The Weekly FAQ: advice on buying, selling and renting property

Selling

Q: I’m putting my house for auction soon, I have sold before but it was privately. What costs are there associated with going to auction?

A: Well, the first and most obvious cost would be for an auctioneer. Costs can range from ‘free’ to about $1000. If the auctioneer is ‘free’ their fee will come out of the commission you pay the agent. It’s also important that the auctioneer is licensed (no cowboys), you can check their credentials online.  

Secondly, and perhaps less obvious is marketing. If you want to attract enough buyers to create a lively and competitive auction, you need to market extensively and well in advance of the auction. The cost depends on what channels you choose to use, but a general rule of thumb is half a percent to one percent of the value of your home. If your home is valued at $500,000, then the spread is between $2500 - $5000.

For a more detailed breakdown of the costs involved, have a read of this article: How much does an auctioneer cost?

Buying

Q: I’m interested in putting an offer on a house next week (private sale). Unfortunately I don’t have the 10% deposit yet, I have sold my own home, but it has not yet settled. I have heard a little about deposit bonds, is this a viable option for me?

A: The short answer is yes it’s a viable option. Let me explain, a deposit bond is an alternative if you do not have the cash deposit of 10% right now. Essentially it’s an insurance policy. This document tells the vendor if you’re unable to pay the purchase price at settlement, the deposit bond issuer will step in and pay the 10% deposit to them.

After that they will recover this amount from you. If all goes to plan you just pay the full price at settlement and the deposit bond is given back to you from the agent so you can rip it up.

Costs for a 3 month term on a $50,000 deposit is around $650.

Renting

Q: We just applied for a rental property that has a lovely backyard with nice lawn, veggie patch and a few big trees. What is our responsibility with maintenance as tenants?

A: Lucky for you, unless it has been specified in the contract, the tenants are responsible for the general maintenance of the garden. Which means you get to spend your weekends looking after that nice lawn. It should be kept in a similar condition to when you first started renting. Of course if any bigger issues arise, like a tree needs lopping then you should discuss with your agent as the landlord should cover these costs.

Do you have something you want answered? Drop us a line!