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Real Estate

Costs Of Selling A Property

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How much does it cost to sell property? A comprehensive list of fees involved

If you bought your house for 100K, and sold it for 100K, considering all fees, you have not broken even. You’ve had buying fees, and selling fees. I’ll run through the various fees & charges involved

Auctioneer / Estate agents / Realtor fees & charges

Auctioneers Percentages

Range from 1% upwards. The good part, is that you don’t feel like you are paying these fees. They are taken out of the sale of the property. 1% Fees are a regular occurrence so I would not pay more than 1%. If you can get the fee of 1% including tax, bite their hand off.

The fee should cover all the work done by the estate agent, listing the property for sale on real estate websites , taking pictures, viewings with potential buyers & managing the bidding process. It is the job of the auctioneer to get you the best price possible and why shouldn’t they? After all, the higher the price, the higher the estate agents commission.

Building Energy Certs

You require an energy cert to sell your property. Always ask your estate agent if they will include a free energy regulation certificate. Some estate agents include this by default. An approximate cost for a BER cert would be 100. It’s not a lot of money, but it all adds up. A BER cert for for a small 1 bedroom apartment would cost a lot less than a BER cert for a big 4 bedroom house.

Solicitors & Legal Fees

Difficult to get a cost here but for a solicitor to sell a property the cost might be approximately 2K. I have seen solicitors buy property fees for 1,900 but no less. I have seen solicitors with sale fees for 1,500 but no less. We have then seen fees added on during the process. Always get an initial break down as best you can before the start. Just ask for an approximate cost from a few solicitors. That way you have a few prices to work off.

“There will be more work involved.”

An indirect way a solicitor tells you they will charge more, unspecified fees.

Beware when a solicitor makes this statement after you have engaged their services

Taxes

Check with your local tax office. Taxes include stamp duty when buying a property. Investors making a profit selling a property must pay capital gains tax, more about this later.

Property Management Agency Fees

If you do one thing, please, please read this article on 2K management agency fees before buying your property.

This is the one charge that can be avoided and if it can be avoided, avoid it.

Always ask if there is a management company in place.

Personally, I would prefer no management fees as there is a chance you could pay 2K per year, or more, and get minimal service. Depending on your mortgage, your fees could be 20% or more. Meaning, if you had 5 bought, you would buy 5, get 1 free.

I’m not saying this is always the case. But paying out 2k per year over a 30 year mortgage is as much as the mortgage itself! I get there are benefits to a management company, but for me, the downside far outweigh any benefits. Again, I highly recommend reading this article on 2K mgmt fees.

Investors Capital Gains Tax

If you buy a rental property and then sell it at a later stage with a profit, you pay capital gains on that profit. E.g. you buy for 100K, then sell for 110K, you pay capital gains tax on your 10K profit. If the current CGT tax rates are 30%, then you pay 30% of 10K = 3K.

SELL OR LET YOUR PROPERTY WITH GAFFCO.CO TODAY!

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