What Are The Costs Involved With Buying And Selling Property In Melbourne?
A large part of my role as a real estate professional is discussing costs involved for both buyers and sellers.
Like it or not, there’s no free options in real estate so it makes good sense to understand what you might need to budget for, regardless of whether you’re a seller or a buyer.
This video segment was pulled from a long interview I did back in Feb 2022, where I answered a heap of frequently asked questions (FAQ) about real estate.
Once you’ve watched the video, let me know your thoughts in the comments below.
Note: The video was filmed in portrait mode rather than landscape, which is why it is narrow rather than wide. For the best viewing experience, I recommend you click the Full Screen mode button.
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So, the question is, what are the costs involved with buying and selling property in the state of Victoria.
Unfortunately it’s not free! 🙂
So very rule of thumb, the seller will pay the commission and the marketing and the buyer will pay the stamp duty.
So best news for sellers, the profit that you make on your home sale is a tax free windfall.
So you do not have to declare that and you don’t have to pay any government duties on that.
Which is for now. Hopefully they keep it like that.
When it comes to the sales side, you’re going to in our marketplace here in 3977 and surrounds, you’re going to be having the majority of the agents are going to be charging two fees.
One will be for the marketing of your property, and the other will be the commission.
Some agents are charging the marketing upfront and asking for that to be paid in advance before they spend it on your behalf.
And some are factoring it out, I suppose, is probably the best way of putting it where they’re on-selling that to a third party.
And as the seller, you’re essentially signing a little bit of a finance contract with a third party provider, okay.
We here at Mooney & Co, we don’t do either of those.
We redeem all of our expenditure at settlement, or if the property is withdrawn from sale then a marketing invoice is due and payable at that point.
The other thing to remember too, is that it comes paid when your money is released.
So if as a seller you apply for an earlier release of your deposit, the selling fees do come out of those monies as well. Okay?
So you don’t necessarily get all of the money released for you at that at time.
Buyers: stamp duty.
Now this is the bane of every buyer’s existence. It is a very big part of conversations that we have when we are negotiating with buyers, because they’re always factoring in but I have to pay stamp duty.
Unfortunately in Victoria, we are and do have the highest stamp duty percentage in the country.
That is just a fact. We can’t change that. There are talks about things potentially changing, but as it stands at the moment, even though it’s not a fixed percentage, if you were to allow around about 5.5% on top of the offer price, you’d be well covered with what the stamp duty costs are going to be.