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Selling a property in Queensland is a big endeavour involving careful planning and consideration of various costs. It can be a bit overwhelming to keep track of these expenses and create a suitable budget.
In this article, we’ll explore some of the expenses associated with selling a house in Queensland and discuss key elements like real estate commission fees, conveyancing charges, and other additional costs.
By gaining insights into these potential expenses, you can develop a clearer understanding of the financial aspects of selling a property in the Sunshine State.
If you decide to enlist the help of a real estate agent, the commission they charge can play a significant role in your selling expenses. But don't worry, a skilled agent can be your secret weapon, working tirelessly to ensure you get the best possible sale outcome.
According to OpenAgent, In Queensland, real estate agent commissions can take a variety of forms, ranging from a modest 1% to a more substantial 4.5%. However, the average commission rate tends to settle around 2.7%, giving you a solid reference point for your budgeting.
For example, with an average commission rate of 2.7%, the sale of a $1 million property in Queensland could incur agent commission costs of about $27,000.
However, In the regional areas of Queensland, you might find yourself selling that same $1 million property with commission rates that tend to be a little higher. This could translate to agent commission fees ranging from $27,000 to $45,000, showcasing the unique flavour of Queensland's diverse real estate market.
You can take the guesswork out of how much you should be paying with this handy commission rate calculator by OpenAgent.
Conversations with real estate agents in Queensland will inevitably lead to discussions about commissions. The popular choice among sellers often revolves around a fixed commission rate arrangement. However, an intriguing alternative is the use of a tiered commission structure, which can serve as a motivator for your chosen agent to secure an exceptional outcome.
Deciding on the most suitable commission structure for your circumstances really depends on the unique factors surrounding your property sale and the insights offered by your agent.
We elaborate on these differences below:
Fixed commission structure
This is arguably the most popular structure, offering a simple and transparent method for calculating agent commissions. The fixed commission structure involves multiplying the negotiated commission rate by the final sale price to determine the commission payable to your agent.
For instance, let's imagine your property achieves a sale price of $800,000, and you and your agent have mutually agreed upon a commission rate of 2.5%. Using the fixed commission formula, the resulting commission payable would total $20,000 ($800,000 x 2.5%).
This uncomplicated method of calculating commissions brings the same clarity and transparency to both sellers and agents in Queensland.
Tiered commission structure
As mentioned earlier, the tiered commission structure is designed to provide real estate agents with added motivation to secure a higher sale price for your property. This involves establishing distinct commission rates based on specific performance targets that the agent strives to meet.
Typically, you and your agent would agree upon a target sale price, leading to the definition of two commission rates:
Let's consider a scenario where you've successfully sold your property for $1,000,000. With a previously agreed tiered commission structure, the arrangement entails a 1.5% commission rate for amounts below the agreed sale price and a 2.5% commission rate for any portion above it.
Should the sale price fall short of the agreed target, the commission rate stands at 1.5%. This ensures that the agent's efforts are still acknowledged, even if the sale price doesn't meet the initial expectations. In this case, the resulting commission would total $15,000 ($1,000,000 x 0.015).
However, the real incentive comes into play when the sale price exceeds the agreed threshold. For every portion of the sale price surpassing the target, the commission rate elevates to 2.5%. For instance, if your property achieves a sale price of $1,100,000 ($100,000 above the threshold), the agent's additional commission would amount to $2,500 ($100,000 x 0.025).
You can explore how either of these scenarios might unfold for your property using OpenAgent’s commission calculator.
Another important expense that you should be mindful of is the cost associated with conveyancing. Conveyancing holds significant legal importance, involving the process of transferring property ownership from the seller to the buyer.
Unlike fixed charges, conveyancing fees are variable and hinge on factors such as the specific services provided by the conveyancer and the level of legal expertise required for the particular transaction.
In QLD, you can expect to pay anywhere from $500 to $2200 in conveyancing fees. This variance is influenced by several that shape the dynamics of the transaction, including:
To make a well-informed decision, it might be a good idea to engage multiple conveyancers, comparing their offerings and fees to align with your needs. Recommendations from trusted sources, such as family, friends, collaborating agents, and mortgage brokers, can provide valuable insights in this process too.
You should always do your due diligence and check that any conveyancer you are considering working with has a current licence. In QLD, you can check conveyancing licences on the fair trading website.
When it comes to real estate marketing costs, you should be aware that these expenses can vary quite a bit. In QLD, based on the premise that your home is worth $500,000, the recommended budget for advertising and marketing is typically around $2,000-$5,000.
On average, this cost typically amounts to about 0.5% to 1% of the price you're aiming to sell the property for.
You can find out more about these costs here.
