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There’s nothing worse than being in the middle of selling your property only to be faced with (expensive) hidden costs you didn’t expect. Between agents fees, marketing costs and conveyancing, selling a home in Victoria can be quite pricey.

To prepare, you’ll need to know what the common expenses are. This article summarises these so you won’t be caught off guard when selling your home.

What Are The Upfront Costs Of Selling Your Property?

Upfront Costs	Price Range
Conveyancing	$800 – $2,000
Marketing	$6,500 – $8,000
Agent Fees	1% – 3% of final sales price OR $4,000 – $10,000

Conveyancing 

Conveyancing refers to the process of transferring the legal ownership of a property from one person to another. This is an unavoidable cost as it is required in every property purchase. You should set aside between $800 – $2,000 for conveyancing fees. 

Marketing 

Marketing your property is a crucial part in selling it. While each marketing campaign is unique, you should be at the very least considering a basic marketing plan. This may include listing it on real estate websites, having a board in front of the property, press advertising and professional photography. 

The average fees for marketing campaigns held in Melbourne in 2020 was between $6,500 – $8,000.

Agent Fees 

Real estate agents typically take a percentage of the final price of the property as part of their fees. However, some agents also charge a flat fee which is agreed upon before the sale. 

Commissions in the form of percentages usually ranges between 1% – 3%, but is influenced by a number of other factors like property value. As for flat fees, the range charged by real estate agents in Australia is between $4,000 – $10,000.

What Are The Hidden Costs Involved?

Hidden Costs	Price Range
Staging	$2,000 and $8,000
Moving	$300 and $10,000 (depends on distance and number of items)
Legal fees	$800 – $2,000
Council rates	Depends the councils annual budget and rateable properties in the area. Reach out to your conveyancer for this.
Bank fees	$100 and $1,500
Capital gains tax	Depends on how much gains are made from your property sale. Reach out to your tax accountant for this.

Staging 

Styling or staging your home refers to dressing it up in preparation for a sale. This can involve redecorating, repairing lighting and fixtures, repainting and cleaning your home.

83% of real estate agents believe that a staged home sells faster and 50% say that staging can increase the property’s value by 1% – 15%. Staging your home can make a big difference to sales process and is considered a worthwhile investment. As the saying goes, you only have one chance to make a first impression. So, it’s best to make it count. 

However, staging costs can be quite expensive, ranging between $2,000 and $8,000.  

Moving 

Moving costs are easily forgotten because this comes after the final settlement is completed. This cost typically depends on the number of items to be moved and the distance between places. But as an estimate, the cost of a move in Australia could be anywhere between $300 and $10,000. 

Legal Fees 

When selling your property, you may need to enlist the help of a conveyancer or solicitor. We’ve discussed what conveyancers do and how much they may cost, but solicitors are a little different. 

Solicitors have broader legal knowledge and can assist with the agreements and legal documents pertinent to the sale. They can handle the complexities of property law in Victoria and ensure that your best interests are protected. The fees for this would range from $800 – $2,000.

Council Rates 

Homeowners are responsible for council fees up until the day of settlement. Calculating council fees can get a little technical as this depends on the councils annual budget and rateable properties in your area. 

Your conveyancer should be able to assist you in finding out how much council fees you’ll need to pay.

Bank Fees 

Banks typically charge an early-exit and mortgage discharge fees for property sellers. This usually costs between $100 and $1,500.

Capital Gains Tax 

Capital gains tax is charged when selling an investment property or if a property is used to generate income. This is included in the seller’s taxable income.

The amount incurred depends on how much gains are made from the sale of the property and costs incurred from owning the property. This is something that your tax accountant can assist you with.

What Costs Can You Save On? And Should You?

Mandatory Costs 

Fees that you won’t be able to avoid include:

• Legal fees
• Council rates
• Bank fees

These are costs that you’re required to pay when selling any property so it’s ideal to set aside some funds for these. 

Optional Costs 

Fees that are optional when selling your property include:

• Marketing expenses
• Staging/styling costs
• Real estate agent fees
• Capital gains tax (CGT)

While these expenses are optional, it does not necessarily mean you should go without them. 

Marketing Expenses

A basic marketing campaign for example is somewhat necessary as you’ll need to inform potential buyers that your home is for sale. However, each listing is unique and you can and should set a budget for how much you’re willing to spend on marketing costs. 

