Costs Involved in Selling Your Home
If your home is estimated to be worth $400,000, for example, an agency may negotiate a commission of 2.5 per cent of the overall sale price, plus a 5 per cent variable commission, for any amount it achieves over $400,000.
Assuming your property sells for $440,000 (about the median value for a house in Melbourne), the agency would receive an $11,000 initial commission and a $2000 variable commission.
What is negotiated will usually depend on agency competition in the area and should be formalised in writing during the interview process with agents, along with any additional extras, such as professional photography.
According to Melbourne real estate agency Woodards, average commissions in suburbs more than 10 kilometres from the city rise to about 3 per cent of the house’s sale price.
Agents will typically not charge their fee until after your property has sold, which may be months after a campaign starts, and will usually withdraw their commissions from any deposit paid by a buyer.
Advertising is a separate cost. A full media campaign is typically between 1 per cent and 1.5 per cent of the property’s value and will cover costs associated with a For Saleboard, copywriting, online listings and print advertising, including in local newspapers.
A basic internet-only campaign, which includes photographs, a floor plan and online listing on several websites, costs about $500 to $600, according to Woodards.
Some vendors pay for building inspections to be carried out on their properties, which they make available to prospective buyers, saving them the hassle and cost. These can vary from between a few hundred dollars to a few thousand.
Vendors should also expect to pay at least $1000 for legal costs, including preparing the Vendor Statement, an auction contract (if the property is being sold by auction) and any amendments required to the title.
The government will not charge capital gains tax provided the house being sold is your primary place of residence.
However, the controversial home loan exit fee which may be paid if the property is mortgaged and the home loan balance is paid early can be up to several thousand dollars. The leading banks usually charge an exit fee of between $500 and $1000.
