Wondering how much it costs to sell a house in Australia? The short answer: it’s not cheap. We’re talking tens of thousands of dollars, depending on where you live. This is because there are so many costs involved, from real estate agent fees to marketing costs, conveyancing fees and lender fees.
So today, we’re breaking down the typical cost of selling and highlighting everything you’ll have to spend money on to sell your property. In the end, you’ll find a breakdown of the cost of selling a house in Australia.
Real estate agent fees
Let’s begin by breaking down all the key expenses you can expect to pay to your real estate agent.
Real estate agent commission
A commission is the money you pay to your real estate agent when they sell your home. There’s no exact cost, as it varies between states, cities and suburbs, but you can expect to pay anywhere between 1 and 4% of your home’s final sale price. Here’s a breakdown of average commissions throughout Australia:
- Australian Capital Territory: 2.19% or $10,850.
- New South Wales: 2.01% or $10,050. This is one of the lowest commission rates in Australia, and it’s even lower in Sydney at 1.87% because of high demand.
- Northern Territory: 2.49% or $12,450 (the same in Darwin).
- Queensland: This is where you’ll find the second-highest commission rates at 2.56% or $12,800. The Brisbane average is 2.52%.
- South Australia has the lowest commission rate at 1.94% or $9,700. It’s even better in Adelaide at 1.90%.
- Tasmania: This is where you’ll find the highest commission rates at 2.71% or $13,550. Hobart’s average commission rate is 2.67%.
- Victoria: The average is 2% in Victoria or $10,000. The Melbourne average is lower at 1.93% because of the increase in competition.
- Western Australia: The rate is smack in the middle at 2.32% or $11,600. In Perth, it’s 2.28%.
What affects an agent’s fees and commission?
Three main factors affect a real estate agent’s commission rate:
- The type of property
If your home is unique or expensive and will only appeal to a small selection of buyers, your real estate agent may charge a higher commission. This is because it will take more time and effort to market your property to such a select group of potential buyers.
- Location, location, location
As you can see from the average commission rates above, location is one of the biggest deciding factors. But this also refers to metropolitan cities and regional areas within the same state. It all comes down to supply and demand. In capital cities, there’s greater competition between real estate agents, so it’s in their best interest to set competitive real estate agents fees.
In contrast, because there are fewer properties and fewer real estate agents in regional and rural areas, those agents can comfortably set higher rates.
- Experience
A newer real estate agent is typically going to have a lower commission rate compared to a more experienced agent. But before you immediately write them off, we recommend using our free online comparison service to review their performance data, commission rate and marketing strategy. You can also read homeowner reviews to make an informed decision.
Remember that the agent with the lowest real estate fees isn’t always the best option. Use our comparison service to choose a real estate agent with a proven track record of local sales. Because while you might save on fees, if they don’t have the experience or proactiveness to work hard to sell your property, you will altogether lose. We mean losing out on the best sale price and even having to pay double the fees if you have to change agents during the selling process.
What are the different commission structures?
How much commission you pay depends on the above factors and your agent’s preferred commission structure. Here are the three main commission structures:
Fixed fee
Fixed-rate or flat fee commission means you agree to pay a specific dollar amount upon the sale of your property regardless of the final sale price. A fixed fee approach gives sellers certainty and peace of mind regarding the fee as it doesn’t change, no matter the final selling price.
But it can also cause fear as it may mean the agent sells the house quickly, even if that results in a lower price. This is because flat-fee agents need to sell a certain number of properties annually to reach their income target.
Fixed percentage fee
The fixed percentage fee is slightly different from the flat fee commission method. Because while the percentage remains the same no matter the final sale price, you’ll have to pay a higher commission if it’s a higher sale price. So it doesn’t have the same certainty as the fixed-rate method. But for most sellers, a higher price is usually worth the higher commission rate.
Tiered percentage
The tiered percentage method is like a bonus scheme for real estate agents and is often used for more expensive properties. It operates on a sliding scale to encourage real estate agents to secure a higher sale price.