Staging Costs

Staging costs, as we’ve learned, can be one of the best things you can do to prep your home for a sale. While not mandatory, staging a home can increase the value of the property and make the sales process a lot quicker. Similar to a marketing campaign, you should set a realistic budget for how much you can afford to spend on staging expenses to ensure you don’t entirely lose out on its benefits.

Real Estate Agent Fees

Hiring a real estate agent is another optional cost you can consider when selling your home. Most people are too busy with their day jobs and managing a family to be fully committed to selling their home, which is where real estate agents come in handy. To decide, you will have to consider the opportunity cost of selling the property on your own to hiring an agent. 

Capital Gains Tax

There are a couple ways you can minimise paying capital gains tax (CGT)*:

• Own the asset for at least 12 months
• Make the property your main residence
• Sell during a low income year

The first two points above are relatively straightforward. As for the third point, it refers to timing the sale of your property during a low income year so that it lowers your marginal tax rate and reduces your CGT liability. But to do this, you’ll need to plan well ahead. 

*That said, don’t forget to consult your tax advisor for more detailed information. 

Out Of Sight, Out Of Mind? 

The key to ensuring that you don’t get any nasty surprises when you’re selling your property is to stay on top of your expenses from the very beginning. The good news is that after reading this article, these costs are not-so-hidden to you anymore. 

Start off by mapping out what you’ll need to pay for when selling your home and how you intend to fund these expenses. Along the way, you may find ways to minimise certain costs.

Managing the financial aspects of selling your home can be tricky, which is why CT Real Estate is here to help. Our dedicated team of professionals will do their best to save you the time, money and stress involved with all things real estate. 

Selling your home is often a long and stressful process, which is why it’s easy to overlook certain details and make mistakes. These mistakes can end up costing homeowners time and money. But the good news is that they’re avoidable with careful planning and preparation.

We’ve compiled a list of 7 common mistakes homeowners make when selling their home so that you can avoid them. Read on to find out more. 

1. Lack Of Research 

You’ll need to do your homework before jumping into selling your home. Lack of knowledge of your local area, property type and the current market demand could be a huge hindrance to a successful sale. 

For starters, try to answer the following key questions to ensure you’re covering enough of ground:

• What is the demand for your property type and area?
• What is the buyer demographic in your area?
• What’s your competition?
• What valuable selling points does your property or area offer?

Start your search online- looking through reputable websites and at market reports on your suburb. When you are ready, reach out to a professional and experienced agent to gain insights specific to your local area. 

2. Overpricing/Underpricing Your Property 

Overpricing your home could turn away potential buyers while underpricing it could mean a lower profit. Setting an unrealistic price is the most common mistake homeowners make when selling their home. 

You should be setting a legal and realistic price for your home right from the beginning. Setting something too high initially with the intention to lower it later on may not work either since buyers may already be put off. Get a property valuation or appraisal done by a professional to ensure you list your home at a realistic price and start off your selling process on the right foot. 

3. Overlooking Hidden Costs

Selling your home comes at a cost, most of which can easily be overlooked in the beginning. These hidden expenses can quickly add up so it’s important that you factor this into your sales plan. 

Here are some common expenses that you should consider:

Expense	Price Range
Staging expenses	$2,000 and $8,000
Marketing and advertising costs	$6,500 – $8,000
Moving expenses	$300 and $10,000 (depends on distance and number of items)
Legal fees	$800 – $2,000
Capital gains tax	Depends on how much gains are made from your property sale. Reach out to your tax accountant for this.
Council rates	Depends the councils annual budget and rateable properties in the area. Reach out to your conveyancer for this.
Bank fees	$100 and $1,500

4. Letting Emotional Attachment Get In The Way

Selling a home you’ve lived in or owned for many years would likely mean that you have some personal attachment to it. Because of this, many sellers make the mistake of taking negotiations too personally and end up losing out on closing a deal that satisfies all parties.

Throughout the selling process, you will likely receive feedback from buyers that you may not like or agree with. Some owners have taken offence at this, causing their sale to fall through. Remember that not everyone will see your home the way you do. 

At the end of the day, this is a business transaction. Keeping emotions in check would be in your best interest.

