By Donie Collins, Director of DMC Property Advisory

The costs of selling a property in Australia are substantial and cannot be determined by one figure alone, especially as there are so many variances which come into play. The charges also differ from state to state and location to location depending on whether the property is based in a major city or a less populated region.

This guide will take you through the many different primary costs of selling a house.

While some of the typical costs such as auctioneer’s fees, home improvements, repairs and home staging expenses may not be entirely necessary, it is worth having money set aside for these added extras in case you decide to go down that route. A small investment, particularly regarding repairs and professional styling, could reap huge rewards.

Whilst we are all aware of the agent’s commission, there are several other costs incurred when selling a property. Depending on your circumstances you may need to budget for:

Real Estate Agent Commission

The real estate commission fee is the most significant single cost you will have to pay when

you sell your house. You will see that real estate agent commissions can vary depending on

the state, location and size of your property.

As agents can set their own rate, it allows you to shop around to find the best deal for your

budget. Don’t forget that the lowest commissions do not necessarily work in your favour,

however. While you may save on fees, you need to ensure that your chosen real estate

agent has a good track record in terms of sales and sales prices. You want a real estate

agent who will work hard on your behalf to get you a reasonable price for your home,

regardless of the fee you will be paying them once the sale has completed.

Conveyancer or Solicitor Fees

As soon as the house is sold, the title of the house must be transferred from one owner to

another. This is done with the assistance of a conveyancer or solicitor.

Like a real estate agent, conveyancing fees will vary depending on the type of services they

offer.

Note that disbursements such as title searches, stamp duty and land tax may be charged

over and above these fees. So, make sure you understand the full extent of the service they

are offering before you agree to their rates.

Marketing Costs

Marketing your house online is one of the most important things you can do to let potential

buyers know that your property is for sale. Specific recommendations on the most

appropriate way to market your house will be given by your real estate agent. Note,

however, unless expressly agreed that the real estate agent will cover any costs, you will

have to pay the fees for all the marketing. In some circumstances, you may find that some

of the costs are included in the real estate commission, while others you will have to pay

over and above the commission rate.

Prices will vary dramatically depending on where your property is located and how

prominently you want your advertisements to be displayed.

As advertising is an essential part of showcasing your home to willing buyers, you may want

to consider the following opportunities:

• Front of house signage

• Newspaper listings

• Printed flyers and brochures

• Online listings

Marketing is especially important if you intend to sell your home or property by auction. As

it is only a one-day event, you will need to market your house extensively to widen your

reach and attract the crowds.

Mortgage Discharge Fee

A mortgage discharge fee is just one of the costs associated with selling a house and will be

payable to your financial institution to close the mortgage. The exact cost will depend on

the type of mortgage you have with your bank or building society (a fixed or variable rate)

and how much you have left on the loan.

Capital Gains Tax

Capital gains tax is a necessity if the property you are selling is not your permanent place of

residence. Any capital gains or losses need to be reported to the Australian Tax Office in

your income tax return so that you can pay tax on any gains. The ATO provides helpful

information on how you can work out your Capital Gains Tax. They advise choosing the

method that will give you the smallest capital gain. Also, be aware of new regulations

surrounding the ATO clearance certificate for capital gains tax and how they affect you.

Renovations and Repairs

Renovating or fixing up some minor damage to your property is a personal choice, and it will

depend a lot on time and money. However, if there is a chance that you may recoup your

costs in the sale price, it is definitely worth considering. While every house is different, is it

worth keeping some money in the kitty for minor repairs.

Home Staging Expenses

Home staging may or may not be necessary. The better your house looks, the more

appealing it will be to potential buyers. Consultations are provided by a professional home

staging company at which point you can discuss prices and ideas.

Moving Costs

Don’t forget to take into account your moving costs if the property you are selling is your

primary residence. You will need to consider the charges for the transportation of your

belongings once your house is sold if you are not planning to do it all yourself.

Donie Collins

DMC Property Advisory

0405 958 597

dcollins@dmcproperty.com.au

www.dmcproperty.com.au