How much does it cost to sell?

S

SarahC

I feel a bit bad posting about selling property, when most people are talking about buying! Hope this is not irrelevant or boring!!

I'm trying to get an idea of what fees and charges will be involved when my property sells (if it ever does!!). Just say I'm able to sell it for $290,000 - how much is the tax man and the lawyers, accountants, etc, etc, going to take away from that? And how much do you think I would be left with??

After all said and done, I need $270,000 in my hand in order to pay off my loan at the bank. So, in order to acheive this, what could be the lowest selling price that I could go to??

:confused:
 
Is your house for sale the one in your signature? If so why didn't you check the costs of selling before advertising through a RE agent??? :confused:

Has your agent not told you his comission??

I can recommend these guys for a no comission sale..

http://www.reddirect.com.au/
 
Sarah

Standard REA commission in Queensland is $900 for the first $18,000, then 2.5% on the balance of the sale price above $18,000. There are agencies - such as GoGecko - who charge less in commission (disclaimer: I am in no way connected to GoGecko, and am not necessarily recommending them - this is for info only!).

Solicitor's/conveyancing costs vary - somewhere between $800 and $1800 should see you through (I haven't sold a property for several years, so maybe someone else could provide up-to-date figures?).

The ATO will want CGT on any gain - can't help you there, as I have no idea of your cost base, but if you're selling after owning the property for 12 months or more, then CGT is payable at your marginal tax rate on half the profit (don't forget to take into account buying and selling costs when doing this calculation).

From the info you have provided, it would not be possible to work out what your minimum selling price would be. The market in SE Queensland has cooled considerably in the past several months, particularly in the 'outer ring', and friends who live around the Morayfield/Caboolture/Griffin area have said there are a larger-than-usual number of properties currently for sale. Maybe other forumites (who are more familiar that I am with the area) may have more local knowledge.

Cheers
LynnH
 
what could be the lowest selling price that I could go to??
Click to expand...

It's usually pretty close to the highest price the Buyers are willing to go up to.

The Buyers don't care a jot about ;

  • How much your loan is
  • What you need to pay the Bank back
  • What fees and charges you will incur
 
Hi, thanks for the responses!

Yes, I realise that the buyers don't care. But the question is, what's the lowest price I can accept without making a loss (regardless of what's on offer!!)

vbplease - yep that's the one I'm trying to sell. The agent did tell me the commission - the standard qld rate, so that's ok. It's just the other stuff I don't know. But I figured that $20K should give me enough of a buffer!! Thanks for the link too :)

bailz66 - it's an investment property. I don't think capital gains will be toooo much of an issue, because at this stage, I think I would be extreeemely lucky to make any gain at all. I'm just concerned at the moment about not making a loss.

LynnH - thanks for the info! And yes, there are a lot of properties for sale in the area! My place is in a gated complex of 35 townhouses, and out of those 8 are for sale at the moment!! Yikes! Apparently though mine is the only one that has a "for sale" board out the front (weird), and I'm holding an open for inspection in a couple of weeks time (18th Oct) - so hoping that will make mine stand out a little...
 
My goodness.... the photos on the ad are..... how shall I say it..... "somewhat wanting"......:( A toilet, bathroom, a garage door, a corridor, and stairs.......

Cheers,

The Y-man
 
I'd buy the one for $269,000 with the much nicer photos that looks exactly the same as yours. Bargain! Or one of the other almost-identical ones for $280,000!

Oh wait, you're selling ...

You're screwed, aren't you?

Any reason you *need* to sell? Why not just hang onto it? Half the suburb is identical to yours, and yours is the most expensive of the identical ones ...
 
SarahC said:
Apparently though mine is the only one that has a "for sale" board out the front (weird), and I'm holding an open for inspection in a couple of weeks time (18th Oct) - so hoping that will make mine stand out a little...
Click to expand...

Considering the location is a gated complex (away from random passing traffic) how much benefit is the for sale sign? I hope that wasn't a large additional cost (to you)...?

I agree with Y-mans comment about the photos, they are shockingly bad.

Looking through the other adverts for property in the complex yours would be the obvious one to skip (from a buyers perspective), it's $10-20k more and there are no decent internal shots.

With a $270k loan @ 9.37%, receiving $290pw, you would be negatively geared to the tune of around $1000 per month, keep this in mind when negotiating with buyers, it's no point not accepting an offer that is slightly too low if you don't receive another competitive offer for 3 months and lose another $3000 in the process.
 
Your real estate agent must have a seeing eye dog that leads him around. The front of the house shows a garage with a dinky front door and the rest of the photo's.... Why would anyone want to purchase it?
 
Thanks for all that feedback!! Much appreciated, though it's not exactly what I wanted to hear :eek:

manderson - just had a look at the links you posted. Yes, they're all in the same block. I knew there was about 8 up for sale in there, but hadn't looked into which ones they are or the prices. From looking at that, it would appear that $279,950 would be the go!! Particularly since a couple have already sold (well, it says under contract/under offer, I guess that means it's sold) at that price. The only difference I can see between those and mine is that I'm getting a higher rent of $290 as opposed to around $270 :confused:

I'm a bit offended at the comment about the photos.... most of them I took myself when I was up there, before any tenants moved in. The photo of the staircase is NOT in my property, I have no idea who took that or where it came from!! The outside pics my agent would have taken :eek:

hobo-jo - you are right, the negative gearing is extreme. Maybe I would be better off lowering my price and counting my losses. I just wish I knew the magnitude of the loss I could expect, like, just say I sold at $280,000 ish...