5. Using Unprofessional Pictures

Unfortunately, settling for average images is a common mistake most property owners make. We’ve seen everything from blurry phone camera shots to others where the reflection of the owner was caught on camera. These will turn away potential buyers. Keep in mind that more than 90% of homebuyers begin their search online. 

Instead, recognise that you are marketing an asset valued in the hundreds of thousands to millions. A professional photographer will cost you between $150-$200 per hour which is a small investment for a big impact. At the end of the day, presenting your property in its best light, will help you make strong impressions and secure better prices for your house. 

6. Choosing The Wrong Agent/ Not Using One At All

Choosing the right agent is imperative in ensuring that you get the best out of your sale. This means you’ll need someone who is experienced and has knowledge of the local area you’re selling in. 

To choose the right agent, you’ll need to ask plenty of questions to ensure that they know their stuff. Here are a few questions to get started:

• Discuss case studies of other property sales – how did the sale happen and how did they achieve the desired outcome?
• What approach do they think will work best for you? And why?
• Do they have extensive experience with your property type and location?
• What sales method do they recommend for you? And why?

From their responses, you will be able to gauge if they are the right fit for you and your property. If you don’t feel confident, keep asking around till you find the right one. 

Now, not using an agent at all could also be detrimental to your sales process. Carrying the weight of preparing your home pre-sales, finding interested buyers, negotiating and finalising the paperwork are huge tasks. This could lead to unnecessary stress, wasted time and money which could otherwise be avoided by hiring a good agent. 

7. Not Reading The Contract 

When it comes to handling legal matters, remember to read the fine print. It’s easy to want to rush into signing your contract after a long sales process but overlooking key details of your contract can be the worst mistake to make. 

Once you’ve signed the agreement, you are required to comply with all of its terms and conditions. Unknowingly, you could have signed your property away including additional repairs or furnishings. To avoid this, double check everything and go through it with a solicitor before signing anything. 

Bottom Line – Preparation Is Key

If there’s only one thing you take away from this article, remember that mistakes can be avoided when you’re properly prepared. It’s better to take your time understanding what is required from you when you’re about to sell your home before jumping into things too quickly.

Stay on top of your process and make sure that you are fully committed to ensuring a successful sale. And where possible, enlist the help of an experienced agent. 

CT Real Estate’s dedicated team is experienced with the Melbourne CBD and surrounding suburbs. Contact one of our friendly agents today to get the help you require.

Legally, you don’t have to use a real estate agent but most Aussies do anyway. There is no one-size-fits-all solution to this question because it all depends on your preferences and your situation. 

There are benefits to both approaches so consider them carefully. Yes, the thought of doing it on your own can be exciting, especially when you think about saving on agent fees. Having said that, there are reasons why almost everyone uses an agent. Let’s look at some below.

What A Real Estate Agent Can Do For You

Valuation/Appraisal Of Property

A huge part of the sales process is identifying the value of your property. It’s important to get a realistic value to avoid overstating or understating the price. 

Real estate agents usually provide an appraisal of the property for free. Sign up for a free property appraisal with CT Real Estate to get started. However, bear in mind that appraisals have no legal standing. 

Furthermore, you could get a formal valuation by a trained valuer who will consider the following factors to determine the worth of your property:

• Land and dwelling size
• Location
• Connectivity
• Home features
• Building condition

Guidance Through The Sales Process

A real estate agent knows the ins and outs of the property sales process, and will be able to guide you from the pre-sales process right through to the final settlement. If you’re unsure of where to begin once you’ve decided to sell your home, figuring things out on your own can be very time consuming and frustrating. 

A real estate agent can organise the whole process for you and even close the deal quicker. Along the way, they will also be able to provide you with some helpful advice on your sale. 

Marketing Strategy

The successful sale of your property depends on how good your marketing strategy is. This is where a real estate agent can be advantageous. A good agent will have a strong marketing strategy allowing your property to shine in its best light. Their professional network of clients would also mean that they can show off your property to the most interested buyers. 

Additionally, real estate agents would know what mediums are suitable for advertising your property on i.e. online marketing, newspaper ads, signs and flyers. Instead of playing the guessing game with what might work, your agent should advise you on this so you save on time and money. 

Legal Documentation 

A real estate agent would be able to simplify the paperwork process for you so you can focus on other things. The paperwork includes documents such as the written offer, counteroffer and settlement agreement, just to name a few. 

