Selling a house involves crucial financial considerations. Real estate agent commissions, hidden charges, auctioneer fees (if auctioning), and marketing expenses are key factors. Prioritize property preparation, monitor market conditions, and consult legal and tax professionals to navigate the process effectively. Research agents, negotiate commissions, and maintain open communication for a smooth selling experience. Seek advice from real estate professionals or financial advisors tailored to your situation.
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“When selling a house, what the things I should be aware of? What is the average land agent commission? How do you negotiate this? What percentage of commission is considered good and average and high? Are there any hidden charges I should be aware of? If selling as auction, what should be the auctioneer fees? What kind of marketing package worth it?Cheers,”
(Original question on Reddit)
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Selling a house is a significant financial transaction, and there are several important considerations to be aware of when preparing to sell your property. Here are some key points to keep in mind:
Real Estate Agent Commission
Real estate agent commissions can vary widely depending on your location and the agent’s experience. The average real estate commission in New Zealand for residential properties mostly ranges from 2.95% to 3.95% of a sale price but only up to the first $400-$500k. This reduces to around 2%-2.5% for the remainder of the sale price. Commissions are always negotiable, so you can negotiate by comparing the rates from several agents, considering the market and season, to reduce the commission fee and save you money.
Hidden Charges
While the commission is a significant cost, other fees may be associated with selling a house. These can include marketing expenses, staging costs, professional photography, and closing costs. Discuss these potential expenses with your agent upfront.
Auctioneer Fees (If Selling at Auction)
If you choose to sell your house at auction, you will need an auctioneer to conduct the auction. Auctioneer fees can vary, so discussing these fees with the auctioneer in advance is essential.
Marketing Package
A good marketing package is important in selling a house as it can increase your chances of selling your listing. It should include services like professional photography, social media advertising, and impactful copywriting. However, be aware of the costs involved. Some marketing expenses may be included in your agent’s commission, while others may be additional costs. You should ask your agent for a breakdown of the costs of your property marketing plan.
Preparing Your Property
Invest time and effort in making your property look its best. This may include cleaning, repairs, and staging to make it more appealing to potential buyers.
Timing and Market Conditions
Keep an eye on local real estate market conditions. Timing can impact how quickly your property sells and the final sale price.
Legal and Tax Implications
Consult with legal and tax professionals to understand the legal and tax implications of selling your property. This can include capital gains taxes and other obligations.
The choice of a real estate agent and the commission negotiation are significant aspects of the selling process. Research and speak with different agents to ensure you are comfortable with their terms and services. Additionally, transparency and communication with your agent are essential throughout the selling process to avoid surprises or hidden fees.
It’s important to consult with a real estate professional or a financial advisor to understand all the costs and processes involved in selling a house. They can provide personalised advice based on your specific situation.
Hope this helps.
Regards, Clive Fernandes (Financial Adviser)
Director – National Capital
Disclosure: I am the director of National Capital, a KiwiSaver advice firm. The information in this post is only general in nature and is not personalised financial advice. Please contact us if you want financial advice.
