Costs of Selling a House: What to Expect

We wish we could just give you a number in one sentence. But, like most things, it depends. 

The cost of selling a house can vary widely depending on a range of factors. To help you budget effectively, we’ve broken down the main components of house selling costs into five key categories:

1. Real estate agent commission
2. Marketing costs
3. Legal and bank fees
4. Capital Gains Tax
5. Miscellaneous

Understanding the costs when you sell property can mean thousands of extra dollars in your pocket. 

1. Real estate agent commission

One of the biggest house selling fees is the commission that you pay to your real estate agent. We have a complete guide to real estate commission that takes you through the ins and outs of the different commission structures and the factors that can impact how much commission you’ll pay. Most Canberra agencies charge between 2% and 3%, plus GST. The usual commission for a real estate agent is around 2.5%, plus GST.

Commission structure options for real estate agents

• Flat fee: A fixed amount agreed upon between the agent and seller, regardless of the sale price. It gives the seller and agent a known cost, making it easier to budget. While this is a good option for sellers, it may not incentivise the agent to secure a higher price.
• Percentage fee: The agent earns a percentage of the final sale price, typically around 2.5%. The percentage fee system motivates the agent to maximise the sale price as their commission is directly proportional to the sale amount.
• Combination fee: This system uses a combination of a percentage fee with a bonus incentive for exceeding a target price. For example, the agent gets a 2% commission on the sale price up to $750,000, then an additional 10% incentive if the price exceeds the threshold. So, if the property sells for $800,000, the commission is $20,000. This encourages agents to achieve top results while protecting the seller in case a high price is not secured.

Auction fees

Selling house costs can also include auction fees. Usually, the agent who is selling your home is not the person running the show on auction day (although some of our auctioneers are also incredible agents). Generally, an ACT auctioneer charges between $500 - $1,000.

Why is a real estate agent necessary?

Some sellers opt to sell their property privately to cut costs by avoiding real estate agent fees. While this approach can save money, it can be quite time-intensive and stressful, particularly if you're unfamiliar with the necessary steps and legalities. 

2. Marketing costs

Another major factor in the cost to sell a house is marketing. It's about far more than placing a newspaper ad these days. The key to a successful campaign is knowing which marketing options are most likely to hook the right buyer. Your real estate agent will be able to personally tailor a marketing campaign to suit your property, budget, and the right audience.

In Canberra, marketing campaigns typically start from $3,000–$3,500 for basic exposure and can go up to $10,000+ for high-end properties.

How to choose the right property marketing for you

How much you spend will depend on the type of property, your target audience and your budget. Bigger isn’t always better. If your advertising strategy isn’t focused on the right people, it doesn’t matter how much exposure it gets. On the other hand, you don’t want to skimp on marketing and limit your pool of potential buyers.

3. Legal and bank fees

Conveyancing

Conveyancing fees are mandatory expenses when it comes to the cost of selling a house. They cover the transfer of property ownership from the seller to the buyer. Finalising the sale requires the preparation and processing of several important legal documents. It can be easily overlooked by a non-specialist, like a missing compliance certificate, which can cause major delays and financial penalties.

As a rough guide, the average conveyancing cost can range from as little as $500 to $2000 or a little over. Some conveyancers charge a sliding fee depending on the property, but most charge a flat rate. Essentially, conveyancing fees can be divided into two categories:

1. The amount that you pay to the solicitor or conveyancer for their time and expertise. This might be a fixed amount, a sliding scale, or a ‘base’ fee with additional charges for extra work on top.
2. The amounts payable to various authorities for the required searches and due diligence. Your solicitor will pay these for you and then charge the amount back. This should be itemised on your final invoice, usually under a category heading of ‘disbursements’.

Disbursements include:

• A title search confirms if the property belongs to the person who is selling it and has no restrictions that would impede the sale
• Compliance certificate and search fees charged by government authorities
• Registration of mortgage fee
• Registration of transfer fee
• Photocopying

Bank fees

There are some formalities you may need to complete and fees which will become payable when you sell your home. These include:

• Mortgage discharge fees: 

If you have a mortgage on the property you're selling, make sure you contact your lender about a mortgage discharge fee. You need to pay a mortgage discharge fee (also known as a settlement fee) for closing your home loan, which applies to both fixed and variable loans. 

These lender fees vary depending on factors like your loan amount, fixed term, and specific loan conditions. Mortgage discharge and break fees typically range from $150 to $1,000.

• Early exit fees:

If you end a fixed home loan before the term expires, you could also face a break fee (also known as an early exit fee). This can vary depending on your loan, but typically ranges from $150 - $600.

• Loan portability:

If you’re buying another property, you might save on costs by staying with your current lender. Selling your home doesn’t always mean you need to close your mortgage. Many home loans offer the option to transfer your existing mortgage to your new property, a process known as loan portability.

Loan portability can also speed up the process. Instead of applying for a new loan, you simply transfer your current one to your new property, making it a faster and more convenient option. Additionally, it can help you avoid some of the upfront costs associated with closing and reapplying for a home loan.

4. Capital Gains Tax 

When you sell an investment property, ideally, it will be for a price higher than your original purchase cost. If this results in a profit, known as a capital gain, it may be subject to Capital Gains Tax (CGT).

You can be exempt from CGT if your house has not been used to generate income (as a rental or for a business), and if the property is less than 2 acres. 

Since calculating CGT can be complex, it’s recommended to seek guidance from a tax adviser when estimating your total selling house costs. You can find more information on the Australian Taxation Office website.

5. Miscellaneous

There are a few other expenses that should be kept in mind as you put together your budget. Miscellaneous costs include:

• Pest and building report: This report identifies structural issues, pest infestations, or damage to the property. Buyers often request this report for peace of mind, and sellers may cover the cost to speed up the sales process. In the ACT, this is a cost that the seller outlays initially; however, the purchaser will reimburse them for these costs at settlement.
• Property maintenance and styling: You can control how much you spend on this; however, your agent will provide some guidance. They’re experts in knowing what investments will pay off.
• Outstanding council rates and strata fees: You were going to pay these eventually anyway, but it’s worth remembering that these bills will need to be paid on settlement.
• Moving costs: This includes expenses for hiring professional movers, renting moving trucks, or purchasing packing materials. It’s time to call on your friends and family to help out. Costs vary depending on the distance (with interstate and international moves being the most expensive)
• Cleaning and renovations: Thorough cleaning ensures the property is presentable for open homes and inspections. This may include professional cleaning services for carpets, windows, or general areas. Updates like painting, minor repairs, or lawn care can enhance the property's appeal and potentially increase its sale price. 

Final Thoughts

So, how much will it cost to sell my house? As you can see, the total cost of selling a house includes more than just agent commission. Whether you're selling a modest unit or a prestige property, knowing your home selling costs upfront helps avoid surprises.

To get a better idea of your potential sale price and all related house selling costs, talk to a local expert. Just fill out the form below for an online appraisal.