Are you considering selling your family home and downsizing to a more manageable space?
This guide will walk you through the process of unlocking the equity in your current home and uncovering your potential profits while considering all associated costs and important factors.
The Costs of Selling Your Home
Home Improvements and Repairs
To make your home attractive to buyers, you might need to invest in some upgrades. These improvements can significantly increase your home’s sale price, but the costs can vary widely:
- Cosmetic Upgrades: A fresh coat of paint, a tidy garden, or modernizing the kitchen or bathroom can range from $5,000 to over $20,000, depending on the extent of the work needed.
- Necessary Repairs: Older homes might require essential repairs such as new smoke alarms, RCDs, or fixing leaking taps before they can be sold.
Real Estate Agent Fees
Real estate agent fees are typically around 2.5% inc GST of the sale price of the home, paid upon settlement. Marketing your property effectively is crucial to achieving a good sale price, so investing in a skilled agent is essential:
- Marketing Costs: Expect to spend around $2,000 to $5,000 for professional photography, online advertising, signboards, brochures, title searches, and administrative fees.
Legal and Administrative Fees
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Conveyancer Fees: You will need a conveyancer to manage the settlement of both the sale and purchase, with costs ranging from $1,000 to $2,500 each (for sale and purchase).
- Mortgage Discharge Fees: If there is still a mortgage on your home, your bank will charge a fee to discharge the mortgage, typically around $300 inclusive of GST.
- Electronic Settlement and Registration Fees: Most settlements in WA are now carried out electronically via PEXA, which carries a fee of a few hundred dollars, along with Landgate’s registration fee for the transfer.
The Costs of Purchasing Your New Home
Initial Costs
- Deposit: You will need to pay a deposit on the purchase of your new home, which can range from $5,000 to $100,000.
Inspections
- Timber Pest and Building Inspection: Conducting an inspection on your new home can cost around $500 and may uncover issues that the seller will need to fix, potentially saving you money in the long run.
Stamp Duty
The biggest cost you need to factor in when purchasing your new property is transfer or stamp duty, calculated on the purchase price of the home:
- Example Calculations:
- $400,000 property: approx. $13,500 in stamp duty
- $1,000,000 property: approx. $42,000 in stamp duty
- $600,000 property: approx. $22,000 in stamp duty
- Stamp duty is payable upon settlement.
Additional Fees for Strata Properties
If you’re buying into a strata complex, be prepared for additional fees:
- Strata Fees: These can range from $300 to over $2,500 per quarter, depending on the amenities offered by the complex.
Moving and Final Preparations
- Moving Costs: You may need to hire a moving company to transport your furniture.
- Cleaning Costs: Hiring a cleaner for a final clean of your home before handing it over to the new owners.
- Insurance: Don’t forget to insure your new property and belongings during the move.
Conclusion
Unlocking the equity in your home and downsizing involves various costs and considerations.
By understanding these expenses, you can make informed decisions and maximize the value you receive from selling your current home and purchasing a new one.
Proper planning and investment in necessary upgrades, marketing, and legal services are key to a successful transition.
Get started today!
Contact Tim Gossage at 0411 284 074 or Daniel-Paul Filippi at 0412 991 361 today to begin the process.