RumpledElf - yes there is a very compelling reason that I *need* to sell. I absolutely hate my job!! To the degree that it's making me sick being here (oops, yes, I'm at work at the moment!). I have a specialist appointment lined up for next week so sort out what's wrong with me, but I think that it all stems from the fact that I hate my life!! Anyway, I want to leave so I can focus my attention on a business that I'm trying to launch. I can't leave while the bank is still charging me $2,000 in interest every month :(

Thanks again for all the responses - you guys are great!
 
To put your investment into perspective i recently had a property in morayfield valued

2x3bed duplexes one title = $415k bank val
Age = 12 years old
Land size = 1800sqmtrs

When did you purchase your duplex?

Honestly the amount of stock there is in Morayfield at the moment I think it's a terrrrrible time to be selling! IF you must you need to calculate

SELLING PRICE minus SELLING FEES minus CGT equals BANK DEBT


CGT = Profit @ your marginal tax Rate

if you held the property for more than a year

CGT = 1/2 profit @ your marginal tax rate


you will have to play around with different selling scenarios to calculate it

if your selling price is going to be unrealistic you may have to think about taking a loss on the property which means putting up some cash to pay off the bank debt.
 
stumunro said:
SELLING PRICE minus SELLING FEES minus CGT equals BANK DEBT
Click to expand...

Hi stumunro. Yep, that eqation is the bit that I've been stuggling with. Because I have no idea of the selling fees. I know the commission, but that's about it. :confused:

I'm pretty sure I won't have to worry about CGT, as I don't think there's much possibility of making a gain!

Can you claim it on tax if you make a loss??

I bought the place in July 2006 at $259,000. Well when I say "bought" I mean that's when I signed the contract. Actual settlement wasn't until July 07.
 
SarahC said:
Hi stumunro. Yep, that eqation is the bit that I've been stuggling with. Because I have no idea of the selling fees. I know the commission, but that's about it. :confused:

I'm pretty sure I won't have to worry about CGT, as I don't think there's much possibility of making a gain!

Can you claim it on tax if you make a loss??

I bought the place in July 2006 at $259,000. Well when I say "bought" I mean that's when I signed the contract. Actual settlement wasn't until July 07.
Click to expand...

Your selling fees = R/E Commissions + Advertising Expenses

They will calculate your CGT on your contract date.

Also, How much deposit did you pay when you bought place? If it was a 5% deposit you may have enough equity in there to cover the selling costs.


Here is a CGT booklet by bantacs which might help
http://www.bantacs.com.au/booklets/Capital_Gains_Tax_Booklet.pdf

Selling fees can be claimed against the cost base of the property.

I've ripped this from the booklet for easy reference

If you purchased the property after 13th May, 1997 depreciation claimable for the building reduces your cost base before applying the 50% discount. Let’s say the building depreciation was $10,000. The original costs base of the property was $100,000, selling costs were $5,000 and the property sold for $200,000 the calculation would be as follows:

Original Cost $100,000
Add: Selling Costs $5,000
$105,000
Less: Building Depreciation Claimable $10,000
Cost Base $95,000

Selling Price $200,000
Capital Gain $105,000
Less: Any Carried forward Capital Losses = 0
$105,000
Less 50% Capital Gains Tax Discount $52,500

Amount to be included in tax return $52,500 ie added to normal wages
Note: in some circumstances you may have to reduce the cost base of the property by the building depreciation you could have claimed even though you didn’t. There is more detail about this in our Rental
Property Booklet.
Click to expand...
 
Hi Sarah,
I feel that unless you are prepared to suffer a loss the likelyhood of your townhouse selling is slim at best. A quick check on RP Data shows that there have only been 8 sales of townhouses in the last 6 months in Morayfield and 6 of those have been lowsets (perhaps elderly) combine this with the fact that there are currently 22 listed for sale on Real Estate.com and it would appear that there is over 2 years supply based on current trends.

The only way to dispose of your property is to make it more attractive than the rest on the market.
 
SarahC said:
RumpledElf - yes there is a very compelling reason that I *need* to sell. I absolutely hate my job!! To the degree that it's making me sick being here (oops, yes, I'm at work at the moment!). I have a specialist appointment lined up for next week so sort out what's wrong with me, but I think that it all stems from the fact that I hate my life!! Anyway, I want to leave so I can focus my attention on a business that I'm trying to launch. I can't leave while the bank is still charging me $2,000 in interest every month :(
Click to expand...
Oh, I had that same thing. I quit work and moved to the bush, just taking us a bit longer than we would have liked to get that business up and going (so we've digressed a bit in the meantime, taken out an ad in the yellow pages and got into real estate to make some money). Anyway, after I quit work my health improved dramatically ... I gained 8kg, quit biting my nails, and the weight gain or something else had all these fantastic side effects, like I looked better, felt better, I'm no longer getting really sick for weeks and weeks at a time several times a year, and the best thing - my eyes improved and I actually had to go trade in my glasses for a pair that was several notches LESS strong :D

Nice happy stress-free laid-back lifestyle is bloody fantastic. Although unlike you, we've bought a house to fund ours rather than as a money bleed, we got one that'll be positively gained if we rent it out, and a big profit if we sell it, just need to be creative about finding some money to finish it all off.
 
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