How Much Does it Cost to Sell a House in Sydney and NSW?

1. Real estate agent commission

What percentage do real estate agents charge?

First, let's cover the most obvious cost: How much do real estate agents earn in commission on your property sale? The average commission fee in Australia is around 2% to 2.5% of the sale price. But what percentage do real estate agents charge in NSW? Well, it can vary. The state has an average real estate agent commission of 2.1%. In comparison, Sydney has an average commission of just over 1.8%. It's important to note that different agents may charge different commission rates, so it's always good to ask what do real estate agents charge?

A few things can affect an agent’s commission, such as the type of property we’re working with. Understandably, some agents may charge slightly more for their time and efforts when selling an unusual property that may only appeal to a small buyer pool. Conversely, an agent may be willing to accept a lower cut for a very high-value property as the fee would still be a great day’s work. To put this into perspective, Redfern in Sydney has an average agent commission rate of just over 1.9%, whereas the rural town of Broken Hill carries an average of just 3.5%.

Our cost-saving tip:

Be very wary of the agents known as the “One-Percenters”. We don't mean an area where 1% may legitimately be the average commission rate. This term describes an agent who is a clear undercutter for the area, and like everything, you usually get what you pay for, within reason, of course. This may not seem like a cost-saving tip at first, but it certainly may once you experience first-hand that the cheapest agent can often be the most expensive. It’s never a good idea to choose an agent entirely based on fee alone for this very reason.

A good agent can often make up for their fee and then some. That’s the entire point. With a clear undercutter, though, given agents' massive overheads, you’d wonder if they have enough incentive. If they’re willing to compromise so heavily with you, let’s just hope they’re not doing that with the value of your largest asset in front of your buyer.

There should be many other reasons why any given agent is the clear stand-out for you. In such a competitive industry, if an agent is simply turning to the fee as their point of difference to win all their listings and not showcasing much else, it might be a good idea to look a little closer. We call this sneaky strategy the "churn and burn".

2. Legal Costs

Legal costs when selling property

Next, there are legal costs, most notably, your conveyancing fees. This is probably the one most people are surprised by out of all the costs, as many vendors imagine something exorbitant. Conveyancing costs usually consist of creating the Contract of Sale and soliciting the sale if successful. Some conveyancers will even split these costs and only charge each when appropriate. This can be between $1000 and $2000 for Sydney conveyancing. It's important to budget for these expenses and to know that they may vary depending on the location and type of property you're selling.

Our cost-saving tip:

You should remember this is a conveyancing job, meaning you’ll often find a Solicitor’s fees may be higher than that of a Conveyancer for the same work.

3. Repairs and Renovations

What home improvements add the most value Australia

Then there are home repairs and upgrades that you might need to make to improve the value of your home. This can include painting, flooring, or renovations such as kitchens and bathrooms. Considering these costs is essential and ensuring you are not overspending on unnecessary upgrades. Many vendors fall into the trap of overcapitalizing on renovations while assuming they’ll always get out more than they put in. Let us be the first to tell you; it depends on things like your chosen materials and how far deep you go with this in general.

Our cost-saving tip:

This is a simple one. Make sure you speak with an expert before going down this road. There have been countless times we’ve been invited to appraise a new client’s property that they just finished renovating for selling, but they’ve spared no expense. Sadly, we then must break it to the proud homeowner that they may have overdone it. With that being said, though, it can and will make a property much easier to sell as there will be far fewer objections.

4. Staging costs

Property staging and styling costs

There are also staging costs, such as furniture rental and home cleaning. These are often necessary to make your home look its best for potential buyers. Depending on the property, staging your home can make a huge difference in the final sale price and be worth the investment. Why? Well, if your furniture isn’t quite doing the property justice, or you’re selling a vacant property, it can be much more difficult for a purchaser to imagine the full potential of living in that house.

High-quality furniture can help highlight the layout and flow of the property, while a carefully selected era and colour pallet can amplify its overall feel and charm. No one loves your property as you do, so we do these things to help purchasers feel the same.

Our cost-saving tip:

As staging can cost well into the thousands depending on your chosen furniture type, storeys, and amount of rooms, we have two cost-saving tips. The first is that you don’t always need to stage every room of the house. You can usually get away with showcasing the main rooms, like the main living, dining and master bedroom.

The second tip is there’s a great cost-effective alternative in the form of “digital” staging. This is where the photographer digitally imposes beautiful furniture on the photos. This is usually only doable for rooms that are at least mostly empty, but this can be a good halfway point as the purchaser can better visualise the flow when they first see your property online. They’ll always have that to refer to later on.

On average, digital staging costs less than $100 per photo, so it can be far more cost-effective though the differences are apparent.

5. Marketing costs

Property advertising and marketing costs

Then, there are marketing costs. This covers advertising costs such as these:

• Online portals like realestate.com.au and Domain
• Professional photography
• Videography
• Drones
• Virtual tours
• Property brochures
• Just-listed flyers
• The for-sale sign, etc

These are essential for getting your home in front of as many potential buyers as possible. With the advancement of technology and the internet, it's important to ensure your home is marketed well and reaches a wide audience. This is the number one thing that will impact your result the most. Why? The better a property is advertised, the more buyers are attracted to it. As the old saying goes, "a property is worth what a buyer will pay for it".

Here's a cheat sheet covering how this plays out

More buyers = more competition
More competition = more bids or offers
The more offers… well, the rest is self-explanatory

This should make it crystal-clear that there's no point doing all the other things we’ve covered if only a few people come to see the property. Mostly, the overall marketing cost is often less than the value of one or two bids or offers. It’s such an easy cost to make up for, and you’ll sleep well knowing you gave your property the absolute best chance of success—after all, it's competition that drives price, not the property itself.

Our cost-saving tip:

Not every marketing item will be appropriate for every property type or price point. As agents, we usually have a selection of prebuilt packages suited to different budgets. Ours are all bespoke so that you can chop and change items between packages, so you’re never locked in and overcapitalising or understanding.

6. Situational Expenses

Situational fees - The hidden cost of selling a house

So far, we've covered the more common and non-negotiable expenses. There are also more situational expenses, including but not limited to the following:

• More situational legal fees
• Inspection fees
• Holding costs
• Moving costs
• Capital gains tax
• GST if you’re a company

These costs can add up, and it's essential to be aware of them when you're budgeting to sell your home.

7. The Pay Later Option

Pay-later options in Real Estate

This brings us to our bonus tip: the emergence of pay-later options in Real Estate. You may or may not be aware, but many companies are popping up that offer an option where you can defer any and all costs to settlement. This means you don’t have to pay any of it until the sale is completed, usually for a meagre fee. At the time of writing, the average fee for this service seems to be around 4% of the costs deferred this way, plus monthly interest of around 1.3% after about a 60-day interest-free period.

Each service provider varies slightly, so check with your agent if they offer a service like this.

The advantages of pay-later options in Real Estate

If you're only using this to cover a few costs, it can be a great way to keep the pressure off for what might only be a few hundred dollars in fees. If you're planning on going all-out, this can be the difference between not having the means at all to being able to offer a perfect property with a smooth sale to boot. You can essentially enter the market with no money down.

It’s not uncommon for these companies to fund up to tens of thousands of dollars, and they can often approve it on the same day. It’s not rigorous like a loan; they know you’re about to sell a large asset. Our chosen provider we use for this service is RealtyAssist using their VPA Collect service. They even offer a handy calculator to predict the fees you may be looking at. So the great news for our clients is that they don’t have to go looking or applying for anything. We take care of it all with them on the day.

Over the next few years, we believe this will become the normal way to handle selling costs; you heard it here first!