There are all sorts of expenses involved with selling a home, and so pinning down an average can be a challenge.
To give you a better idea of what you’ll need to pay, and how much of your budget will be consumed by this process, read on for a lowdown of the main costs.
1. Agent fees
If you work with a real estate agent to sell your home, then you can expect them to take a commission when the sale is completed.
Commission rates are percentage based, and they will different depending on the agent, the location of the property, and a host of other factors.
There are even stark differences in commission globally, with averages in Australia sitting at 2 percent of the sale price, while in the US they are usually between 5 and 6 percent.
The tricky aspect of commission is that it can depend on how your home is valued and what price is achieved at sale.
A tiered approach, where the agent receives a larger commission as an incentive for selling the property over a given amount, may be used, which will obviously influence total costs.
2. Stamp duty
This is tax you’ll pay to buy a property, and again there are regional variations in the rules which have to be taken into account.
Even if you are looking for display homes for sale, stamp duty will apply in most instances. Costs of between $7,000 and $15,000 must be included in your calculations for this reason.
3. Conveyancing
Getting a professional to take care of the legal side of selling a house is essential, and that’s where conveyancing costs come into play.
A qualified, experienced specialist in this field will streamline the transfer of ownership, and will charge anywhere up to $2,000 for the privilege.
4. Marketing
You can’t sell your home on word of mouth alone, and so marketing is part and parcel of putting it on the market and generating interest from prospective buyers.
Again, there are regional variations in marketing costs, as well as differences depending on the package you pick. Expect to spend anywhere from $2,000 to $10,000, and remember that this will cover elements such as photography, online listing, print media promotion and more.
5. Mortgage
Like stamp duty costs, the considerations regarding mortgage expenses are more to do with buying a new home than selling your existing property. However, fees from your current provider or a new lender will always be involved.
Most significantly, remember that when selling your home you might be required to hand over an early repayment fee, in the case that you pay off your mortgage with the proceeds of the sale ahead of the originally planned schedule.
6. Renovations
This is an optional aspect of preparing your property for the market, but one which could have a big impact on the sale price it achieves.
Whether you decide to revamp an entire room or just paint a few problem areas, minor renovations are an expense worth encompassing in your plans.
Totting up the total
Hopefully you are now in a position to take your own home sale circumstances and apply them to the likely costs you’ll encounter based on where you live, what your circumstances are and what you are looking to achieve with the sale.
For a home sold at $500,000 it’s not unreasonable to expect costs of $20,000 or more to complete this process. So in short, you cannot go into this without a healthy budget, or without realistic expectations about the price you’ll pay as the vendor.
Article Submitted By Community Writer