Keeping on top of all of these documents can be overwhelming especially when certain documents have strict deadlines. A real estate agent would be able to keep you in check and ensure that you’re not missing anything.

Benefits Of Hiring An Agent vs. Doing It Yourself

Pros Of Hiring A Real Estate Agent

Save on time  Real estate agents would handle the meticulous details like paperwork, organising inspections from potential buyers, coordinating marketing efforts and managing calls from interested parties.  Having someone in charge of this can save you lots of time so you can focus on other things.

Experienced and insight in your area  Having an agent that is well versed with your area would be a huge advantage when pitching to potential buyers. Interested buyers can ask all types of questions such as the local bus/tram route, number of primary/high schools in the area and highway links.  Having an agent that already knows the area well can potentially make the sales process move faster also. Because of their experience in the area, a local agent would have valuable information like the average market price or trends ready at hand.

Good marketing strategy and negotiation skills  Real estate agents would have the best marketing strategy and negotiation skills to sell a home. They may already have an existing network of potential clients to pitch your property.  Also an agent with years of experience under their belt would have good negotiation skills, which can be helpful in ensuring that you get what you want.

Added value on experience and sale  Having an agent on board puts you in a better position to close the deal at a more attractive price.  Also, you will generally have a smoother experience with a professional there to guide you every step of the way. There is no price tag that can be placed on the peace of mind this will provide you.

 

Pros Of DIY (Doing It Yourself)

Save on agent fees/commision  The main benefit of not using a real estate agent is that you’ll save money on paying for their commission and fees. While this may save you some money, selling your home on your own requires a good business acumen and time.

Direct involvement in the process  Not going with an agent means you have full control over the whole process. This also means that you will get to know your buyers personally and can negotiate with them.  But being directly involved with the sale means you will need to remain impartial about certain things and refrain from being too invested. For example, when pricing your property or negotiating prices, emotions can get in the way and lead to less desired outcomes.

How Do I Decide?

Time

Do you have the time to invest in running the entire sales process of your property on your own? Be realistic about this and consider your day job and other key responsibilities you have. Will you want to give up on those things to work on the sales process? 

If you can’t commit to being fully involved, it’s probably best to consider enlisting the help of a real estate agent. 

Expertise & Negotiation Skills 

Do you have the skills and knowledge required to market your property on your own? Are you able to negotiate the price well? This is a skillset not everyone possesses and could mean the difference between selling at a minimum or maximum profit. 

Consider The Added Value 

Real estate agents provide added value to the process of selling your home. They can handle the meticulous paperwork, finding potential buyers and marketing your property efficiently. 

In addition to this, you will be able to save some time and have peace of mind that a professional is handling your sale for you. 

You will need to consider these services and your own situation to decide whether it’s worth the money to hire a real estate agent.

To Hire A Real Estate Agent Or Not? 

All home sellers will be faced with this decision and it all boils down to how confident you feel handling it entirely on your own. If you feel overwhelmed at the mere thought of the whole sales process and keeping on track with the documentation, perhaps hiring a real estate agent might be the best choice.

If you’re looking for agents you can trust to guide you through the process from A to Z, reach out to CT 房地产公司. With decades of experience in the Melbourne real estate market, CT Real Estate is well equipped to assist you on all aspects of real estate.

If you’re thinking about selling your home there are two main ways to go about it – through private sales or auctions. One may work better than the other depending on several factors.

Below, we’ll go through both methods in detail so that you can figure out which process suits your situation best.

Private Sales

What Is The Process Like?
The private sales method involves advertising the property at a set asking price or a suggested price range. From there, interested buyers put in their offers via the real estate agent or directly through the seller. Once that’s done, the negotiation process begins. The average duration for the negotiation process is a short 1 to 3 days which includes going back and forth on the pricing at most 3 times.

The key difference between a private sale and auction is of course the element of a deadline. With a private sale, buyers and sellers have more liberty to negotiate on the final price; however with an auction, the final deal is determined on the spot.

That said, other factors also contribute to whether it is a good option for you. Below we look at some pros and cons of the private sales method to help you decide.

What Are The Pros And Cons?

