Monday, September 21, 2009

Cost of selling a house in Australia

I am just reproducing here the information I gleaned from last weekend's Domain, published by The Age newspaper. The cost of selling a house is not something to be taken lightly. Take as an example a house that is worth $400k and eventually sells for $440k. Here's a typical breakdown:

1. Real estate agent's commission: 2.5% of $440k = $11k
2. Variable commission: 5% for amount over $400k = $2k
(note: that's a whopping 7.5% in total for the $40k "extra")
3. Advertising cost: 1.5% (for signboard, online listing, print ads, etc) = $6.6k
4. Building inspection (if required) = $1k (say)
5. Legal costs (vendor statement, auction contract, etc) = $1k (at least)
6. Exit fee from bank for outstanding mortgage = $1k (say)

Total = $22.6k, which works out to 5.1% of $440k. In addition, if you buy another house to replace this, expect to pay about 5% in stamp duty. That makes a grand total of roughly 10%, excluding moving costs and the cost of hiring temporary props to make the house look more attractive to the buyer.

The bottomline: everything above is negotiable; but not after you have signed any papers. So negotiate first!! Don't be fooled into thinking that the rates are non-negotiable.

1 comment:

Malvin said...

when selling a house minimum is 20% from the total cost paid as break event....there are many hidden cost...in physical infra-structure cost, car insurances, quality of life changes...etc.