Selling a house can be a daunting process for any homeowner, especially when it’s a property you’ve lived in and loved. Australia’s real estate market is big business, and you need to know some crucial aspects of the home selling process so that the whole process can run as smoothly as possible, and you get the best value out of the experience.
In this article, we will break down the different aspects of selling a home in NSW so that you can equip yourself with the right information to make smarter decisions. These are:
- Getting your home ready to sell
- Budgeting for other essential costs
- Choosing a real estate agent
- Auctioning versus Private Selling
In each section, we will demystify the process and give you valuable advice. Whether you are upsizing to a bigger home, downsizing to a smaller one, or moving to a different area entirely, let’s get started.
Getting Your Home Ready
Selling your house fast involves making sure that your home is updated, free from noticeable flaws, and appeals to potential buyers. When you sell a house, you are selling a lifestyle fantasy. Open homes are a great way to motivate a buyer’s interest, but only if you put in the time and money to get your home ready for sale.
It is recommended to fix problems such as leaking pipes or taps, stains on walls, cracks, and other damaged utilities and home areas. If everything is perfect in terms of condition, it might just involve cleaning up the home and updating the interior. However, there is a balancing act when selling a house.
You don’t want to spend too much money on home renovation and don’t want to spend too little. For example, if you live in a much older home that requires a complete renovation, it may not be worth the cost as you will be less likely to get a return on your investment. Most sales in New South Wales that spend up to $10,000 to fix problems and renovate the house tend to get a better sales price and better profit than those that spend considerably more or nothing at all.
Cosmetic upgrades and apparent problems should be high up in your list of priorities when selling a house. This is because people will look for flaws during an inspection and mentally calculate how happy they are to offer for your home with these problems in mind.
Lastly, consider updating your home’s exterior and garden to improve its curbside appeal. Everyone will be judging a book by its cover first, so make sure your house looks as good on the outside as it is on the inside.
Budgeting for other costs
Just as it is when purchasing a property or getting your first home loan, there is a set of processes that you need to budget for when selling your house in NSW. These include:
- Real estate agent commission
- Real estate agency fees
- Conveyancing fees
- Home loan discharge fee
- Stamp duty, rates, and land tax
While separate from getting your home ready for selling, these are the costs that people sometimes forget to take into consideration.
Real estate agent commission & fees
The commission that you pay your real estate agent is typically between 1-4% of the property’s selling price, with an average of 2% in NSW. This can vary depending on the agent’s experience, service level, and sales history – a topic we will discuss when choosing your real estate agent.
Real estate agency fees can include costs such as advertising and marketing and property styling. Make sure you speak with your real estate agent to get a breakdown of these fees and how it will be spent on selling your house fast. As a rough guide, advertising and marketing will be between 0.5-1% of your home’s value.
If you require the services of a conveyancer or lawyer during the process of selling your house, you will need to think about the potential cost. The price can vary depending on what you need their services for, so our recommendation would be to get multiple quotes before requiring their expertise. Conveyancer costs range from $500 to $2000 in NSW.
If you have a current home loan for the property, you will more than likely have to pay a discharge fee and other fees such as settlement fees and government fees. If your home loan is wholly or partly fixed, you may also have to be an early repayment cost. Our best advice would be to contact the lender and ask them to give you a quote for the payout figure.
Other fees you have to be wary of are stamp duty, rates, and land tax. There is no real average statistic to look at here, as every home is unique, but we recommend for you to do the research now before employing a real estate agent so you can make smarter decisions when selling a house.
Choosing your real estate agent
Choosing a real estate for selling your house is a challenging decision to make. One of the most important criteria is whether they are licensed. The Australian property market is expanding yearly, and with it comes new people seeking to represent homeowners when selling their homes. This might seem a no-brainer to many people, but it’s a critical detail that many people overlook. A licensed real estate agent will have better insider knowledge of the process and tend to give more in-depth advice.
Also, you need to consider their knowledge of your local area and if they have sold similar properties to the one you are trying to sell. Check their sales history to see what kinds of deals and sales prices they achieve for their clients. We also highly recommend choosing a real estate agent that you can build a great rapport with. You’ll be spending a lot of time talking to each other, so it makes sense to ensure that you like and trust them to have your best interests at heart.
With this in mind, they will help you find a value for your house by using their knowledge, expertise, and experience. We also recommend searching around the different property value websites to find local market prices to find a price that you’ll be happy with – but just like when getting your home ready, it is a balancing act. You don’t want to price too highly out of your market. You don’t want to price too low and lose potential profit. Food for thought.
Auction or Private Sale?
This is probably the most critical question a homeowner can seek an answer for – how to choose whether to go to auction or to make a private sale when selling your house?
There are advantages and disadvantages to both options, and it is something that a licensed real estate agent will be able to help you with. We will give you a breakdown of the pros and cons so that you can be better informed to do further research and ask more precise questions.
Going to auction
When going to auction, you can typically get better sales prices in a quicker timeframe than selling privately. This is because the intensity of the competition created by bidders can encourage higher and more consistent bidding. It also puts more pressure on potential buyers to close and make an offer because they risk losing the chance to do so.
However, because it is more intense, you can expect to spend more money on advertising and marketing to build hype and awareness before the auction. There is also the risk of devaluing the property if it does not get sold at auction. This sends a signal to other potential buyers that it is not worth the asking price, or there is a problem with the property. Furthermore, auctioning your house for a fast sale can be more dependent on the market conditions to get a favorable result.
Lastly, if you are selling it directly as the homeowner (FSBO), it can be more challenging to manage the process than to engage a real estate agent.
If you choose the private sale option for selling a house, you will have greater options regarding setting a fixed price or choosing a deadline to make the sale by. You will also have vastly more time to review bids from potential buyers and have a flexible bidding process that may get you more bidders than if you had gone to auction.
However, this can be a double-edged sword. The process will typically take longer as potential buyers and bids will be over a more extensive timeframe. During this period, the interest from those buyers may vary as time changes. This might lead to confusion while comparing those bids. In practice, first received offers are from the motivated buyers, so real estate agents usually advise to go ahead with those offers. Bear in mind that as the property stays longer in the market, there are always changes local market shifts might happen. For example, more properties might be listed, leading to more supply and eventually decreasing prices.
On the other hand, your advertising and marketing campaign won’t be as intense, meaning you’ll be saving money either yourself or through your real estate agent. Lastly, if you choose to manage the sale of your house yourself (FSBO), it is a lot easier when choosing this method.
Selling a house through smarter decisions
You are making the correct decision to learn more about the process of selling your house fast in NSW. It doesn’t have to be a daunting procedure. When you equip yourself with the correct information, you can make smarter decisions to make you happier with the outcome. If you would like to learn more advice and information on selling a house, please contact us below and sign up for our free newsletter.