 

	PROS
1.	Potentially quicker than auctions. Auction campaigns can take up to 4 weeks to be fully completed, between marketing the property and hosting the auction itself. But if an immediate offer comes up via the private sales method, you can act on it quickly.
2.	Offers more flexibility. There is more control associated with a private sale. Sellers have the liberty of taking their time to carefully consider all offers before selecting their most preferred option. Unlike auctions where there is a rush to sell by a certain time or price, private sellers are not as restricted.
3.	Privacy. If you are a very private person, you might find that the private sales option is more your cup of tea. With auctions, information about your property is laid out in public which can be off putting for some people.

	CONS
1.	Uncertainty of time. Just as private sales can be quicker than auctions, the opposite is also true. Private sales are inherently less structured and there is no guarantee on when your property will be sold. Pricing your property is tricky and if you or your agent get it wrong, this could have a direct impact on how long your property remains on the market. Also, if there are interested buyers, the negotiation process in itself can take up time too. Whereas with an auction, there is no room to go back and forth on the price once the bid has been submitted.
2.	Lack of urgency. Due to the lack of urgency of private sales, potential buyers can spend some time shopping around and considering other options. While this is an advantage from the buyer’s perspective, as a seller this can make the process more drawn out which can also have a direct impact on the final price.

Auctions

What Is The Process Like?

Auctions are more structured than private sales and require a marketing campaign followed by a sale held at a specific date, time and location. A real estate agent will agree upon a reserve price with the seller prior to running the auction. This refers to the lowest price the seller is willing to sell the property for. Bidders must either meet or exceed the reserve price to successfully secure the property.

What Are The Pros And Cons?

	PROS
1.	Has a fixed deadline If you need your property sold by a certain time, auction is the way to go. Prices are usually decided on the day of auction, provided they meet the reserve price.
2.	Creates a sense of urgency Having an auction date builds urgency and competition in interested purchasers. It also means that your marketing efforts are maximised to ensure that you attract the right buyers for the right price.
3.	No cooling off period The highest bidder (after meeting the reserve price) is obligated to buy the property. This makes the process quick and final.

	CONS
1.	No guarantee of successful sale. Not all auctions work out as intended and reserve prices are not always met. As a seller that has chosen to sell your property via an auction, you should already prepare yourself to expect the unexpected.
2.	Property’s market value is decided on the spot. There’s no way of fixing the property value beforehand – this is decided on the spot so you can’t predict what would happen. Auctions tend to be designed for people who are looking to let go of their property at a set date and are not too fussed about the specific details.
3.	Expensive marketing costs. Since auctions require marketing campaigns to advertise the properties beforehand, the costs incurred tend to be higher. However, these efforts play a big role in ensuring that your property has a higher chance of being sold at a better price and so they are considered necessary.

How Should You Decide?

It’s important for you to understand what your goals and expectations are and how the right sales method can help you achieve them.

When it comes to deciding on which method is preferable, use these questions to help you determine your specific needs and what would best meet them.

1.  How quickly do you require the funds?
If you require funds quickly, an auction might be the best choice for you. While planning and executing the auction may take up to 4 weeks, there is a better chance of your home being sold.

It may not close at the price you’re hoping for, but if you are in a rush this might be your best bet.

2. What are the current market conditions? Can you wait to time your sale?
If market conditions look favourable, you might want to consider a private sales option. Private sales would give you better flexibility in deciding when exactly to close the deal, allowing you to take advantage of good market conditions.

3. How important is privacy to you?
Depending on how highly you value privacy, auctions may be out of the question. If you’re uncomfortable with having information about your home being displayed out in the open, a private sales method might be more suitable.

4. How much money are you willing to invest in marketing costs?
Auctions require marketing campaigns to promote the properties beforehand and these costs can really add up. If you’re unwilling to spend a lot on marketing, you might be better off with a private sales option.

Conclusion

Only 20-30% of homes sold in Australia are closed via auctions, indicating that private sales are the most preferred method. However, just because the private sales route is more popular does not mean that it is the best suited method for your particular situation.

Finding the right method, unfortunately, is not as clear cut and there are factors specific to your property type and location that need to be looked at. As always, we recommend speaking to a trusted agent with experience specific to your area for better insights into the sales process.

Need help figuring out how to decide or have any other questions related to the sales process? CT 房地产公司 are experts when it comes to real estate in the Melbourne CBD and surrounding suburbs. Contact one of our friendly agents and put your mind at ease.