Selling a Home
Nutting out the details
How much do you think your home is worth? Like most Australians you probably think it's more than what it really is. That's why it's important to seek some independent advice on what price you should realistically expect for your home. This section discusses how you can set a price on your home and also takes a look at selling by private treaty or auction.
Setting a price / Property valuations
The first step in selling your property is to establish its value. One method of determining your property's worth is through a property valuation.
Real estate agents can give you a property valuation, but be aware some might give an inflated price just to get your business.
A more accurate way to evaluate your property is to look at the previous sales of similar properties in the area.
You can also pay professional property valuers to come to your property and give you an independent valuation. (You will find many independent property valuers listed on the internet and in your Yellow Pages.)
Selling property - Auction or private treaty
You will need to decide whether you want to sell your property by private treaty or auction.
Private treaty
Private treaty sales are the most common way for property to change hands. This includes property for sale by owner in a private sale and also property for sale through a real estate agent. A real estate agent, or the owner themselves negotiates a price for the property with a prospective buyer in private. The process is quite straight forward and there is plenty of time to consider offers and negotiate a price.
Selling property at Auction
Auctions are a more public way of selling property. Prospective buyers come together at the auction, bid on the property, with the highest bidder buying the property (subject to the reserve price being met).
The auction process can be very fast-paced and unpredictable. You will not know how many people are really interested in buying your home and how much they are willing to pay until the day of the auction (although your agent may have some indications). Auctions usually attract many onlookers including neighbours having a 'sticky beak' or people researching the market.
How to sell a house
In a nutshell, these are the steps you need to take to sell your house :
- Step 1:Choose a real estate agent (if you've decided not to put your house for private sale )
- Step 2:Decide on a method of sale, i.e. private treaty (agent or property for sale by owner) or auction
- Step 3:Agree on an appropriate marketing/advertising program
- Step 4:Decide on your asking price (and the rock bottom price you'll accept)
- Step 5:Sign an agency agreement with your real estate agent
- Step 6: Prepare your property for sale
- Step 7:Arrange for buyers to inspect property
- Step 8: Receive offers and negotiate a price or nominate the reserve price if you are selling via auction.
- Step 9: Sign a contract of sale
- Step 10:Conveyancing - arrange with solicitor/conveyancer for transfer of property
- Step 11:Pay commission to the agent
The auction process
The auction will begin at the allocated time with the auctioneer welcoming people, and announcing that he will start the auction. Some details about the property will be read out such as the address and some of the key features of the property. The auctioneer will then ask for an opening bid. The vendor may make a vendor bid to get the ball rolling.
Bidding
Once the auction is in progress bids can be made at any time, either verbally or non-verbally, by raising a hand or a nod of the head (If auction registration applies in your state or territory a bidder number must be displayed each time a person bids.)
The auctioneer normally informs people of the increments that they can bid on. At the beginning it's not unusual for bidding to be made in $10,000, or sometimes $20,000 increments. When bidding slows down, people may offer increases of $5,000 or less (e.g. $1,000). However, the agent can ask that bids be kept at $5,000 increments, but if bidding stalls, he or she may agree to accept $1,000 and even $500 increments.
What happens when bidding stalls?
When bidding stalls, the auctioneer will consult with you to ask if the reserve price has been reached. The auctioneer will then announce either that "the property is now on the market" or that it has not reached its reserve.
If it is 'on the market' bidding continues until it stalls. The auctioneer will then solicit final bids, repeating the highest bid. If there are no further bids he will say "Going, going, gone" and bring down his or her hammer (or hand) on the word "gone". The property is then sold to the highest bidder.
What happens when a bid is successful?
The successful bidder will pay a deposit on the spot, usually 10 percent (unless you have agreed to a reduced deposit amount prior the auction), and the contract will be signed by both yourself and the purchaser.
Auctions usually waive any cooling-off period, so if the purchaser decides not to go ahead with the sale, you are entitled to keep the deposit.
What's a reserve price?
A reserve price is the lowest price that you are prepared to accept for your property.
If the bidding does not reach your reserve price the property is not sold. The house is then considered to be passed in. If the house is passed in, the highest bidder usually has first opportunity to negotiate with you and the agent.
Legal issues
Before you open your property for inspection you must have a contract of sale drawn up.
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