Even with tough market conditions, the spring months often remain the busiest time for buying and selling, with many homeowners making the leap and listing their home.
There is no doubt that buying a home is one of the life’s biggest purchases, but for a vendor, what are some of the hidden costs one should expect to encounter during the sale of a property?
Juggling the costs of refinancing, paying a loan to buy your new home while waiting for your current to sell, building inspections and getting your home up to scratch in preparation to sell are among the long list of costs associated with selling.
Spending money to make money
Buyers agent and Propertybuyer chief executive Rich Harvey said marketing fees associated with selling a home were sometimes misunderstood by vendors, and the cost could range anywhere from as little as $1000 up to $10,000.
“What I would say to people is, you can't sell a secret. You don't want to go over the top. But again, your marketing fees are proportionate to the quality of the property,” he says.
“I highly recommend you get the floor plan. You’ve got to have professional photos…and again, the question of styling versus not styling, that's a really big question that a lot of buyers would get asked."
Propertybuyer director, Rich Harvey. Picture: Supplied
While more affordable options exist outside of traditional styling, costs are still involved, Mr Harvey added.
"You can do virtual styling, and it's amazing and it's so cheap to do," he says. “I would always say go with the styling unless it's an investment property."
The elements of marketing
Brisbane-based Mortgage Choice broker Laura Nadal said styling could cost anywhere from a few hundred dollars to $10,000, which could entail not just the actual styling, but also furniture hire.
“People want a more presentable house, people have to spend money on painting the house and that could cost thousands but people are willing to do it to get best price,” she says.
Styling is a cost to carefully weigh up. Picture: Benjamin C. Tankersley
Melbourne-based Mortgage Choice broker Joshua Almond said it was quite common vendors failed to realise how paying for marketing helped “elevate and uplift” their listing.
“I think that's certainly something that is not well understood by a lot of people,” he says.
“If you may not have sold for five to 10, or even 20 years, that reach absolutely gives a huge reach for a prospective buyer to see their property and how quickly it can get to market.”
The loan costs of buying before selling
Fees associated with bridging loans were another aspect of selling a home which sometimes take vendors by surprise, Ms Nadal warns.
Bridging loans are short-term loans enabling a vendor to buy their new property before their existing property has sold.
Ms Nadal says that when taking out a bridging loan, factoring in all the interest utilised until settlement day is important.
“The maximum term is 12 months, and obviously, the longer you hold the bridging loan, the higher the interest you have to pay,” she explains.
“In a seller's market, that hasn't been an issue because you are able to sell fairly quickly but in a buyer's market like today, it takes longer to sell so therefore, you end up paying more interest. Interest rates can vary between 7%-10%”.
When it comes to finalising your home loan when your property has sold, Ms Nadal says it is important to ensure the interest is up to date payment wise.
“Then there's obviously the discharge or registration of the title, which is only a few hundred dollars,” she adds.
Mortgage Choice broker, Laura Nadal. Picture: Mortgage Choice
The expensive catch of selling when your home loan is fixed
A common error sellers make is miscalculating the fixed period of their home loan. By selling, they have then broken the fixed rate period which could incur penalties in the thousands.
“So say for example, if they fix for two years and they sold within the first year, and the interest rate, the variable rate is lower than the fixed rate, and they had the breakout, then the fee would be thousands of dollars,” Ms Nadal says.
“That's one thing that people are not aware of when they fix their rate. When it's variable, its fine as there's no break fee.”
Choosing your agent
There is more to choosing a sales agent than who offered the cheapest fee, Mr Harvey warns.
“It's a bit like you get what you pay for … choose an agent that's got a good reputation. Choose an agent that's got good sales history, good reviews, and really connects with buyers,” he says.
“You want to work with an agent that really, really follows up enquiries, is really genuine with that, that shows interest in the buyers, and treats them all with respect and professionalism and also is really communicative.
“They give you good feedback …they're very open and honest and transparent with you."
Other potential costs to take into account
Removal costs, water rates, paying out electricity and rates, cancellation of insurances, legal costs or conveyancing fees were other costs worth remembering Ms Nadal says.
Cancellation of bills and double paying utilities can add up. Picture: Getty
There are even more pertinent in a high interest rate environment where households are considerably more squeezed compared to 12 months ago.
Small repair works detected during a pre-inspection could also add up, as well as pest and building inspections, and carpet cleaning.
As times change, replacing old electrical items, such as air-conditioners which are no longer to code, or compliant is another consideration. There is also addition of any relevant new non-negotiables, such as smoke alarms in every room (required across all Queensland homes by January 2027).
Last minute repair works upon selling were other costs that might need to be outlaid to ensure the house is to standard in time for handover.