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Most people know that buying a home is expensive, but they’re shocked to learn that selling a home can be costly, too. It takes some planning to avoid having your profits undercut by fees you didn’t expect. Here are the costs the average homeowner incurs when preparing to sell a home.
REPAIRS TO YOUR HOUSE
Homebuyers want homes in tip-top shape; that’s a given. That means that you must make any needed repairs you may have been neglecting in order to make your house appealing to buyers. Major problems like a roof in need of repair, leaks and faulty electrical wiring should be remedied before putting your house up for sale. Depending on the extent of repairs needed, this could become quite expensive. A great way to freshen up a home without doing anything drastic is to put up a fresh coat of paint in a few rooms. Keep the colours neutral so as not to turn away buyers.
ADVERTISING AND MARKETING
When working with an agent, you may or may not be required to cover the fees for advertising and marketing. Agents typically use a combination of traditional marketing methods (brochures, newspapers, flyers and signboards) and digital media (listings on the agent’s site or with third party sites). Agents may also use professional photography and videography services as well as copywriters to market your home. With Vendor Paid Advertising (VPA), the agent covers the fees to market the property. It is best to ask the agent upfront who will be responsible for marketing costs. If you are expected to cover all advertisements, you may be able to negotiate a lower commission.
AGENT COMMISSIONS AND FEES
In Australia, agent fees and commissions vary by state. In most cases, the commission is a percentage of the home’s sale price. State percentages range from 2.05 percent – 3.25 percent, with a national average of 2.26 percent. Fees are lowest in South Australia and highest in Tasmania. In Sydney, commission averages to 2.07 percent. That means if your house sells for $550,000 (the average cost of a home in Sydney), the commission would be 1,385. Some agents offer fixed rate commissions which eliminate the guess work of what you owe the agent, but may not get you the best price for your house. Tiered commissions are also becoming popular where the agent charges a lesser commission up to a certain amount (say, $500,000) and a larger commission on anything above that. You may have been told that it’s difficult to sell a home without an agent, but that’s simply not the case. Services like ForSaleForLease.com provide the expertise of an agent without the costly commissions and added fees. With their Residential Property package, you can either pay monthly for their services or a once-off payment of $695. This fee includes signage and digital advertising across several leading real estate websites, and it’s only a fraction of the price you’d pay an agent in commission.
SOLICITOR/CONVEYANCER
To ensure a smooth transfer of ownership from one person to another, most people hire a Solicitor or Conveyancer to conduct thorough searches on the property’s title. Services cost anywhere from $500 – $2000000, with higher costs in areas where the services of a Solicitor or Conveyancer are required in property transactions.
MOVING FROM ONE PLACE TO ANOTHER
If you haven’t moved in a while, you may be shocked to find out how much moving services cost now. Even if you do it yourself, you may incur fuel costs, moving truck rentals and time away from work. Compare the costs of hiring someone versus doing it yourself to see which is more practical for your situation. If you are downsizing, keep in mind the added costs of storage to stow away all your belongings that won’t fit.
The more prepared you are, the fewer expenses you will incur when selling your home. Think carefully about what you’re willing to pay someone else to do and what you’d rather save money on by doing it yourself.