However, how much you’ll pay depends on the level of marketing you do and the spaces in which you decide to market including:
These marketing expenses play an important role in attracting potential buyers and creating visibility for your property in the competitive real estate market. It's important to factor in these costs as you plan your overall budget for selling your house in QLD.
A private treaty sale involves you, the homeowner, determining the selling price for your property. Subsequently, your real estate agent engages in personalised negotiations with potential buyers, striving to secure the best deal as closely aligned with your set price as possible.
Unlike auction-based approaches, selling through a private treaty entails no additional expenses since only the agent facilitates the sale, rather than an agent and an auctioneer.
Private treaty sales find favour in areas where auctions are less prevalent. Even in competitive markets, some sellers choose this avenue with confidence in achieving a favourable outcome. Others prefer the private treaty route to evade the heightened pressures often associated with auctions, creating a more relaxed selling experience.
Pros:
Cons:
An auction is a public sale where potential buyers place bids on properties in real-time. If bids surpass a predetermined reserve price (the minimum acceptable selling price), the highest bidder at the auction's conclusion immediately signs the contract to complete the sale.
In QLD, auctioneers can charge anywhere between $400 and $1,000 to sell a house but it may be higher or lower depending on your area and the current market conditions.
Pros:
Cons:
It might then be a good idea to speak to agents about what they would recommend for your property and location.
When it comes to selling, the tender process provides an alternative approach to handling transactions.
Here's the breakdown: potential buyers submit individual offers, typically accompanied by a 5 or 10 percent deposit. After reviewing these offers with your agent, you have the discretion to accept or decline based on your preferences. The cost is determined by the agreed-upon price between you and your agent.
This method is commonly used for high-end residential properties, homes boasting distinct features, or properties with development potential. It's particularly valuable for property types (as mentioned earlier) that may lack a clear market value due to their unique characteristics.
Pros:
Cons:
When you're in the process of selling a property, you might also be navigating the challenge of finding your next home to buy or rent. This can become a point of stress and financial burden, especially when dealing with a market where both sale and rental options are limited.
It's crucial to take these scenarios into account before embarking on the selling journey, ensuring you're well-prepared. Keep in mind that if you're aiming to purchase your next residence and struggle to find a suitable option, you might need to arrange temporary accommodation in the interim. This is an additional cost that should be factored into your considerations.
Many people tend to try and sell first before they even consider buying their next home, or may attempt to buy and sell at the same time and line up settlement dates. It can be done, but it can also be really tricky.
In this particular situation, a bridging loan may be worth considering, allowing you to buy your next home before you sell your current one, which can take enormous stress off you.
You can find out more about bridging loans here, and you can find out more whether you should buy or sell first here.
Doorsteps Finance Pty Ltd ACN 648 541 879 (credit representative no.531036) and Doorsteps Solutions Pty Ltd ACN 654 334 246, Australian Credit Licence 537369 are wholly owned by OpenAgent Pty Ltd ABN 93 161 595 679 (together, “Doorsteps”). Doorsteps are not making any suggestion or recommendation about any particular product or service. Any credit application is subject to approval, terms and conditions, fees and charges.
Doorsteps Finance Pty Ltd ACN 648 541 879 and Doorsteps Solutions Pty Ltd ACN 654 334 246, Australian Credit Licence 537369 are wholly owned by OpenAgent Pty Ltd ABN 93 161 595 679 (together, “Doorsteps”). Doorsteps are not making any suggestion or recommendation about any particular product or service.
Property reports contain property estimate data and information provided by RP Data Pty Ltd trading as CoreLogic Asia Pacific ABN 57 087 759 171 (CoreLogic) and OpenAgent Pty Ltd, which is general in nature. It is not a professional property valuation or advice to be relied upon. The actual market value of the subject property may differ. We and CoreLogic do not warrant the accuracy, currency or completeness of the data and information to the full extent permitted by law, each excludes all loss or damage howsoever arising (including through negligence) in connection with the information. You rely on the property estimate at your own risk.
The calculator output is only an estimate based on the information provided. It is not meant to be a substitute for professional financial advice. While Doorsteps has based the information on sources that we believe are reliable and accurate, the actual commission payable may differ depending on a range of factors outside of our control. For this reason, you should consider the appropriateness of the information and, if necessary, seek appropriate professional advice.
This article is written expressly for education purposes and content is based on the opinions of the authors or as otherwise cited. The information we provide is general in nature and does not take into account your personal objectives or needs. All information is current as at publication release and we take no responsibility for any factors that may change thereafter. Doorsteps does not accept any liability or responsibility whatsoever to any error or omission or any loss or damage of any kind sustained by a person or entity arising from the use of this information.
