Stop right there!
Before you do anything else:
No one should sell property in Victoria without a clear understanding of the sales process and what fees agents charge.
As the sale of a property is regulated by state government, the process and respective charges significantly vary across the country and even within the state.
We think you will agree that the more support you find, the easier the process will be.
For this reason, we have decided to share our experience of assisting property owners to find good real estate agents in Melbourne.
This resource is a helpful guide to demonstrate what agents generally charge and the process more broadly.
So, let’s take a closer look:
Select Selling or Renting (in map) to show correct type of commission rate for your situation.
The figures shown are an average. Agents charge different amounts based on a range of factors including property, price and likelihood to sell.
It is important to know how much commission an agent in VIC charges as it varies in accordance to the geographical area.
We have found that VIC agents generally charge between 1.6% and 3% to sell a house or unit, with the average VIC commission around 2.14 %.
This means that the sale of a $500,000 property will have to pay $10,700 in commission, the third lowest in the country.
Not bad at all!
The specific commission rate varies depending on whether the property is located in a metropolitan or regional area.
Our research shows that in city and metropolitan areas where property prices are high and agents are more competitive, prices range between 1.6% and 2.5%.
In regional areas, where properties generally take longer to sell and values are not as great, commission rates are between 2.5% and 3%.
Making the decision to sell your property privately or use an agent is not one that should be taken lightly.
Because of this:
You need to weigh up the pros and cons of both choices carefully.
A real estate agent sells property for a living, so they are experienced in the whole process and can also offer you legal protection during the entire procedure.
They can help you with:
Managing the property sales process privately requires you to, not only have the knowledge of the entire sales process, but can also cost you more financially.
Agents have access to bulk purchasing marketing deals and the knowledge to help price your property correctly so that it will sell.
But that’s not all:
They also have access to a wide database of potential buyers to whom they can introduce your property.
If you haven’t read our latest post on how to compare real estate agents, you can read it here.
Were you aware?
VIC does not have any State based industry or Government guidelines and regulations.
This means that you can negotiate your own commission fee and any other fees or expenses.
With the average commission rates for metropolitan and city areas around 1.6% and 2.5% and for regional areas around 2.5% to 3%, there is a lot of scope for you to negotiate the price you will need to pay.
Use the Victorian real estate agent fee calculator below to determine how much it will cost to sell your property.
Amounts calculated include 10% GST but exclude other costs an agent may charge such as advertising and marketing.
Let me show you what we are talking about:
Enter your property value and local agent fee percentage.
To promote and sell your home, a VIC real estate agent may also charge the following:
There are three dominant property selling websites in VIC.
Listing a property for sale on any of these sites does come with a cost
It is well worth the investment.
Fees on realestate.com.au can range from around $400 for a standard listing, up to $8,000 for Premier listings in high-value suburbs such as Toorak.
This includes publications such as newspapers and magazines.
National newspapers such as the Herald Sun and The Age will focus on attracting buyers from a wider area.
In contrast, local publications will attract local buyers. Here are a few suggestions:
The prices and effectiveness vary and will depend on your property’s target demographic and the type of advertising you and your agent agree upon.
An advertisement in a national paper will cost you between $550 and $7500.
We suggest using:
Some of these options, however, may prove costly.
Preparing your property for sale is essential if you want to achieve a great price.
When potential buyers visit your property or see photographs of it, they instantly form an impression of it.
Achieving a positive impression requires the seller to pay attention to detail and assists potential buyers by providing professional photographs and floor plans of their property.
Now before I go on:
Engaging a professional photographer to take pictures of your property is a great investment. Photographs can both encourage online buyers to view your property in person and also help as a reminder to buyers who have already visited your property.
Before the photographer arrives to photograph your property, ensure the property is clean, tidy and well presented.
Replacing family photographs with general artwork will avoid your holiday photos being seen by everybody on the internet.
A professional floor plan can help make or break a sale.
A floor plan helps viewers of your property remember the layout and physical features of it. It can also help with creating a picture in the mind of online viewers of your property and will encourage them to see it in person.
Selling property in VIC involves 14 stages, some of which have their own specific costs.
Prepare either the Form 1 Contract Note or the Form 2 Contract for Sale of Real Estate.
The Form 1 Contract Note contains:
The Form 2 Contract for Sale of Real Estate is a more detailed and complex legal document, requiring the seller’s solicitor or real estate agent to prepare it.
The seller must give a signed and dated seller’s statement (Section 32 Notice) to the agent to show to potential purchasers. The seller’s statement should contain information such as:
For land that is not under the Transfer of Land Act, the last conveyance within the chain of title to the land or any other document that provides evidence with regards to the seller’s title to the land is required.
