Minimise the costs involved in selling your home to ensure the entire process runs as smoothly as possible.
Selling a home can be expensive, and an increasing number of people are choosing to sell their homes without the help of a real estate agent. This can enable them to save some money and to make sure they’re being charged the right fees.
The money saved comes in the form of real estate agent fees. Even if you have to pay to get your home listed on popular websites, this fee is considerably lower in comparison to real estate agent commissions.
Real estate agent fees are not the only costs you have to worry about when selling your home. There are costs your lender might charge for leaving your home loan and finally there are other fees such as government charges and removalist costs.
While some of these costs are nominal, others are not and using a property selling calculator allows you to estimate just how much selling your home will actually set you back.
The property selling calculator below allows you to enter in all of these fees to find out if you can afford to sell your home or to identify which areas you can save in, especially if you decide to sell your property without the help of a real estate agent.
How to use the property selling costs calculator
Using the property selling calculator is straightforward. It requires you to enter in certain information related to the selling of your home, including:
- Sale price of property. This is how much you expect your home to sell for. It’s best if you stick to its estimated market value, not what you hope to sell it for.
Agent commission. Real estate agent commissions vary from state to state, and are calculated as a percentage of the property's sale price. LocalAgentFinder puts the average commission at the following:
- New South Wales: 2.11%
- Victoria: 2.13%
- Queensland: 2.47%
- ACT: 2.18%
- Western Australia: 2.45%
- South Australia: 2.07%
- Tasmania: 3.26%
- Northern Territory: 2.68%
- Lender fees. If you're paying your loan off ahead of time, your lender might charge you a prepayment penalty or an early exit fee. This varies from loan to loan. In addition, just about all home loans attract settlement fees that lenders charge to take care of administrative costs. Expect settlement fees to run you between $150 and $400.
- Conveyancing and/or solicitor fees. Selling a home entails a fair amount of legal paperwork, so hiring a lawyer to help you through this simplifies matters considerably. Lawyers don't work for free, though. LocalAgentFinder puts the average cost of conveyancing between $500 and $1,000.
- Removal costs. These costs refer to the money you'll have to spend to get all your belongings out of the home. You can save some money by doing this on your own, perhaps with help from friends and family. If you do choose to hire removalists, the cost will vary depending on where you're moving from and to. For example, Sydney removalists run around $125-150 per hour. You can expect removal for an average two-bedroom home to take about four to six hours.
- Repairs and presentation. These costs can vary significantly depending on the existing condition of your home and what you expect to accomplish. When preparing a home for sale, make sure you don't spend more than what's absolutely required because you might not be able to capitalise on extensive makeovers.
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Rob's home selling saga
Rob wishes to sell his home that, according to market conditions, could sell for around $750,000. He still has to repay $325,000 to his lender and starts off thinking that the sale could leave him $425,000 richer, but he soon learns about the different costs associated with selling a home.
The first real estate agent he contacted said he'd charge a fee of three per cent, which stood at around $22,500. A second agent mentioned he'd provide his services for a two per cent commission, bringing the dollar value down to around $15,000, a saving of $7,500. Once people at Robert's workplace found out he wanted to sell his home, a co-worker told him he could save even more if he chose to sell his home on his own. A little research led him to popular Australian home listing website and he registered with two for under $1,500.
Next, he figured he could attract more buyers by giving his home a slight makeover, so he spent around $15,000 doing so. Despite the fact that he eventually repaid his loan two years ahead of time, his bank did not charge him any prepayment penalty, although he did pay a loan settlement fee of $400. His lawyer charged $1,200 for his services, while removal costs came in at just under $1,200.
By the end of it all, the total costs linked with selling his home totalled around $19,500. If Robert had decided to use the services of a real estate agent, he’d have ended up spending about $15,000 more. Obviously this example is simplified. Some real estate agents would’ve been able to get Robert more than $750,000. Be sure to compare your options before opting to sell your home by yourself.
FAQs about the property selling costs calculator
Can I not limit my online listings to websites that offer free listings?
Yes, you can, but what you have to bear in mind is that the online world is rife with competition. A website that enables you to post free ads might not have effective outreach, or might not focus entirely on the real estate market. Besides, when you list with a good online real estate website, you also get access to a host of relevant resource material and professional help.
If I hire a real estate agent, do I have to pay anything other than the commission?
Yes, there's a good chance you might have to bear added expenses in the form of advertising costs and auction costs.
Is it necessary that I prepare my home for sale?
Initial appearances can make a noticeable impact on prospective home buyers. You’ll need to consider tidying up your home so it looks appealing, but remember that spending too much might not be fruitful.
Not many homeowners realise that they can bring down property selling costs if they choose to use the online world to sell their homes. List your homes on a couple of good real estate websites, but make sure you compare a few of these sites before choosing any because their packages tend to vary.