An example is that you may agree to a 2% commission rate if the property costs $480,000 or less and an additional amount if the home sells for more than its expected sale price. So, if the selling price is $500,000, you’ll pay 2% on the first $480,000 (being $9,600) and, for example, 10% on the additional $20,000 (being $2,000). The total commission payable would be $11,600.
Can you negotiate commission rates?
Yes, you are within your rights to negotiate commission with your real estate agent. Once you have a shortlist of agents, here are our top negotiation tips:
- Start interviewing them and don’t be afraid to mention that they’re competing with other agents. If they want to sell your property and realise there’s competition, they may be more willing to “price match.”
- Ask if they’re happy to use your preferred commission structure. That might be the tiered percentage if you want the highest price possible.
- Ask if there are additional agent fees besides commission and get them all in writing.
- Remember that if your property value is higher than average, you’re in a better position to negotiate a lower rate.
Click here to visit our commission calculator to get started.
Marketing costs
Advertising and marketing costs are the other big ticket item when selling a house. Agency advertising rates usually range from 0.5 to 1% of the property value. But the fact is, you can’t sell a secret, so you really need to pay the fees to get your home in front of as many potential buyers as possible. The more people who know your home is for sale, the greater the chance of selling at a higher price.
An experienced real estate agent will use their local knowledge of selling property to create a print and digital marketing campaign that expertly targets your key buyer demographic. But here’s a breakdown of what should be included in the marketing costs:
- Online listings (with professional photos, floor plans and compelling copy) on real estate websites like realestate.com.au and domain.com.au. The copywriting should be compelling and entice people to view your property.
- Offline property listings in local print publications such as newspapers and magazines.
- A “for sale” sign for your property.
- Professional photography and videography.
- Flyer and brochure creation for open house inspections.
- A social media campaign.
Auction fees
If you sell your home at auction, you can expect to pay an auctioneer’s fees on top of the commission. This is for the professional auctioneer’s services on auction day. But an experienced auctioneer is worth their weight in gold. They can create a competitive atmosphere between potential buyers and get you the highest selling price possible with their expert negotiation skills. Auction fees in Australia are generally around $600.
Selling fees
Now we’ve tackled real estate fees, let’s focus on the innumerable other common costs involved with selling a house.
Conveyancing fees
Conveyancing fees range from $700 to $1300 and are the costs involved with hiring a licensed conveyancer or solicitor. These solicitor fees are mandatory for every property sale as you need their expertise to handle the legal documents and to transfer legal ownership of the property to the new owner.
Conveyancing fees include sourcing a property’s certificate of title, overseeing the sale contract, liaising with local councils if applicable and settlement fees for representing the seller on settlement day. They can also help clients arrange building inspections and land surveys and can chase outstanding rates or bills if needed. This is a typical cost of selling that can’t be skipped.
Depending on where you live, you’ll need to engage the services of either a professional conveyancer or solicitor. For example, in the ACT and Queensland, only a solicitor can assist, while you can use either a conveyancer or solicitor for conveyancing services in other states and territories.
Visit our website to learn more about our professional conveyancing services.
Capital gains tax
Capital gains tax is only applicable if you’re selling an investment property. But capital gains tax is the amount you have to pay the federal government (via the Australian Tax Office) if you make a profit and sell your home for a higher price than when you bought it. The amount of capital gains tax you can expect to pay is calculated by subtracting the expenses you incurred while owning the investment property from the sale profit.
What types of expenses are we talking about?
- Sale fees like stamp duty, legal fees, marketing fees and commission fees.
- Ownership costs, including rates, land tax, maintenance and home loan interest.
- Renovation costs, if you decided to make improvements or upgrade the kitchen and bathroom while it was an investment property.
The Australian Taxation Office has a capital gains tax calculator and lots of tax advice if you want to learn more about this specific cost.
Mortgage discharge fees
Home loan lender fees include a mortgage discharge fee (previously known as an early exit fee) you pay to your financial institution, which can be between $150 and $1000. Lenders typically charge mortgage exit fees if you’re paying off your existing loan in advance. Settlement fees exist to cover administrative costs. The lender will provide you with a form to fill out, and then the entire home loan exit process should take between two to three weeks.
