How much does it cost to sell a house in Victoria?

Selling a house in Victoria involves more than the agent's commission. There are legal and conveyancing costs, the cost of preparing the Section 32 Vendor Statement, marketing, mortgage discharge fees, certificates, and adjustments at settlement. None of these are surprises if you plan for them — but they are easy to underestimate if you only look at the headline commission rate.

This article walks through the main costs a Victorian seller typically encounters, why they vary from sale to sale, and the kinds of questions worth asking before signing an agency agreement or contract. It is general information about the conveyancing and transactional side of selling a home in Victoria; it is not tax, accounting or financial advice.

The main costs of selling a house

Most Victorian sales involve a similar set of cost categories, even though the actual numbers move around. Broadly, sellers should budget for:

• conveyancing or legal fees, plus disbursements;
• preparation of the Section 32 Vendor Statement and the supporting certificates;
• real estate agent commission;
• marketing and advertising — and, where relevant, auctioneer costs;
• discharge of mortgage fees charged by the lender;
• settlement adjustments for rates, water and owners corporation fees;
• moving, cleaning, minor repairs and presentation costs.

How much each of these adds up to depends on the property, the contract, the agency agreement, the mortgage and the complexity of the transaction. Specific fees vary by provider and by matter, so the figures below are framed as categories to plan for rather than a fixed price list.

Conveyancing and legal costs

A seller's conveyancing scope usually includes preparing or reviewing the contract of sale, preparing the Section 32 Vendor Statement, ordering the certificates required for that statement, dealing with the buyer's conveyancer or lawyer, coordinating with the discharging mortgagee, and attending to electronic settlement through PEXA.

The professional fee is the firm's charge for that work. Disbursements are the third-party costs incurred on the seller's behalf — chiefly the certificates needed to compile the Section 32 and the PEXA transaction fee at settlement. Comparing quotes on a like-for-like basis means looking at the professional fee and the expected disbursements together, not just the headline figure.

Section 32 Vendor Statement costs

The Section 32 is a mandatory pre-contract disclosure document. It must include current information about title, mortgages, outgoings, notices, planning, building permits in the last seven years, services and other matters set out in the Sale of Land Act 1962 (Vic).

Compiling it requires a set of certificates — title search and plan, council and water authority certificates, land tax, planning, and owners corporation certificates where the property is part of one. These certificates are usually treated as disbursements on top of the professional fee. They are unavoidable: a Section 32 that is missing required information can give the buyer rescission rights, which is a much larger cost than getting the certificates in the first place.

Agent commission and marketing

Estate agent commission is usually the single largest selling cost. It is negotiated in the agency agreement and is typically expressed as a percentage of the sale price, sometimes with a tiered or incentive structure above a target price. Rates vary between agents and between locations, so the commission on a particular property is a matter for the agency agreement rather than a fixed market figure.

Marketing and advertising are typically separate from commission. Photography, floor plans, signboard, online portal listings, print and brochures are usually invoiced as a marketing package and may be payable whether or not the property ultimately sells. If the property is being sold by auction, auctioneer fees may also apply.

Read the agency agreement carefully before signing. It sets the commission, the marketing spend, the agency period, the conjunction arrangements and what happens if the agency is terminated or the property is withdrawn. A property lawyer can review the agreement alongside the contract of sale.

Mortgage discharge and title costs

If there is a mortgage on the property, the lender will charge a discharge fee to release it at settlement. The exact amount is set by the lender and is disclosed in the discharge documentation. There may also be Land Use Victoria registration fees associated with the discharge and the transfer.

Where the loan is a fixed-rate loan, breaking it before its term can attract a break cost from the lender. That is not strictly a conveyancing cost, but it is a real cost of selling and worth confirming with the lender well before settlement.

Settlement adjustments

At settlement, the price is adjusted so that the seller pays for the period they owned the property and the buyer pays for the period they will own it. The usual adjustments are council rates, water rates and, where applicable, owners corporation fees and land tax. Depending on the timing of the sale, some of these may have been paid in advance — in which case the seller is reimbursed at settlement — or may be in arrears, in which case the seller is debited.

Settlement adjustments are not extra fees; they are an allocation of property outgoings between seller and buyer. They do, however, change the net amount the seller receives, so it is worth understanding them before settlement day.

Other practical costs sellers often forget

• moving costs — removalists, packing materials, temporary storage;
• cleaning, gardening and minor repairs to present the property well;
• styling or staging where the agent recommends it;
• utility disconnection or final readings;
• insurance through to settlement — sellers usually maintain cover until risk passes.

Tax issues to ask your accountant about

Tax is its own discipline and depends on the seller's circumstances. For most owner-occupiers, the main residence exemption from capital gains tax (CGT) applies, but the position changes if the property has been rented out, used to produce income, or held by a trust, company or self-managed superannuation fund. Investment properties usually have CGT consequences. GST can also be relevant in unusual cases — for example, new residential property or certain commercial scenarios.

This article does not provide tax, accounting or financial advice. Sellers should discuss CGT, GST and any other tax issues with their accountant or registered tax adviser before signing a contract, particularly for investment properties, business-related properties or sales involving a trust, company or SMSF.

Why costs vary between sales

Two sales on the same street can have meaningfully different cost profiles. The property type, the title (subdivided land, owners corporation, easements, caveats), the contract structure (auction or private sale, special conditions, long settlement), the agency agreement, the lender's discharge process and the complexity of the buyer's side all change the work involved.

A quote that looks unusually low often achieves it by narrowing the scope or excluding disbursements from the headline. The most useful comparison is scope-for-scope: what is included, who is doing the work, and what happens if a problem arises before or at settlement.

Questions to ask before signing an agency agreement or contract

• what is the commission and how is it calculated, including any incentive above a target price?
• what is the marketing spend, what does it cover, and is it payable if the property does not sell?
• what is the agency period, and what happens if the agreement is terminated or the property is withdrawn?
• what is included in the conveyancing professional fee, and which disbursements are estimated separately?
• who will actually prepare the Section 32 and run the file day-to-day?
• what is the discharge process and fee with the current lender, and is there a fixed-rate break cost to confirm?
• are there any unusual title or owners corporation issues likely to add work?
• have all CGT and (where relevant) GST questions been discussed with an accountant before signing?

Key takeaways

• Agent commission is usually the largest cost, but it is not the only one.
• Conveyancing has a professional fee plus disbursements — including the certificates for the Section 32.
• Marketing, auctioneer and mortgage discharge fees are real costs that should be planned for.
• Settlement adjustments allocate outgoings between seller and buyer; they change the net proceeds.
• Tax issues — CGT and sometimes GST — are for an accountant, not a conveyancer.
• Costs vary with the property, the contract, the agency agreement and the complexity of the transaction.
• Review the agency agreement and the contract of sale carefully before signing.