Your guide to costs & fees of selling a house
Selling a home is undoubtedly a significant life event. While the thought of a fresh start can be exciting, the process itself can sometimes feel challenging and emotional.
This is often due to the hidden and unavoidable costs that come with selling a property. To help make your journey smoother, it’s important to understand these expenses from the outset, so you’re fully prepared and not caught off guard by any unexpected charges.
What are the fees and costs for selling a property?
Selling a property isn’t just about pocketing profits; there are costs involved as well. But don’t worry, we’ve outlined everything you need to know to navigate these expenses and keep the process on track.
Preparation costs
Maintenance and styling
Before selling a property, it is paramount to ensure your house is in the best possible condition. This often means performing maintenance tasks both inside and outside of the home.
Taking the time to ensure that maintenance issues have been attended to does cost money. However, this is an important step in the process of selling a house and, therefore, achieving the best possible sale price.
A house that appears run-down will struggle to sell. To negate this, you will have to fix plumbing issues that have left water marks on the roof. In addition, fresh coats of paint will need to be applied to cracked and marked walls.
Maintenance might also encompass having pools and tennis courts professionally cleaned. Sellers may even need to clean roofs and gutters. A real estate agent will advise you on what maintenance works are crucial and what can be left for the new owners.
Before putting your house on the market, your real estate agent may recommend property styling. This could be because the house is brand new and has no furniture or needs added appeal.
Combined maintenance and styling could typically cost around $3000-$5000.
Building report
Occasionally, when a person chooses to renovate or perform maintenance checks before selling their home, they may uncover a structural issue. In such situations, a building report is required to identify anything that needs to be fixed and prevent unexpected problems, like moisture in the walls being found by the buyer at the last minute. The cost for this report typically ranges from $500 to $700.
Professional fees
Agent’s commission
When it comes to selling a house, the agent's commission makes up a key component of the overall cost of selling. A real estate agent is hired to provide their industry expertise and exclusive contacts to help you sell your home.
Depending on the real estate agent you engage, sellers can enter into several commission methods. Agents may ask for a flat fee or operate on a tiered commission. These methods will be discussed and agreed upon before any contracts are signed.
Marketing Costs
In most real estate agencies, marketing costs are separate from an agent’s commission. With this in mind, today, marketing campaigns encompass both digital and print media to be successful.
Digital marketing can include:
- Digital brochures
- Real estate portal listings
- Social media posts
- Professional photography
- Drone footage
- Signage
- Property brochures
- Newspaper and magazine advertisements
- Professional copywriting
While there are many marketing techniques, the agent will not employ every single one. Instead, marketing campaigns will be tailored to your specific property, location and target buyers. With this in mind, marketing can cost anywhere between hundreds and thousands of dollars.
Auction fees
If you are putting your home up for auction, you will need to pay auction fees. Depending on your region, these fees may be included in the agent’s commission. You can expect the auctioneer to charge anywhere from $400 to $1,000 to sell your home.
Legal costs
There are legal costs associated with selling. Namely, engaging a conveyancer or solicitor to legally transfer ownership of the home from the seller to the buyer. The conveyancer or solicitor helps sellers manage everything from the sales contract to other legal fees.
Licensed conveyancers and solicitors will charge for this work. However, it is worth noting that the exact monetary cost will vary depending on location and agency.
This can typically cost $2,000 upwards.
Mortgage discharge fees
If you have a home loan with a bank, the bank will charge a discharge or settlement fees to close down your loan. Mortgage discharge fees, settlement fees and small Land Information New Zealand (LINZ) charges are some of the costs you may encounter from your bank and solicitor when selling a home. This can all add up to around $150-$600. If you have a fixed-rate loan, you may also have to pay early repayment costs. Contact your lender in advance to find out an indicative figure. Your solicitor or conveyancer can do this on your behalf if you sign your lender’s discharge form and hand it over to them.
Government & tax charges
Bright-line test
In New Zealand, there isn’t a general Capital Gains Tax (CGT), but if you’re selling a rental property, holiday home, or vacant land, you might still need to pay tax on any profits. This is because of rules like the bright-line test, which taxes gains made from selling residential properties within a certain period (currently two years). If you bought the property intending to sell it for a profit, or if it falls under property development or trading, the profit may be taxable.
Unlike some countries, gains on assets like shares are generally not taxed unless you trade them as part of a business.
Council rates and/or body corporate fees
When selling a property, there may be outstanding council rates and body corporate fees that need to be cleared before or at settlement. These charges are typically billed quarterly, so it’s common to have some fees outstanding when the sale completes.
Additional expenses
Moving fees
Moving costs can easily be forgotten. However, it is worth mentioning that they will almost always be incurred. This is because sellers will need help moving furniture and boxes from their old house into their new property. Moving costs can be a fixed or hourly rate.
Hiring a truck for moving your home belongings and appliances may cost $200 per day or upwards.
Miscellaneous expenses
When selling a home, there are many different miscellaneous expenses to consider. While these costs might not apply to everyone who sells their house, they are expenses that are worth mentioning.
Stress
When it comes to selling your home, there are hidden costs that aren’t tangible. For example, stress.
Selling a house can be a time-consuming and overwhelming process. That’s why most people choose to work with an experienced real estate agent to manage the sale of their home. Your salesperson will help take care of everything and will guide you through the process from start to finish.
Complete your property sale with LJ Hooker!
Selling a home marks a major life transition. With so many emotions and feelings of stress tied into the moving process, look for a real estate agency that will help make this transition as seamless as possible.
While the moving process and the associated costs may seem overwhelming, LJ Hooker can help break down the many components of selling a home. Helping take the stress out of moving.
Whether you are preparing to sell or looking for more information, our team is waiting to assist you. We offer you experience alongside excellent market knowledge that helps make the selling process as smooth as possible. Contact us today for a free property appraisal.
