The most important point to understand about fees when selling your home is that no fee should be payable until your home is sold and you are happy with the result and the service.
The first fee should be the agreed amount of Commission. If the agent has done an excellent job, then you may consider approving an additional amount to compensate them for their overall marketing costs. This should be entirely at your discretion.
Beware of costs such as the following (most of which are a rip-off):
Advertising fees – many agents have a minimum charge of several thousand dollars (at least $5,000) for advertising, regardless of whether advertising is needed or not. Also, the higher the median price of homes in your area, the higher can be the cost of advertising. Reject agents who have mandatory advertising fees (which are applicable even if they fail to sell your home).
Administration Fee – as high as $500.
Auctioneer’s Fee – as high as $1,000 and payable regardless of the home being auctioned.
Copywriting fee – As much as $500 to write the advertisement for your home – no matter how badly it’s written.
Professional Photography fee – This will be at least several hundred dollars, all to deceive buyers into seeing your home and being disappointed that the reality does not match the appearance. You’d be better off using your phone to take three or four reasonable (but honest) shots.
Video fee – Another thousand dollars or more so that sellers think they are getting more service.
Translation Fee – Yes, some agents charge hundreds of dollars to translate the advertisement on your home into a foreign language. Google will do it for nothing.
Legal Fees – If you refuse to abide by the conditions of the listing agreement (no matter how unconscionable) many agents will employ lawyers to threaten you. You will be charged for this ‘service’.
Open inspection fee – Some agents charge you for the privilege of sitting at your home for 30 minutes waiting for buyers to show up – whereupon they will charge you thousands of dollars if a buyer falls in love with your home and wants to buy it.
Social media fee – You could be charged for the cost of the agent’s social media consultant.
Drone fee – Another fee often payable to the agent’s mate who got a drone as a birthday present.
Signboard fee – As much as $2,000 for a sign at the front of your property – usually with the name and glamour shot of the agent being prominently displayed.
Caveat Lodgement fee – If you failed to read the listing agreement and did not notice that little clause about an agent being allowed to place a caveat on your home if you refuse to pay some of their fees – whether you consider them unfair or not – you could have a caveat lodged on your home. For this you will be charged a fee. When the caveat is discharged (once the agent is satisfied that you have paid your debt to them) you will pay a discharge fee.
Double Commission fee – If you inadvertently sign up with two agents, both could claim commission from you even though only one sold your home. Yes, agents can claim commission for not selling your home. This is why it is important to read your listing agreement carefully and delete all nasty clauses.
Footnote: The only costs that you should pay in advance are those that have little or nothing to do with the agent. For example, a valuation fee, a building report, legal fees and perhaps renovations and the cost of staging. Be aware that many agents get kickbacks. The more you spend on, say, advertising the more the agent pockets. Look carefully. Kickbacks (usually called “rebates” or “volume discounts”) are often disclosed in the fine print of the Listing Agreement.
*******************
This is an Excerpt from Neil’s latest book “EVERY QUESTION YOU MUST ASK BEFORE YOU SELL YOUR HOME”. To pre-order the full book, click on the cover below.
