The cost of selling a house can be an expensive exercise. It’s a big move so make sure you have the information you need to get it right! It usually brings the welcome prospect of producing a large sum (your equity) but the process also usually involves a range of expenses. You do need to keep a lid on these costs and also know where you’re getting real value for your money.
Here is a summary of the items related to the cost of selling a house &/or property:
• Real Estate Agent Fees
• Presentation (Staging, De-cluttering, Repairs, Cleaning etc.)
• Legal Fees for putting together your documentation. (i.e. Contract for Sale & Section 32 – in Victoria).
Real Estate Agent Fees (in the cost of selling a house):
Typically, there are two elements involved. Commission and Marketing costs.
The commission is for the agent’s time and labour and the marketing element are the tools used for publicizing the sale and attracting potential buyers. The commission fee can vary and is negotiable. Real Estate Agents generally place an average economic cost per property sale anywhere between $10,000 to $15,000. So a lower priced home has a larger commission fee proportionately, than a higher priced home. And a higher priced home has a lesser commission associated, proportionately, than a lower priced home. However as a rule of thumb agents won’t go less than 1% of the overall home value.
Marketing is a separate cost component and pays for items like newspaper advertising, signage, on-line advertising, flyer printing and publicising the auction. A usual budget a real estate agent would push for would be approximately 1% of the asking price. For example $4000, on a $400,000 property. Time of payment can be negotiated, i.e. paid upfront, by installments, or after the sale and come from the settlement funds.
Presentation (in the cost of selling a house):
Firstly some repairs may be needed to enhance the home. It may benefit from thorough cleaning – carpets, walls, tiling, etc. The freshen-up may involve painting, because fresh looking walls and surfaces add appeal to the house. It may involve grooming or landscaping the garden.
Removing clutter from inside the home is important so you may need to hire some short-term furniture storage. You also may need to rent or buy some new furniture to give the house a bit more “wow” factor or style. All those images you see of stylish looking homes and apartments for sale on the Internet or in magazines often have similar looking attractive furniture – this is because it has been supplied for the photo shoot or rented for the pre-sale inspection period. You may need a professional’s advice on which areas will benefit most from attention, how far to go and the best ways to organise it.
Legal fees (in the cost of selling a house):
If you include disbursements (i.e. Settlement fees, Folio & Title searches, Land Information, Land Tax, Water & any Owners Corporation Certificates, Sundries and Document storage archiving etc.) costs will vary between $1000 and $1400. Excluding disbursements Professional Fees alone vary between $700 and $1000.
In summary, commission fees can vary a bit between agents, and be partly negotiable. The cost of the advertising spend can vary also, depending on the agents’ recommendations – however these can always be questionable. And the amount you invest to get the presentation right is up to you, however be wary not to over capitalize.
Again it comes back to the 4P’s Presentation, Promotion (Advertising) & Professionalism (the way the sale is handled by the selling agent) & Price (the right pricing strategy).
Choosing the best agent from your local community for your particular home sale is important, because it’s not always an obvious choice. Then, evaluating and navigating through the cost of selling a house to make sure you are getting real value for money with each element, are examples of how Vendor Marketing – Melbourne’s most qualified vendor advocates, can assist you with the cost of selling a house.
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4. Effective Property Marketing – how we create a winning property marketing strategy
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