Selling your home comes with multiple costs you've probably never considered. But when the time comes, having a clear picture of all your selling costs helps you budget correctly and stay organised during one of the most exciting but stressful things you'll ever do.
Let's start with the obvious costs and then look at the hidden costs.
The selling costs you (probably) can't avoid.
Real estate commission.
The real estate agent takes a commission of your final sales price, typically around 2% or slightly higher. Although 2% may not sound like a lot, it works out to a lot of money.
Let's say you sold your home for $700,000. A 2% commission would be $14,000. In other words, you only end up with $686,000 in the bank.
There's nothing stopping you from going DIY and selling your property on your own. There are plenty of websites that can help you do it, but it's time consuming and far from easy. It might also give you a new appreciation for realtors.
You have to pay a lawyer to handle your paperwork. This can set you back one or two thousand dollars. But having the paperwork handled legally is too important to forget.
There are DIY conveyancing kits available, but that's considered a risky option.
When buying property, the government hits you with a tax called stamp duty. This won't affect you as a seller, but you will need to pay it if you're buying another property. Stamp duty can cost tens of thousands of dollars, so be sure to factor it in.
The extra, hidden costs.
But all those costs are just the beginning. Here are more costs to factor in. Most of these are optional to some degree, but they do make the selling process easier.
Those beautiful, stylised and probably photoshopped images on property websites aren't free. While optional, getting good quality photographs to show off your property in the best light will help it stand out.
"Home staging" or styling is becoming increasingly popular and involves giving your whole place a temporary makeover for the camera – but it will cost you.
If you choose to sell at auction, then the loud man with the hammer needs his fee. What does the auctioneer cost? OpenAgent suggests anywhere from free (paid by the agent commission) to up to $1000.
Repairs and cleaning.
This is another "optional but not really" cost. Before moving house, you really need to get your property in clean working order and in excellent condition. This should add value to your home or at least help you sell it at a fair price.
People often forget to factor this in, but a removalist can cost you more than a thousand dollars if you have a large house and lots of stuff.
Mortgage discharge fees.
Your lender may hit you with a fee for leaving your loan, especially if selling your property means paying off the loan earlier. These fees typically range from $150 to $450.
There are many costs that come with selling a property and many can't be avoided. But paying some of these costs will make the whole process easier and may even add value to your property.
Buying a home can also come with a lot of extra costs, learn more about them here.