at set sale price levels. Be careful, as you do get what you pay for. Sometimes, the cheapest agent (on the surface) can end up being the most expensive agent, since they usually lack the necessary negotiation and marketing skills that an experienced agent will have acquired over the years.
Also, be very wary of Agents that pay for expensive advertising campaigns upfront as these are real costs to a real estate company, and you can bet your bottom dollar, they will be very pushy for you to take the first offer (which is unlikely to be your best offer), so they can recover their investment in the advertising.
Last-Minute Tidy-Up Work
Set aside a budget for doing the little fixes that need to be done before open homes to make the house more attractive. Freshening paintwork, fixing anything that’s broken, and getting rid of scratches and dents are things you should turn your attention to.
Land Information Memorandum (LIM)
A LIM report provides a summary of the current property information held by the Council on the day the LIM is produced. It can uncover un-consented work or structures on the property. These costs are generally usually $300-$400
Cross Lease Titles
If you have a cross-lease title and you’ve done alterations to your property’s footprint (plan) and they haven’t been included in the flats plan (the layout plan that accompanies the Title), you could have an issue at selling time. Even if everything has been Council consented, the Title may or may not need to be adjusted to reflect any footprint changes. In the latest Sales & Purchase Agreement, there are new clauses that take into account some cross lease situations, so if you’re unsure, talk to your lawyer if you think this might be your situation.
Cleaning Costs
You’ll need to ensure your property is as clean as possible on the inside as well as the outside. You can obviously do a lot of this yourself to save money, or you may decide to engage the services of house wash companies, and cleaning businesses to spruce up the insides of the home.
Home Staging
First impressions do count. Ensure you de-personalise, and declutter or re-arrange the furniture layout to create more space. Display on-trend cushions, throws, wall prints, and fresh flowers can make the property more inviting to buyers. For empty properties, engaging a professional home staging company may be worth considering. They can fit out a whole house with all the basic items to make it look lived in. They usually charge by the week and prices often start at around $1,000 for a 3 bedroom home. It may even be possible for your photographer to include ‘virtual furniture’ in the photos for a lot less than the real cost of staging.
Moving Services
Make sure you factor in the costs of a moving truck to your new location as well as packing boxes, tape, etc as this can mount up.
Lawyer or Conveyancing Fees
A lawyer or a conveyancer will be required to complete the sale
transaction. They can often provide you with good advice when finalising the sales agreement if there are any tricky clauses in the agreement. Their costs vary depending on whether or not you have a mortgage or two on the home and typically start at $700. Be aware also, that if you do get an agreement on your property and for some reason, this agreement falls over, your lawyer or conveyancer is still likely to charge you for their time.
Auctioneer Services
Selling your house by auction will often involve additional fees to pay beyond the real estate agents’ fees. Good auctioneers worth their salt, operate independently of the Agencies and charge a fee for their service. A top auctioneer will often extract a lot more from a group of buyers than a simple ‘order-taking type Auctioneer’. Auctions are either held on-site (at the property) or in-rooms. Costs vary but are typically around $800-$900 for a quality Auctioneer.
Finance
If you have a mortgage, talk to your Bank beforehand in case there are penalty interest charges and bank costs for reducing or settling your mortgage.
Finally
Before you list your house for sale, it’s important that you take a moment to weigh up all the potential costs involved. Having a realistic mindset will mean there’s less chance of any nasty surprises along the way.