What should you look out for when selling a house and what are the real estate fees? In this blog I will discuss what a good agent will do for you and how they will go about selling your home, as well as the costs involved.  

 

Selling a House- real estate fees

What will it cost you to sell your property through a real estate agent? The cost of selling your property will generally be over $10,000, depending on the price of the property.  

 

The costs involved in selling your property include: 

 

  • Agents commission 
  • Advertising  
  • Conveyancer 
  • Form 1 

 

Agents Commission 

 

First of all, there is the agent’s commission which can be anywhere between 1.25% to 2%. A good agent won’t discount their commission, and you want a good agent. Sometimes there will be admin costs on top of this. If you’ve decided to sell through an agent, a good agent will be the one to get you the most money. Your agent is worth every cent because for every cent you pay them, you make more money. 

 

Advertising 

 

In South Australia, the cost for advertising is usually around $2,500, but it could be more depending on the agency agreement. Displaying your ad on realestate.com.au is an important step but you will want it to be one of the top ads.  

 

I also suggest putting a sign in front of your house. Although, you may feel no need to put a sign, I would suggest the opposite. There are lots of people, even your neighbours, that are looking for investment properties or simply places for their children to call home.  

Brochures are another important form of advertising. These are distributed at open inspections to all potential buyers.  

  

Altogether, advertising should cost you no more than $3,000 and a minimum of $2,500.  The agent will draw up an agency agreement so that you’re locked into them to sell the property. You can decide what the length of time is and that’s where you find out all your costs. 

 

Conveyancer 

Having your own conveyancer will protect your legal interests 

So, a conveyancer should cost you anywhere from $600 to $1,300—prices differ depending on the conveyancer. They will check your contract, ensuring the legalities are done, organise the settlement and if there’s a mortgage involved, they will check with the bank, ensuring they are ready to discharge the mortgage. A good conveyancer is worth their weight in gold.  

 

Form 1 

 

Some real estate agents do their own Form 1, but not so many these days because if they get that wrong- and many of them do- then that’s a way for the purchaser to get out of the contract. Often, they subcontract out the form 1, which normally costs around $500.  

 

What do you need to look out for when selecting your agent? 

 

Firstly, check the agent sells property in the area and understands the market. You MUST ensure that you are taking care of your own interests.  You want the best outcome for you, but often agents can paint this in a way that is more suitable for them. And that brings me to auctions.  

 

Auctions 

 

I get very passionate about auctions; I have never believed they are the best option when selling. A good real estate agent should tell you—they are not the most viable way for you.  

 

Many real estate agents use auctions to sell properties. They tell you, as a seller, that auctions are a great way to give you the best outcome because they show u what people really will pay in this market. They say that all you need is two people to compete, that it’s open and you and the other bidder can see what is happening. They will say to you, “If that’s what the market is going to pay, then this is what you need to do.” 

 

Let me tell you why I believe they really do it.  

 

  1. It’s a very short campaign, usually only a few weeks for them. They advertise, which you pay for and requires no skill on their behalf. Your agent just shows up and if anybody wants to make an offer they can. You pay for the auction, anywhere from an additional $500 to $1,000. So, it is no cost to them.  

 

  1. An auction doesn’t drag out, even in a tough market or a busy one, it is a very easy option for your agent. They get a result quickly with little or no work. 

 

  1. From a sales point of view, I do not believe they get you the best seller or the best outcome. They only get you the outcome on that day.  

 

A good agent will rarely ask you to auction a property. They are fully aware that the best outcome for you is for them to sell the property using their skills and expertise, getting you the highest price possible. Which, in my opinion, will not come from an auction.  

 

What a good agent will do

 

A good agent will present offers to you and inform the purchaser that they are not the highest, driving the price up. They can do this behind closed doors, discussing with people that may be cautious to go unconditional on the day.  Lots of people don’t like to buy unconditional and risk losing their deposit that’s why we have subject to finance clauses which most buyers will use (not allowed at auction).  

 

A good agent will ascertain whether a potential buyer has already spoken to a bank about finance. They will delve into their financial situation and check with the purchaser’s finance broker.  

 

If they are ready to buy and it’s subject to finance, a good agent will do all that. People will often pay more money for conditions such as finance, building inspections and settlement on a particular date. Those kinds of things are not available in an auction setting.  

 

In my opinion, auctioning a property is the best outcome for the real estate agency only. It is a tactic they use which some agencies do all the time. A tactic for them not you.  

 

A good agent is willing to work to get their commission. To turn up more than three or four times.  They show people through your home and listen to buyers needs and wants and go through the benefits of your home for their lifestyle. They go to purchaser’s homes to discuss offers and make themselves available whenever necessary (not just at opens). A good agent will show people through the property for sale anytime that suits the buyer on a one to one, allowing for more personalised service. 

 

So now you know of some things to look out for when selling a house and the real estate fees that you can expect. If you are willing to pay anywhere between 1.5% and 2%, plus advertising, and all the other costs, then make sure you get yourself someone willing to work for their commission.  

 

I’ve written another blog about how to sell your property yourself. That is always an option that many people dismiss. And my next blog will be about how to find yourself a good real estate agent.  

   

Bye for now, I hope you found this useful and now know what to look for in an agent as well as the real estate fees involved in selling a house. Please check out my website. If you decide this isn’t for you, and you believe your property may be useful for me as a real estate investor, developer and renovator, please don’t hesitate to give us a call. We can save you most of those costs, except your own conveyancer, who you need to protect your interests and assure all legalities are met. 

 

Good luck, I hope it all works out for you and you get your best outcome.