The seller or the seller’s solicitor/conveyancer should prepare this statement.
If the information is either incorrect or not disclosed, then the purchaser can revoke the contract.
This is the phase where an interested purchaser makes an offer which the seller may or may not accept. Alternatively, they could enter into negotiations over the price and terms of the sale.
The third stage involves the purchaser paying a holding deposit to the seller or seller’s agent.
Generally non-refundable, a holding deposit is given as a sign of good faith and to show genuine interest in purchasing the property.
The fourth stage is when the property is put up for sale at an auction.
Both the seller and the purchaser have pre-auction requirements they need to complete.
Essential to the process:
The seller’s solicitor or conveyancer should make sure that everything is in order by examining the sale contract. The purchaser should have had their finances arranged and all necessary property inspections completed.
A reserve price is set by the seller. It is not usually known by the purchaser.
What is the reserve price?
It is the lowest price the seller is willing to accept.
If the highest bids at the auction were below the reserve price, the seller’s agent would then either try to negotiate a price with the interested parties or just put the property back on the regular market.
Auction costs may be in addition to the agent’s commission.
The fifth stage involves the exchanging contracts and paying a deposit.
In Victoria, the seller and purchaser each sign one copy of the contract, usually with the real estate agent then exchange the copies. The deposit is normally around 10% of the purchase price with Lender’s Mortgage Insurance or 20% without the Lender’s Mortgage Insurance.
The sixth stage is where the purchasers may choose to take out insurance on the property before settlement. While the seller is responsible for any damage before settlement, the purchaser may choose the option to reduce their level of risk.
During this stage, the purchaser could revoke the contract before the end of the cooling off period.
Now, pay attention:
In Victoria, the cooling off period is three business days from the exchange where no waiver is allowed.
It would not apply:
In the case of revocation:
The purchaser forfeits the greater of $100 or 0.2% of the purchase price.
The eighth stage is with regards to the transfer of property title where the purchaser’s solicitor or conveyancer:
The purchaser’s solicitor or conveyancer then sees to it that the transfer is sent to the seller’s solicitor or conveyancer for the seller to sign. The cost for this is usually included in the final settlement fee.
The time for completion varies from state to state unless it is set by agreement between the seller and purchaser.
The time needed for completion of “off the plan” purchases could be quite lengthy, with the average time in Victoria being 60 days.
The purchaser’s solicitor or conveyancer then sends out a list of formal questions about the property called requisitions on title.
The details acquired are with regards to the seller’s information, which may not have been disclosed or even discovered during the inspection of the property. The seller’s solicitor or conveyancer then replies to these questions. These questions are to determine various factors such as:
One important caveat:
In such situations, if they are not replied to satisfactorily as disclosed in the sale contract, then the purchaser has the opportunity to revoke the contract, sue for damages or seek a reduction in the sale price.
The cost of requisitions is usually included in the final payment fee.
Let’s not forget:
If the seller has a mortgage over the property, the mortgagee should be contacted so a payout figure can be obtained. The mortgagee should also attend at settlement to hand over a discharge of mortgage, as well as the certificate of title or title deed.
During settlement time, adjustments are made. These include:
Adjustments are usually paid by the purchaser as the seller will have paid any rates or tax in advance for the property.
Settlement is the day when the solicitors, mortgagees, and conveyancers meet to hand over the title documents including Statement for Goods Transferred with ResidentialLand or Land Use Entitlement in exchange for payment.
The sale becomes settled or completed only when the purchaser pays the balance of the purchase money plus or minus adjustments to the seller.
During the date of settlement, a final search of the title is obtained in order to make sure that the property is cleared from any obstacle or interest that may have been accounted for between the date of exchange and settlement.
Upon settlement the final fees owed to both the purchaser’s and the seller’s solicitor or conveyancer is due. These fees may depend on the type of property.
The purchaser or purchaser’s mortgagee then registers the transfer documents with the Land Titles Office where there will be:
The Land Titles Office then advises the relevant authorities that the property has a new owner.
But that’s not all:
Here are two websites that can also provide you with useful information on the sales process:
On the Consumer website, you will be able to view articles, videos and checklists on both selling and buying a property. This includes more details about the planning you need to do when preparing to sell your property and the different methods that can be used to sell it.
The main aim of The Real Estate Institute of Victoria is to act as an agent advocacy organisation. Formed in 1985, the REIV works towards ensuring a high level of professionalism within the real estate industry. On their website, you will find information on median house prices, auction results and market indicators.
If you’d like an insider’s guide to selling your home, then you’re in for a treat.
So take the next step:
It’s jam packed with useful information including:
Here is your insiders guide for download
One of our friendly, Australian agent comparison consultants will get in touch to see if we can assist further.