SELLING YOUR PROPERTY?
Selling a house is an important step and one that needs careful consideration. The rules, regulations and legal protection in this area are worth understanding before any real estate venture. In the lead-up to the sale of your home, it pays to do some research on the likely market value of your property and the process of selling property.
In this section of the webrealty.com website you will find answers to many of your questions when it comes to selling.
The Agent – Seller Relationship
The relationship a seller has with an estate agent is different to that of a buyer. Estate agents are obliged to act responsibly and ethically when dealing with both buyers and sellers. However, the agent’s responsibility is to the seller, as the agent’s fees are paid by the seller who engages the agent and the agent’s services to help sell their property. The agent is bound by professional conduct regulations to always act in the best interests of the seller and to engage in good estate agency practices. The agent will charge a fee for this service, usually in the form of a commission, which can be a percentage of the sale price or a negotiated fixed fee. A seller can expect the agent to give an estimated selling price of the property and to communicate all offers to buy.
A seller can generally expect the agent to:
- advice on a method of sale
- advertise and market the property, and provide a marketing plan
- organise and attend open house and other inspections
- attract prospective buyers and negotiate a sale
- arrange the signing of the contract
- collect and hold the full deposit.
Commissions
Most agents obtain their fee from the seller in the form of a commission upon completion of the sale. An agent cannot obtain a commission without an authority to sell signed by the seller. An agent is required by law to advise the seller that the commission is negotiable, prior to the seller signing the authority to sell. There is no set amount for a commission; it is negotiable between the seller and the agent, and can be set at whatever amount both parties agree on. The commission can be paid as either a flat rate or as a percentage of the sale price. The agreed commission, whether a flat rate or fee, must be recorded on the authority to sell. If it is recorded as a percentage (%), it must also be shown as a figure in dollar terms. GST is payable on the commission fee.
Authority types
The most common type of sales authority is the ‘exclusive authority’, which means that the sellers appoint a single agency to market their property exclusively. Under an exclusive authority the agent is entitled to commission when the property is sold. Sellers should not sign more than one authority, as in certain circumstances more than one commission may have to be paid. An agent can claim commission under an exclusive authority even if the sellers end up selling their own property themselves. It is less common to use a ‘general authority’. With a general authority sellers can list with more than one agency, and only pay commission to the agency that sells the property.
If you want to make any changes after the authority has been signed, they must be made in writing on all copies of the authority to sell and initialled by both you and the agent.
The selling price
Never choose an agent just because he or she gives you the highest estimated selling price. Have several agents appraise your property and give you an estimated selling price. Ask them to justify their price by showing you, for example, similar properties sold at similar prices in the area. Take into account the agent’s overall marketing plan when making your decision.
When is the commission paid?
Clarify with the agent the exact circumstances under which the commission must be paid, before signing the authority. Do not sign without carefully reading and understanding the authority to sell. If you are unsure of anything, ask for clarification from the agent, or seek professional legal advice. By law the agent is obliged to provide a copy of the authority to the seller at the time of signing. Retain this as proof of what was agreed with the agent.
Methods of Sale
The decision to sell by auction or private sale will depend on many factors including the type of property and location, as well as the seller’s available time frame and personal preference. There are two main ways that real estate can be bought and sold:
Private Sale
In a private sale the property is advertised and offers are invited from prospective buyers. The sale is negotiated between the buyer and seller, with the assistance of the agent.
Public Auction
An auction is a public sale, usually conducted by an estate agent acting as auctioneer. It is advertised for a specific place, time and date. Prospective buyers bid and the property is sold to the highest bidder, provided the seller accepts the bid.
Get your property into shape
Some handy presentation hints for preparing your property for sale:
- Weed and cultivate the garden beds
- Add a splash of colorful flowers to the garden
- Remove all rubbish
- Repair and paint where necessary
- Ensure fences are in good order
- Clean walls, floors and windows
- Prune trees or shrubs close to any windows to help with natural light
- Clean dust and cobwebs from the exterior
- Steam clean carpets (if necessary)
- Repair items such as dripping taps, sticking doors and drawers
- Declutter as best you can … remove all unnecessary articles from cupboards. It has to be done eventually. Better to do it now and display the full value of your storage
- Create an entrance if possible or decorate a dull garden with pot plants and garden furniture that can be taken with you
- Store excess furniture to ensure rooms appear as spacious as possible