SALE WITH AN AGENT
A key to successfully selling your home is choosing the right agent. Before making your decision, we suggest that you talk to three agents and:
- Make sure they have a valid license by doing a license check online or over the phone on 13 32 20;
- Get a list of all their fees;
- Ensure that they are covered by a professional indemnity insurance policy;
- Find out if they have a good knowledge of your area;
- Ask if they adhere to a Code of Ethics;
- Get quotes from them regarding their commission, fees and charges;
- Ask them what their fees, charges and services cover are (time spent promoting/selling your home, advertising/ promotion costs and administrative costs);
- Ask them how they plan to promote your home (newspapers advertisements, letterbox drops, open houses etc.).
There must be a written contract between the seller and the agent called an agency agreement.
We suggest that, when choosing an agent, it is important to consider all factors and not make a decision based on the lowest commission.
SALE WITHOUT AN AGENT
One of the benefits of selling your property yourself is the chance to make a financial saving through not having to pay commission to an agent. However, if you decide that you want to sell your property without the assistance of an agent, you will need to do quite a bit of homework before tackling the job yourself.
Before electing whether to go through with the sale of your property without an agent, you should thoroughly research what you will need to do at every stage of the sale process. For example, the first thing you need to know is that a residential property cannot be advertised for sale until a Contract for Sale has been prepared.
If you decide to sell your property without an agent, do not hesitate to contact GMH Legal so we can assist you with the preparation of the Contract for Sale and make sure that everything is in order.
SALE BY PRIVATE TREATY
In New South Wales, there are two different ways a property can be sold: by private treaty or by auction.
A sale through a real estate agent or directly by the owner is called a sale by private treaty.
When you sell your home by private treaty, you set a price and the property is listed for sale at that price. In general, the price is negotiable with the seller often asking a higher amount than they expect to sell the property for, and the buyer making an initial offer much lower than the asking price.
Benefits of a sale by private treaty:
- Greater control over the sale;
- Time to considers offers by potential purchasers;
- Ability to extend the time for which your home is for sale indefinitely;
- Potential purchasers must make offers for your property ‘blind’, without knowing what other buyers think it is worth.
You should however also consider the risks associated with selling by private treaty, including the fact that if the price is too high you property may not sell, while if the price is too low you may miss out on maximising the selling price. In addition when a property is sold by private treaty, the buyer has a five day cooling-off period during which they may withdraw from the sale.
SALE BY AUCTION
To sell through an auction process, the amount you want for the property is generally not revealed to potential buyers who are encouraged to attend the auction and to bid for the property against other potential buyers.
Auctions have become increasingly popular way to sell or buy residential property, but before you decide to go down that path, do your homework and familiarise yourself with the process and what it involves.
SETTLING A RESERVE PRICE
The reserve price is the lowest amount you are willing to accept for your property. Before bidding begins, advise your agent what you nominate as the reserve price. This is usually not told to prospective buyers.
If the highest bid is below the reserve price, the property will be ‘passed in’. You will then either try and negotiate a price with interested bidders or put the property back on the market.
If the bidding continues beyond the reserve price, the property is sold at the fall of the auctioneer’s hammer.
The successful bidder must sign the sale contract and pay you a deposit on the sport (usually 10%). There is no cooling-off period for anyone who buys a property at auction. If the property is passed in at auction but contracts are exchanged on that same day, the cooling-off period still does not apply.
For more information about auctions, please refer to the ‘Auction enquiries’ section of our website.
Fees and charges associated with selling a property can vary so it is important to be aware of all costs up front so you can take these into consideration when arranging finance.
Costs you should expect to incur include:
- Commission and marketing expenses payable to your agent (if applicable)
- Search costs
- Government charges
- Discharge of mortgage (if applicable)
- Your proportion of rates and taxes as at the settlement date
- Conveyancer’s or Solicitor’s fees
- Moving costs
Please note that there is no legislation to determine what commission a real estate agent charges so they are at liberty to determine their own fees, taking into account the extent of the services provided and the complexity of the marketing campaign.
CONTRACT FOR SALE
A seller must have the Contract of Sale ready before offering a property for sale.
The seller must also provide with the Contract:
- A section 149 Certificate from the local council, detailing zone and other information;
- A sewerage diagram;
- A copy of the title folio from the Land and Property Information NSW;
- Copies of all documents creating easements or restrictive covenants;
- A cooling-off statement;
- A notice directing parties to the Conveyancing Act 1919 (section 52A) and the Conveyancing (Sale of Land) Regulation 2000;
- If it is a strata unit, copies of the folio of the Register for the lot and common property and a copy of the strata plan.
If the above mentioned information is not attached, the buyer may be entitled to cancel the Contract within 14 days of exchanging the Contract. The buyer may also reserve the right to cancel if the seller breaches certain warranties required by the Vendor Disclosure and Warranty Regulation.
EXCHANGE OF CONTRACTS
Exchanging sale Contracts is the legal part of selling a home and happens regardless of whether you sell your property by private treaty or auction.
There will be two copies of the sale Contract: one for your and one for the buyer. You each sign one copy before they are swapped or ‘exchanged’. This can be done by hand or post and is usually arranged by your Solicitor, conveyancer or the agent. At the time of the exchange, the buyer will be required to pay a deposit, usually 10% of the purchase price.
The Contract exchange is a critical point in the sale process:
- The buyer or seller is not legally bound until signed copies of the contract are exchanged
- Buyers of residential property usually have a cooling off period for five working days following the exchange of contracts during which they can withdraw from the sale
- If the agent arranges exchange of contracts, the agent must give copies of the signed contract to each party or their solicitor or conveyancer within 2 business days
- The cooling off period can be waived, reduced or extended by negotiation
- There is no cooling off period for sellers. Once Contracts have been exchanged, sellers are generally not bound to complete the agreement
Please note that there is no cooling off period when purchasing at auction
Settlement is the conclusion of the sale transaction and usually takes place about six weeks after Contracts are exchanged.
A date is arranged by both parties for settlement. It usually takes place at the seller’s lending body.
Parties present include representatives of the seller and the purchaser, together with a representative from the lending bodies of the seller and the purchaser.
The key to the property is generally handed over at settlement or the buyer should be able to pick it up from your agent immediately after settlement.
Please do not hesitate to contact GMH Legal if you intend to put your property on the market or if you wish to receive more information about conveyancing. Our team of experienced property lawyers will answer your questions and guide you through every step of the transaction.
GMH LEGAL’S LOW PRICE GUARANTEE
At GMH Legal, we will beat any comparative quote by 5%.
With over 60 years of combined legal experience, we have a history of providing sound and commercially astute legal advice in a decisive, efficient and client-focused way.
We understand that buying or selling real estate is one of the most important legal transactions that you will make in your lifetime and our panel of conveyancing solicitors will guide you through every step of the transaction, making sure the conveyancing process runs as smooth as possible, whilst providing excellent service.
Our outstanding track record demonstrates our team’s breadth of understanding and expertise in conveyancing law.
If you are thinking of buying or selling a property, call us today on (02) 9587 0458 so we can provide you with insightful and effective legal advice that will help you gain competitive advantage on the real estate market.
* The Low Price Guarantee is only available for residential conveyancing services. The offer does not extend to a quote from a license conveyancer and/or online conveyancer service or a quote on a non-residential conveyance. It applies to professional fees only.
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