Moving costs
Don’t forget about the cost of moving or storing furniture, depending on your personal circumstances. This will vary greatly. Because it will be much more cost-effective to move between studio apartments in the same city compared to moving an entire four-bedroom house interstate.
Visit our selling costs calculator to determine an estimated cost of selling your property.
Voluntary costs
Voluntary costs are those hidden costs you don’t typically think about when selling a house, but they make all the difference in increasing the property value.
Home maintenance
- Professionally cleaning your home (from $50 per hour) before open house inspections, a professional photo shoot or following the property sale when you vacate. This might include a deep clean or just a carpet cleaning service.
- Minor repairs or upgrades, like painting the interior or exterior. If you use professionals, this can cost between $250 to $400 per interior room and $20 to $50 per exterior square metre.
- Renovations if they’ll improve your property value without overcapitalising. This might be a kitchen or bathroom facelift.
- Garden maintenance to increase your curb appeal and make the best first impression possible.
Home staging services
Home staging is the process of preparing your home for open house inspections, a professional photo shoot or auction day. Home staging services may involve simple professional styling tips all the way to furnishing your home for the duration of the selling campaign. It’s about showing your home in the best possible light to attract potential buyers and get you the highest sale price.
A good real estate agent will either give you home staging advice themselves, generally as a part of their commission, or may recommend a professional home staging service in your area.
Home staging fees range from $2000 to $8000 depending on the level of service, property size and the campaign’s duration. For example, at the higher end of the spectrum, you can expect the package to include consultation fees, moving costs, furniture hire and interior decorating over a six-week campaign.
How to budget to sell your home
There are a few things you can do before selling a house to set yourself up for success:
- Pick your ideal selling date.
- Visit our website to receive a free property value estimate. We compare your property’s features, type and condition with recent comparable sales in your area to give you an estimated property value. This will give you a good understanding of what you can expect your home to sell for in current market conditions.
- Go one step further and schedule a free property appraisal with a local agent. They can give you an estimated market value and provide advice on how you can easily increase your home’s value.
- If they recommend doing work before hitting the market, the next step is to figure out the costs involved.
- Once you’re ready to list your property for sale, now’s the time to do some shopping around. Compare local agents to find the right fit for you. Ensure you’re happy with their proposed marketing strategy, local knowledge and commission structure.
- Review the costs of selling a house listed above and divide them by the number of weeks or months before your ideal selling date to determine a budget.
Of course, unexpected fees or higher costs are to be expected. But this is a great way to get an estimate and determine whether now’s the best time to sell your property and evaluate the cost of selling.
Do you pay stamp duty when selling a house?
No, you only pay stamp duty when buying a home, so this fee isn’t applicable in this instance.
How much does it cost to sell a house in Australia?
Okay, here’s the breakdown and the grand total you can expect to pay when selling a house in Australia based on the aforementioned typical expenses. For this example, we’re going to say we’re selling a $1,000,000 home (not an investment property) in Sydney.
- Commission: Based on an average commission of 1.87%, the commission would be $18,700.
- Marketing costs: Based on 0.5% of home value, the marketing costs would total $5,000.
- Auction fees: Seeing as many Sydney properties are sold at auction, we’ll add this $600 fee.
- Conveyancing fees and legal fees: Let’s use the average of $1000.
- Mortgage discharge fees: Once again, the average discharge fees would be $500.
- Moving costs: Let’s add $500 to be safe.
So the grand total would be $26,300 to sell the house without any hidden costs. So get ready to start spending money!
Looking for local real estate agents?
When it’s time to incur all the costs of selling property in today’s market, you’ll need an experienced real estate agent on your side. Fortunately, LocalAgentFinder’s free online comparison service allows you to easily and anonymously compare local real estate agents. You can view the real estate agent’s fees, marketing costs, selling strategies and performance data to find the right agent for you.