ARE you considering selling your family home and downsizing to a more manageable space and enjoying some freed up cashflow, from the equity growth of your existing home?
The Agency can guide you through the process of unlocking the equity and value in your current home. Let them help you discover your potential profits while factoring in all associated costs and important considerations.
Firstly, let’s consider the costs of selling. To make your home attractive to buyers, you might need to invest in some upgrades. This could include a fresh coat of paint, a tidy garden, or even modernizing the kitchen or bathroom. These improvements can significantly increase your home’s sale price, but the costs can range from $5,000 to over $20,000, depending on the extent of the work needed. Additionally, older homes might require repairs such as new smoke alarms, RCDs, or fixing leaking taps before they can be sold.
Real estate agent fees are approximately 2.5 per cent including GST of the sale price of the home, paid on settlement of the property. To market your property, you are generally looking at around $2,000 to $5,000 and this covers items such as professional photography, advertising on the internet, signboards and brochures for the property, title searches and admin fees.
It is vital to the sale price that your property is marketed skilfully and to the widest audience possible, so skimping on the costs of employing an experienced agent and marketing your property can cost you dearly.
You will need a conveyancer to manage the settlement of both the sale and the purchase. Fees are based on either the selling/purchase price of the homes or can be flat fees. Costs vary from $1000 to $2500 each (sale and purchase). If there is still a mortgage on your home, your bank will charge a fee to discharge the mortgage (around $300 inclusive of GST). Most settlements in WA are now carried out electronically via PEXA which carries a fee, again on both the sale and the purchase, usually a few hundred dollars, and Landgate will charge a fee for the registration of the transfer on your new home, again, only a few hundred dollars.
Now onto the costs of purchasing your new home. You will need to pay a deposit on the purchase of your new home – anything between $5000 – $100,000 is the norm.
It’s wise to conduct a timber pest and building inspection on your new home, which can cost around $500. These inspections can uncover issues that the seller will need to fix, potentially saving you money in the long run.
The biggest cost you need to factor in when purchasing your new property is transfer or stamp duty. This is calculated on the purchase price of the home. For example, if you purchase a property for $400,000 stamp duty will be approximately $13,500. For a property worth $600,000 your stamp duty cost will be about $22,000, or $1,000,000 the stamp duty will be about $42,000. Stamp duty is payable upon settlement.
If you’re buying into a strata complex, be prepared for additional fees. Strata fees can range from $300 to over $2,500 per quarter, depending on the amenities offered by the complex.
Finally, will you need to hire someone to move all your furniture? A cleaner to do a final clean on your home? You will also need to insure your new home. If you’re moving into a retirement village, make sure to understand all associated fees and charges.
As you can see there is lots to consider when you’re thinking of downsizing, but the good news is that the team at The Agency can guide you through the process. It all starts with an appraisal on your home where we can give you a report outlining the costs and a guide of what your buying range will be.
Call Tim Gossage on 0411 284 074 or Daniel-Paul Fillipi on 0412 991 361 today to start the process.
