No matter the reason for selling your house, there’s money to be made. You may be wondering how much you’ll need to invest to make money from selling your home though.
There are many costs associated with selling a house in Australia. Here’s what you need to be aware of before you get started.
Real Estate Agent Fees
If you decide to sell your home through a real estate agent, you will need to pay a commission. Each real estate agent has their own fees depending on the size, type, and location of your house.
Generally, the commission is a percentage of the house’s price. This percentage varies from 1.6% to 4% of the selling price, depending on the location and the state of the market.
Alternatively, the real estate agent may charge a fixed fee — although this is quite rare. This means that they will quote a commission upfront, regardless of the value of the property. The flat fee varies from $4,000 to $10,000.
Of course, if you’re considering selling with Hauss Realty, please ask us about our fee structure.
You may decide to sell your house on your own. Whether your real estate agent asks you to cover the costs, rolls it into their own fee, or you sell on your own, marketing your property is essential.
No matter how you choose to sell, you will incur some marketing costs, such as:
- Professional photography
- Real estate directory listings
- Local newspaper advertising
- Advertising copywriting
OpenAgent suggests that marketing your property typically costs 0.5% to 1% of your property’s value. So, if you’re selling a unit valued at $400,000, it might cost you between $2,000 and $4,000 in marketing costs.
Mortgage Discharge Fees
Many banks in Australia will require that you pay some money when ending your loan contract. The fee is meant to cover the administration expenses that come with paying out your current loan. On average, most lenders will charge between $250 and $500 to process a discharge request.
Australia’s biggest banks have the following loan discharge fees:
Westpac charges $350.
CBA charges a discharge fee of $350 for the standard variable mortgage loan.
NAB has a discharge fee of $350 that includes preparation of discharge, attending settlement and lodgement of documents.
ANZ has the lowest discharge fee of $160 when you exit or pay your mortgage.
The above prices are listed to give you an idea of the costs. These prices were taken from the relevant banks’ current online collateral and may have changed since this article was published.
Capital Gains Tax
Capital gains or losses tax is a levy on profits, such as the profit you make selling assets such as a house. In Australia, capital gains tax is regarded as a component of your income tax. It is applicable when you sell your house for more than you paid for it originally — making a profit. If you sell your house for less than what you purchased it at, you will have a capital loss.
The capital gains tax is based on your net capital gains. Net capital gain is calculated by subtracting capital losses and applicable discounts from the total capital gains. Currently, Australian homeowners will get a 50% capital gains tax discount when selling a house that they have owned for a year or more.
Conveyancer fees, also called solicitor commission, refers to a payment that covers the statutory and legal process of transferring property ownership. A lawyer will charge a fee for preparing, executing, and lodging multiple legal documents. Australian law requires that only a solicitor or licensed conveyancer can prepare house selling documents.
Conveyancer legal fees depend on the circumstances and unique conditions of your property. First, you will pay the lawyer to investigate and obtain legal information regarding the property.
For instance, they will check the validity of the land titles, legal ownership, and financial data.
Next, the lawyer will ask to be paid to prepare a sales contract and get relevant governmental documentation, such as stamp duty. They will then have to deliver these documents to the relevant authorities.
The conveyancer fee can be a percentage of the money received from the house sale or a flat fee. In addition to the conveyancer fee, you may have to pay the conveyancer for:
- Title, Superseded Title, or Survey Document
- Land tax clearance enquiry
- Pool safety certificate
- Application for a building information certificate
Settlement costs (also referred to as closing costs) are the amount of money that you have to pay to complete the sale of the house. The money is paid when you receive payment for the house and transfer documents to the buyer. Closing fees are typically paid to a third party who facilitates the transaction.
Although both the buyer and seller can pay closing costs, the burden usually falls on the seller.
Home Inspection Fees
Generally, it is the buyer who pays for a house inspection, but the seller can also bear the cost. This fee depends on your property’s size. It costs about $200 to $300 to do an inspection on a small property, $400 to $500 for an average-sized house, and $800 to $1,000 in a metropolitan area. These cost estimates will vary depending on different features on your property or within your home.
Inspection fees are expected to cover a number of activities.
The inspector will also need to document any legal problems and prepare a comprehensive report about the property. In some cases, the house inspector may hire a photographer to take photos of any significant issue.
The housing market value also needs to be determined before it’s sold. This is done by an appraiser, and the cost depends on the complexity of the appraisal process and the home’s location.
The appraiser will photograph the house, estimate the market value, and prepare a report.
Early Exit Fee
You may still be repaying your mortgage when you decide to sell your house. Consequently, you will ask your lender to change the terms of the mortgage. If the lender agrees, they will charge an early exit fee. The early exit fee is a percentage of your pending mortgage balance. It is meant to shield the lender from any losses that may arise due to you exiting the loan early.
Early repayment fees were banned by the Australian Securities and Investments Commission (ASIC) in 2011 for any new mortgages. However, the fee may still be valid for any loans taken before 1st July 2011.
Home Staging Fees
You can stage your house to present it in the best possible light. Staging a house has become popular because it can increase your house’s sale price. Home staging comes with several costs, such as:
- Hiring a cleaner, including carpet cleaning and ceiling cleaning.
- Removing outdated furniture and replacing it with rented upscale furniture.
- Hiring an electrician to inspect all your appliances and repair broken items.
- Buying new appliances to replace outdated ones.
- Painting over your personalised paint with neutral-coloured paint.
- Renovating the floors or installing a new floor.
- Decluttering and removing sentimental items from the house. The removed items can be disposed of or put in a storage unit.
- Buying artificial trees, shrubs, and flowers and adding them to your lawn.
Another effective home staging activity is improving your home’s kerb appeal. As an example, you could update an ageing mailbox or add some decor to the front of your home.
Selling your house at an auction can result in a quicker and more profitable sale. The auctioneer will charge a fee based on the size and location of your house.
Some auction services state that they charge no fees. Instead, they will ask you to name your selling price. If they sell your house at a higher price, they will keep the extra amount.
You may still need to spend some money to attract more buyers to the auction, though. For instance, you can advertise on real estate websites, newspapers, signs, and social media.
Finder and Referral Fees
You may need to hire a professional finder to connect you to a network of real estate agents and potential buyers. Since a finder doesn’t need a real estate licence, their commission will be lower than that of a real estate agent. In addition, you will only pay them after you have completed the transaction and sold the property.
Your workmates, family, friends, or social media followers can refer you to a potential buyer. The fee can be paid as soon as they introduce you to the buyer or after you have completed the sale.
You can also list your property on some of the popular real estate websites. All you have to do is sign up, upload photos of your property, and create a property description. You will typically pay an upfront fee.
Some websites can charge an additional fee if you want to feature your house on their homepage or as the first search result. This means that you will be visible to more potential buyers on the website.
Sell Your House Today
Ready to sell your house? We know the process can be complicated and stressful. The Hauss Realty team takes the stress out of selling your house.
Hauss Realty is a real estate agency in Brisbane. We specialise in helping homeowners find the best price for their houses in the shortest time possible.
Our process is straightforward and there are no hidden charges. Contact us to learn how we can help you to sell your house in Brisbane.