Selling your property isn't always easy. It often takes time, research, and physical work to prepare a home for sale and understand the niche aspects – and costs – involved. 

If you're too caught up in the prospect of an imminent cash windfall, you might overlook the costs of selling, and they could come back to bite you. This guide will help you understand how much it might cost to sell a home and what you can do to sell your property at the best price.

Understanding real estate agent commission costs

Perhaps the biggest cost involved with selling your property is your real estate agent's commission. Real estate agents typically work for a commission – a percentage of the price the property sells for. Though, in some instances, they may work for a flat fee.

Real estate agent commissions generally range from between 1% and 3% of the property's value and can vary depending on where your home is located.

The table below shows the average commission rate in each state and territory:

State/territory Average commission
New South Wales 1.94%
Victoria 1.87%
Queensland 2.57%
Western Australia 2.66%
South Australia 1.91%
Tasmania 2.96%
Australian Capital Territory 1.81%
Northern Territory 2.80%

Source: OpenAgent.com.au

3 tips to help you save on real estate agent commissions

The largest expense that a homeowner will typically incur when selling is their agent's commission. That means it's probably the biggest opportunity to minimise expenses.

1. Try to negotiate with your real estate agent

Almost everything is negotiable in real estate transactions, including the agent's commission.

However, some agents may not be open to negotiation, and if they bring strong skills and a solid network, paying their rate could be worthwhile if you believe they can achieve the best price for your property. While it's important to consider costs, it's just as essential to choose a real estate agent you respect, trust their expertise, and compensate fairly for the work you expect them to do.

2. Provide an incentive

An alternative to negotiating over an agent's commission rate is to offer an extra incentive by setting their commission to a target price, with anything they achieve beyond that attracting a bonus commission.

This works particularly well if you're auctioning your property, you believe your property can achieve more than your agent's appraisal, or you're selling in a hot or rising market. You might find that your agent goes the extra mile to get that additional commission.

3. Look for an agency with a fixed-fee commission.

If you're not comfortable haggling for a more cost-effective commission structure, you might consider listing your property with a real estate agency that offers fixed-fee commissions. That way you'll know how much it will cost you to sell your home with a real estate agent regardless of its eventual sale price.

Advertising your home for sale: What could it cost?

While expensive, marketing is arguably one of the most important things to get right when selling your property. An online listing with a good write-up and professional photos and videos can go a long way in enticing buyers to check out your property.

Advertising your property can set you back around a few hundred to several thousand dollars, depending on the length and type of marketing campaign you and your agent decide to run. A general rule of thumb is that advertising and marketing will set you back around 0.5% to 1% of your property's value, but it's easy to spend more.

Some of the things you might want to pay for include:

  1. Listing on real estate websites
    Ensuring your property is visible on popular real estate websites to reach a wide audience.
  2. Professional photography
    High-quality photos that showcase your property's best features and attract potential buyers.
  3. Video tours of the property
    Creating a detailed video tour to provide potential buyers with an immersive experience.
  4. Drone photos and aerial footage
    Capturing unique aerial views of the property and surrounding areas to highlight its location and appeal.
  5. Street front signage
    Placing eye-catching signage in front of the property to attract local interest.
  6. Print advertising
    Featuring your property in local newspapers or magazines to reach potential buyers who prefer traditional media.
  7. Creating flyers and brochures
    Designing informative flyers or brochures for distribution at open homes or local businesses.
  8. 3D virtual tours
    Providing an interactive 3D virtual tour to allow potential buyers to explore the property remotely.
  9. Email marketing campaigns
    Sending out targeted emails to potential buyers and real estate investors on your agent's mailing list.

The cost of capital gains tax (CGT)

Capital gains tax (CGT) is incurred when you sell an investment property or if the property was used to generate an income. Any profit you make from the sale of such a property is defined as a capital gain and will likely be taxed accordingly. The capital gain is added to your taxable income, reported to the Australian Taxation Office (ATO), and taxed alongside your regular income.

Your Mortgage's capital gains tax calculator can help provide you with an estimate of how much you may need to pay.

Conveyancing costs for property sellers

Conveyancing is the process of transferring ownership of a property from one person to another and is one of the most important steps in selling a home. Conveyancing entails a lot of legal and administrative tasks that require certain knowledge, which is why it's highly recommended that you hire a conveyancer to assist you with this process.

See also: DIY conveyancing: What you need to know

Conveyancing fees typically range from $500 to over $1,500, depending on the complexity of the transaction.

Other costs of selling a home

The costs listed above are just some of many associated with selling a home. Other expenses include:

Council rates and body corporate fees

Up to the day of settlement, you're responsible for any council or body corporate rates related to the property being sold.

Bank or lender fees

Many banks and lenders charge a one-off discharge or settlement fee that covers the cost of paperwork associated with you repaying your mortgage. This fee typically ranges between $150 and $400. If you're taking out a new home loan to buy another home, you might also be up for establishment fees and other costs.

See also: Fees and charges on a home loan: Explained

Property styling

First impressions count when you're selling your home and spending money on property styling can add value – but it can also set you back a bit.

Staging a home for sale can cost around the $5,000 to $10,000 mark, depending on the level of service you choose and how long your property is staged for. However, there are many ways you can make your home more appealing to buyers without breaking the bank.

Renovations and upgrades

You obviously don't have to upgrade or renovate your home before you sell it, but making improvements can add significant value.

If you are looking to renovate your home to increase its value, it is generally advisable that you consult your real estate agent beforehand to make sure you don't overcapitalise. Going overboard with upgrades may cost you more than it increases the value of your property, leaving you in the red.

5 tips to help you sell your property for the best price

Now you know the costs involved in selling a home, it's important to strategise to ensure that you sell your property at the best price. Here are five tips on how you may be able to boost the value of your home during a sale period.

Tip 1: Declutter

A myriad of mementos and furnishings acquired over years can leave a home looking cluttered to a buyer. While we all prefer our homes to be a reflection of us, not everyone has the same taste as we do. You don't want to put people off purely because they don't like your personal style, and buyers can be consciously and subconsciously swayed by such factors. Also, buyers want to be able to imagine living in your home. Fostering an emotional connection can often result in a higher price.

Tip 2: Cosmetic renovations

Strategic cosmetic renovations can significantly boost your sale price without breaking the bank. One of the most effective and affordable changes is a fresh coat of paint. Additionally, consider replacing worn-out carpets, polishing hardwood floors, and fixing cracked tiles to make your property more appealing to buyers.

Tip 3: Select the right agent

Selecting an experienced local agent is crucial. They'll price your home accurately, target the right buyers, and manage open homes and negotiations to drive up offers. Look for an agent with a proven track record and local expertise to maximise your sale price.

Tip 4: Know your target market

Ensure your property is marketed to the right buyer demographic, such as first home buyers, families, or downsizers. A skilled agent will use their knowledge of the local area to present your property effectively and attract the most relevant buyers.

Tip 5: Price your home correctly

Setting the right price from the start is essential. Pricing too high may scare off buyers, while pricing too low could mean missed opportunities. Trust your agent's advice but verify it by researching recent comparable sales in your area to ensure your property is competitively priced.

Article originally published by Gerv Tacadena in 2022. Last updated by Brooke Cooper in 2024.

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