Selling Your House
If you’re selling your house that you already own to fund a new purchase. You need to consider the following:
If you are selling your house to finance the purchase of another house you have to allow for the selling costs of that property, because they will reduce the money that you will have available to buy the new house.
These costs can include:
Tidy up Costs – You want the property to look it’s best to maximise the price without spending money you won’t get back. Small repairs and some repainting can easily use up $2000 or more if you do some major work.
Listing and advertising costs – An average spend is considered around $3000. This cost can vary considerably depending on:
Time – The longer you have to run advertisements, the more it costs.
The kind of advertising – Big adverts cost more money.
If you are using an agent and they pass on advertising costs.
Real Estate Agents – There’s a free market on what they charge so it pays to shop around and compare offers. As a general indication real estate fees / real estate commission / agents fees in the Auckland region generally range from 2.95% to 4% of the first $300,000 and then 2% to 2.5% thereafter. A base fee is usually charged regardless of the sale price which ranges from $0 to $500. Then %15 G.S.T is charged on the above percentages and fees.
Subtract the costs – It’s important not to think you can sell your house for X number of dollars, so that’s what I’ve got available to buy the next property, because you have to deduct the selling costs to know what you’re you’re left with to purchase a new property.
Bridging Finance – There can also be bridging finance costs, where you see the property of your dreams and jump in and buy it before selling your house that you currently own, because you don’t want to miss the opportunity. Then you may have to arrange finance for the period between the settlement date on the property you currently own and will sell and the settlement date on the new property you are going to purchase.
You may be able to negotiate a future settlement date and/or add a condition on your Sale and Purchase Agreement offer of selling you current house first. This may be unattractive to the seller of the property you make an offer on though, if they want a quick sale. So the timing can be difficult between buying and selling.
Some think it’s best to sell first then you know how much money you’ve got in the bank to buy the next property. This may involve having to move your belongings into storage somewhere, before moving them again into the new property, which involves costs and an extra move. So the whole process can be stressful.
Continue to part 4 of the Buying A House Guide
Cost Of Living Once You’ve Moved In
Go Back to the start of Buying A House Guide
House Buying Guide page order:
1. Pros And Cons Of Owning Versus Renting.
3. Selling Your House And Then Buying Another One. This Page.