How much does it cost to sell a house in Victoria?
Need to know the cost of selling a house in Victoria? This guide will take you through the key costs of selling a house including legal, government and real estate commission fees.
The costs of selling a house in Victoria can differ depending on location and your method of sale. Here are the key house selling costs to factor into your budget.
Real estate commission in Victoria
Real estate commission fees aren’t standardised in Victoria and your agent is required to advise you that their commission rate is negotiable before you sign the sales authority, also known as an agency agreement.
To negotiate a good rate, it’s important to know not only the average commission rate in your area, but also how commission structures work. In real estate, commission rates are usually based on a fixed or tiered commission structure. Fixed is the most common and is calculated by multiplying the sale price by the commission rate.
Tiered commissions are performance-based and reward agents for selling your home above the set price. Anything over this price results in a higher rate.
The commission you’re to pay must be recorded in your sales authority and, if it’s a percentage, must also be shown as a dollar amount.
Average commission cost in Victoria
Average real estate commission fees in Victoria are around 2.05% of the sale price, which is at the lower end of the national average of around 2% to 2.5%.
Like in other Australian states, real estate commissions are likely to be higher or lower depending on location and whether you’re in a rural or metro area. The difference in percentage points may seem small but can have a real impact on how much you end up paying out of your sale price. We can see how this works by comparing the average commission on a house sold for $1.2 million in two Melbourne suburbs and a regional centre:
- In the Melbourne suburb of Hawthorne, the average agent commission rate is 1.91%, which would result in a commission fee of $22,920.
- In the Melbourne suburb of Carlton, the average agent commission rate is higher at 2.07%, equating to a commission fee of $24,840.
- In rural Bendigo, the average agent commission rate is higher again at 2.34%, resulting in a commission fee of $28,080.
As this illustrates, a difference of 0.43% makes selling a house in Bendigo $5,160 more expensive than in inner-city Hawthorn. One of the reasons real estate agent fees tend to remain lower in metro areas is due to the intense competition between agents – there’s more agents competing for your commission. On the other hand, smaller towns with fewer listings and less local agents often have higher rates, sometimes as much as 3.8%.
Cost of Conveyancing in Victoria
Average conveyancing costs in Victoria are comparable to the national average, which range between $400 and $2000+. Conveyancing fees can vary between Melbourne and regional Victoria, and depending on the value of the property, property type and whether you use a conveyancer or a solicitor. A complex property transaction may also incur a higher fee.
If you're looking to sell your home anytime soon, it's a good idea to calculate the cost of selling your home to help you budget accordingly.
Melbourne is often referred to as Australia’s auction capital and sellers who auction their properties in this city can see a decent amount added to their reserve price. If you choose to sell at auction, you can expect to pay anywhere between $400 and $1000 to hire the services of a professional auctioneer.
It's worth noting auctions tend to have more expensive advertising campaigns to build hype for the big day. As a guide, selling a $700,000 house at auction can cost between $6000 and $9000 to advertise, close to or higher than the average marketing costs if you’re selling through an agent.
Additional costs for selling your house in Victoria
No matter how much you spend on marketing, selling your house will be an uphill battle if it’s in desperate need of maintenance or repairs. A clean, well-presented home is more likely to draw in buyers and increase your final selling price. Preparing your home for sale can include renovations, repairs, garden maintenance and professional home staging. How much you spend depends on the condition of property, but minor cosmetic updates can be just as effective as major overhauls and can cost you less than $2,000.
It's natural to feel overwhelmed with the selling process, but OpenAgent's ultimate property guide can help simplify the entire procedure.
Other factors that can alter the cost of selling a house in Victoria
Besides location, real estate fees can also vary depending on a range of factors, including:
Real estate agents have to work harder to sell unusual properties or quirky houses that are only likely to appeal to a small number of buyers. The extra time and effort involved is likely to result in a higher commission rate.
Method of sale (private or auction)
Selling at auction can increase the costs of selling a house due to the added auctioneer’s fees and a more expensive marketing campaign. It should also be noted private treaty sales offer a cooling off period of 3 days in Victoria, compared to other states which range from 0 to 5 days.
A more expensive home may entice an agent to lower their commission rate – simply because their fee from the sale will be worth the effort for them. On the flip side, agents are unlikely to be very flexible on their rate when selling a home with a lower value.
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