The Costs of Selling Your Home

For many sellers, the largest selling cost is the real estate agent’s commission. This is usually calculated as a percentage of the final sale price, although some agents may charge a fixed fee or a tiered commission.

As a rough guide, you might budget around 1.5%–3% of the sale price, depending on where you live, the property and the agent you choose.

For example, on a $1 million sale, a 2% commission would be $20,000, before considering whether GST or other charges apply.

Commission rates and fees are negotiable, so always ask the agent to provide a clear breakdown of exactly what you will pay. In NSW, for example, the agency agreement must set out the agent’s fees, commission and other expenses and you can negotiate the terms.

Your agent may recommend a marketing campaign to promote your property. This can include online property listings, professional photography, floor plans, brochures, social media advertising, signage and, if applicable, auction costs.

A typical marketing budget might be $2,000–$6,000 or more, depending on the property and campaign.

Ask your agent for an itemised marketing proposal and check exactly what is included. Don’t assume that marketing is covered by the agent’s commission — it is often charged separately. In NSW, advertising and auctioneer fees can be charged if they are included in the agency agreement.

You will generally need a solicitor or conveyancer to prepare the contract of sale and handle the legal side of the transaction.

As a broad guide, allow around $1,000–$3,000+ for professional fees and associated costs, depending on your circumstances and location.

There may also be additional disbursements, such as title searches, certificates and registration fees. Ask for an itemised estimate before engaging your solicitor or conveyancer. In NSW, a contract of sale must be prepared by a lawyer or licensed conveyancer before a property is advertised.

Getting your home ready for sale can involve anything from a simple clean to professional styling and repairs.

You might spend money on:

• Cleaning
• Gardening and landscaping
• Minor repairs and maintenance
• Painting
• Rubbish and furniture removal
• Professional home styling or staging
• Storage

The cost could range from a few hundred dollars for basic preparation to several thousand dollars or more if significant work or styling is required.

The important thing is to consider which improvements are likely to make a meaningful difference to the presentation of your property before spending money.

If you have a mortgage, the outstanding loan will normally be paid from the sale proceeds at settlement.

You may also have additional costs associated with ending or refinancing your loan. Depending on your mortgage, these could include discharge fees, fixed-rate break costs or other lender charges.

Ask your lender for a loan payout figure before you sell so you know exactly how much will need to be paid from the proceeds.

For many people selling their main home, Capital Gains Tax (CGT) won’t apply because of the main residence exemption.

However, CGT can be relevant if the property has been used as an investment, rented out, used to produce income, or has other circumstances that affect your eligibility for an exemption.

CGT rules can be complex, so if you are unsure, speak with your accountant or tax adviser before selling. The amount of tax payable, if any, will depend on your individual circumstances.

Depending on your property and circumstances, you may also need to budget for:

• Pool compliance or other required certificates
• Building or pest inspections
• Strata or owners corporation information
• Mortgage discharge fees
• Moving costs
• Temporary storage
• Utilities and rates during the selling period
• Repairs or maintenance requested as part of the sale process

Not every seller will have all of these costs.

Imagine you sell your home for $1,000,000. Your estimated selling costs might look something like this:

In this example, your estimated proceeds before paying off your mortgage would be $970,000.

This is only an example. Your actual costs could be significantly higher or lower depending on your property, location, agent, marketing campaign and personal circumstances.

Before putting your home on the market, try to work out your estimated net proceeds.

This is the amount you expect to have left after paying your selling costs and repaying any outstanding mortgage or other secured debt.

Knowing this number can help you make informed decisions about your next move and avoid surprises when the sale settles.