The Hidden Costs of Selling Your Home
Agent’s fees and insurance are not the end-all be-all of the expenses when you sell your home. There are still other things you need money for, but most of the times, they are not readily apparent. Here are some of the hidden costs you need to watch out for
- Stamp Duty. This is the amount you pay upon settlement for the transfer of your property. Usually, this is the largest expense and amounts to approximately four to five per cent of the property’s purchase price. For an accurate figure, check with your state revenue department.
- Legal help. You need someone with legal knowledge to help in selling your property. Whether you choose to hire a solicitor or a conveyancer, prepare money for their fees. A conveyancer’s fees usually cost several thousands of dollars, while a solicitor’s will cost even more. The difference: conveyancers specialize in real estate law, while solicitors could help in other areas of law as well, such as taxation or other legal factors that may affect a sale like a divorce.
- Marketing. Aside from the obvious agent fees, you need to prepare for marketing costs. Even though it may not be as costly as before, due to the boom of social media, you still need to spend money for marketing materials, such as photos, videos, and floor plan drawings. The amount depends on how flashy you want the marketing to be. Don’t worry, however, because this is usually taken out from the final sale price.
- Capital gains tax. Capital gains tax is what you pay when you profit on the sale of your property. All real estate/ property assets you’ve acquired since capital gains tax (CGT) started (on 20 September 1985) are subject to CGT You can compute your capital gains tax through the help of CGT calculator such as this.
- Home loan discharge fees. This is also known as termination or settlement fee. This is paid when you finish paying the balance of a loan. If you’re need to exit early from a loan, you may need to pay an early discharge fee or a break free. This is to cover the lender’s legal costs.
- Building and pest inspections. You should get building and pest inspections before putting in an offer or bidding in at an auction. This could ensure that your home is in a good condition and gives you time to do repairs before really selling it.
- Getting your home ready. You need to prepare your home before selling--it needs to be appealing to prospective buyers. Since you may be busy with your work and other things, you might need to hire people to do it for you. Here are some things you need to prepare:
- Repairs. You need to check the electrical wiring, plumbing, roofing, and other parts of the house for repairs. Buyers want to see a home that is well-taken care of.
- Renovations. You might want to renovate to enhance your home’s appearance. However, renovations may not get you the maximum return on investment so you need to only choose the parts of the house that needs it. You might spend more than you can get from the sale.
- Landscaping. Curb appeal is important. If they see a neglected front yard, they might not even come inside.
- Cleaning. Decluttering is easy enough to do, but deep cleaning takes time and a lot of effort.
- Home styling. You might need a professional property stylist for your home to look aesthetically pleasing to the prospective buyers.
Watch out for these hidden costs and prepare your wallet. It would be ideal if you could save some money beforehand, so that you won’t be scrambling for it when you sorely need it. If you want some more advice about property investments or anything property related, please get in touch with me at 0402 909 727
