You might not realise all of the expenses that are all just a part of selling your property. Ensuring you budget for these is important. Here are seven expenses when selling that may otherwise catch you out:
1. Agent Commission
While this varies depending on many factors, agent fees are a significant cost when selling a property. They can be structured in multiple ways. The commission range you should consider factoring into your budget could be as low as 1% up to 4.5% of the selling price of your property.
2. Legal Fees
Yes, when selling, you need a conveyancer or solicitor to handle the legal process. You should always set aside somewhere around $1,500-$1,800 to cover these costs during the sale.
3. Advertising and Marketing Costs
Typically advertising spend is a cost to you on top of the agents commission. In Canberra, marketing packages can range from $2,000 - $8,000. The agents recommendation will largely depend on the market, which includes competing properties for sale at the same time as yours. Property location and property features are also a factor. For an average Canberra property, you should allow for about $3,000.
4. Property Preparation
You want the property to look its best to get the most money for it and to sell it as quickly as possible. This can be remedial work to fix problems, redecorating or using a stylist to stage the home, even all three. For a property that doesn’t have any major and obvious issues but just needs a pre-market tidy up, you should budget for around $500-$800. To have a stylist stage your home you’d be looking at a range of $2,500 - $5,500 depending on the size of the property and the furniture required.
Whatever you choose to do, it is an expense, so remember to include your planned preparation costs in your budget for selling.
5. Auctioneer Fees
If you sell the property by auction, in addition to other sales costs, you will also have auctioneer fees to pay. These are usually in the $500 – $600 range.
6. Mortgage Discharge Fee
If there is an outstanding mortgage on the property you are selling, your bank will charge a fee to discharge the mortgage when it is paid off. How much depends on the loan terms, including how early it is being paid off and the amount outstanding. However a fee could be anywhere from $300 - $1,000 as a guide.
7. Moving Costs
Once you sell a property, if it’s not an investment you usually have to move out of it, and that brings another cost. Moving company charges vary a little from state to state and the size of the property, but $1,000 should cover most cases.
If you are not moving into a new property immediately for any reason, don’t forget to add the cost of storage too.
Altogether, these costs can reach between $15,000 and $20,000 including agent fees, so always plan for this in your budgeting when selling a property.