When you sell your house, 6 costs are in your control. Getting the balance of these costs right will ultimately impact how much money lands in your bank account, once your home is sold.
First impressions create lasting impressions. That’s why your home needs to be presented at its best.
Easy, inexpensive ways to make your home more appealing are:
– Tidy up your garden for that all important curb appeal
– Clear out the clutter to create a sense of calm
– Remove personal items like family photos, so buyers can picture themselves living there
– Style your home to maximize the space.
You might decide to invest in maintenance jobs or alterations. When you take care of those jobs, prospective buyers won’t feel overwhelmed by the tasks they will need to do. It’s an easier transition for them, and makes your house more saleable.
A good agent will refer you to trusted service providers such as gardeners, tradesmen and home presentation companies. Your agent should work closely with you, to ensure that what you plan to spend will be adding value to the sale. That’s because you may need to spend between hundreds to tens of thousands of dollars for a complete makeover. It really depends on what needs to be done so that your home is presented appropriately for your prospective buyers.
Cost: Between $100 to $10,000 or more.
Promoting your home so that it will attract buyers relies heavily on a slick marketing campaign. After all, marketing is what sells the dream of owning the home.
Your agent should offer a range of marketing tactics including:
- High quality photography
- Persuasive copywriting
- Easy to read floorplan
- Listing on major websites, including a premier listing on realestate.com.au
- Easy to read sign boards
- Attractive brochures
- Quality property videos
- 3D virtual tours
- Engaging social media
Marketing needs to be considered an investment. If you scrimp on to save money, it could be detrimental to your final sale price. Remember too, marketing costs are frequently recovered during the auction within one or two bids.
You only get one chance to market your home and attract buyers. That’s why a good agent should encourage you to invest in marketing, and give your home the best possible chance.
Cost: Between $2,000 to $10,000 or more.
3. Pricing of property
The most important cost is the price of your home. You’ll want to receive a fair price for your home. Here’s what can happen if it’s priced incorrectly.
Pricing too high
If you aim for the top price, rather than a fair price, it can be risky. Especially if paired with the ‘willing to negotiate’ mindset. And I’ve seen it happen before:
- Savvy buyers view the home, quickly realise it is overpriced and move on.
- Other buyers decide the home is out of their budget, and won’t bother viewing the home. And those are often the ideal buyers, the ones who would fall in love with the property.
For both groups of buyers, the price was wrong.
When you price your home too high, the right buyers aren’t attracted to the home. Often, this leads to multiple price drops until the home is sold for a low price. Sometimes the home is taken off the market completely as buyers perceive it as ‘stale.’
Pricing too low
You may miss out on income if you price your house too low. Even if you want to sell your home quickly, a low price is a poor strategy.
An experienced agent will explain the property market in your area and how your home compares. They will guide you towards the ideal price for your home. And if it’s priced right, it has a greater chance to sell.
4. Agent selection
You need to consider which agent (person) rather than the agency (business) will sell your home. Ultimately it’s the agent who is representing you during the sale.
Research and contact agents directly. If you call the agency, you may not have control as to who your property is assigned to.
Choose an agent who excels, has a proven track record and doesn’t cut corners. If you don’t choose the right agent wisely, it will reflect on your sale price – and that’s the real cost of an agent.
5. Real estate commission fees
When your house is sold, the agent will receive a slice of the income – known as real estate commission fees. It’s typically a percentage of the final sale price, and it can vary significantly.
Agents discuss their commission fees with you during initial meetings, along with how much they think your home will sell for and marketing costs. Here’s how these costs can vary and impact on the net result:
Agent 1: Cheapest Agent (poor negotiator)
Sells your home for $1,000,000
Commission fees 1.1%: $11,000
Marketing costs: $5,000
Total costs: $16,000
Net result: $984,000
Agent 2: Sells your home for $1,050,000
Commission fee 1.65%: $17,325
Marketing costs: $7,500
Total costs: $24,825
Net result: $1,025,175
Agent 3: Best Agent (great negotiator)
Sells your home for $1,100,000
Commission fee 2.2%: $24,200
Marketing costs: $10,000
Total costs: $34,200
Net result: $1,065,000
If you were to appoint Agent 1, with the lowest commission fees, you could end up with close to 10% less on the final price compared to Agent 3.
Your home is likely to be your greatest asset. So assigning your home to the agent with the cheapest commission fees may not necessarily be the best strategy. Consider this, if you needed lifesaving surgery – would you select the cheapest surgeon or the best?
6. Other costs
The sale of your home will attract legal fees. A conveyancer or solicitor will prepare a contract of sale and section 32 vendor statement.
Costs: Up to $2,000 for the legal documents, plus any other disbursements.
If you sell an investment property, your accountant will advise about any potential tax that you may need to pay.
There are costs when selling a house. The good news is, as a home owner – you have control over those costs. An experienced real estate agent will help you navigate through those costs. Leveraging costs will impact the amount of the money that lands in your bank account once your house is sold.
Thinking about selling your home? Get in touch with me to find out how I can help you sell your home while keeping the giving you control of the costs.