When buying a property in Canberra, you know you have a few additional expenses such as building inspections or a pest control assessment, but it is very easy to forget that there are additional expenses when selling a property too.
Ensuring your budget for these is important, here are seven expenses when selling that may otherwise catch you out:
1. Agent Commission
While they vary depending on many factors, including the state your property is in, the type of property and so on, agent fees are a significant cost when selling a property. They come in two flavours, fixed-rate or tiered rate.
A fixed-rate is an agreed percentage of the final sale price, whatever that price may be. Tiered rate offers a variable percentage fee, depending on the final price of the sale.
2. Legal Fees
Yes, even when selling, you need a conveyancer or solicitor to handle the legal process. You should always set aside somewhere around $1000 to cover those during the sale.
3. Advertising and Marketing Costs
Depending on the agreement you have with your agent, you may need to fund the advertising and marketing costs separately from the sales commission. This can be a high cost of several thousand dollars and something to prepare for beforehand.
4. Property Preparation
You want the property to look its best to get the most money for it and sell it quickly. This can be remedial work to fix problems, redecorating or using a stylist to stage the home, even all three. Whatever you choose to do, it is an expense, so remember to include your planned preparation costs in any 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 $400 - $500 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 of around $1000 is a good guide.
7. Moving Costs
Once you sell a property, 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 $1000 should cover most cases with some to spare.
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.