The Process Of Selling - How Does It Work?
The process of selling your home is a series of small steps that lead to your settlement date, but each step is so important in ensuring a smooth process and the best possible result. It’s not as simple as putting up a ‘For Sale’ sign and waiting for buyers to arrive at your doorstep. Being aware of each stage of the sales process will make sure you have the big picture in mind whilst dealing with the details.
1. So you have decided you want to sell your home or investment property. Have you considered the current state of the real estate market in your area, whether it’s the best season to sell, and if it’s your home, will you purchase a new home before or after you sell?
2. Once you are sure the time is right, you need to choose the best Agent for you. Your agent will be the conduit between you and your buyer, so choose carefully. You need to entrust your Agent with your most significant asset, so feeling comfortable with them is so important. They will manage your advertising as well as presenting and completing the legal requirements of selling your property, so professionalism and integrity are vital. There must be trust.
3. How do you want to sell? You and your Agent will need to work out a plan for listing, showing and selling your property.
- Auction: This is a popular way to buy and sell property, and it brings the sale process to a head on a particular date. You set a reserve price which is the minimum you will be prepared to accept, and if bids don’t reach your reserve price your Agent may negotiate with the highest bidder on your behalf. Auctions can result in a higher price for your property as there can be a sense of urgency and competition amongst buyers, however it can be very stressful on the day.
- Fixed Date Sale: This is one of the more common ways of selling a property in a slow market. You determine the best advertised price range for your property, with recommendations from your Agent (who you have engaged because you trust them to get the best possible price). They advertise the property, present it by private inspection or home opens, and invite prospective buyers to formally submit their best offer by a specific date and time. After the set date, your Agent will collect and present the offers to you. You can choose to accept the highest offer, enter negotiations or re-list the property if your desired price is not reached.
- Asking Price / Private Sale: Listing an asking price or requesting offers or expressions of interest can be more appealing to buyers, however they will usually try to negotiate below the asking price so it is important to discuss your expectations with your Agent. Private sales can take longer than the first two options though as there isn’t the same sense of urgency.
4. One of the most important decisions is your selling price, and this is often a compromise between your ‘dream’ price and what your Agent recommends based on selling conditions, comparative sales in the area and current supply and demand. The valuation will take into account the location and the age of the property, the house style, the building structure and its condition including any building or structural faults, the features of the home, any caveats or encumbrances on the property and local council zoning.
You should also discuss your property inclusions (and exclusions). Generally you cannot remove anything from the building or garden that is ‘fixed’ – carpets, curtains, joinery and built in shelving, light fittings, tap ware, in ground plants etc.
You’ll sign an agreement with your Agent which is a legally binding contract detailing the estimated sale price, any commissions, the duration of the agreement, any advertising costs and the sales/promotional process (and if the agreement is exclusive or non-exclusive).
5. The next step is the preparation of the Vendor’s Statement (or Section 32) for your property and the Contract of Sale through your solicitor or conveyancer (a conveyancer is your personal legal representative and they should be able to answer your questions about the process leading up to settlement). The Section 32 will include details about your property that a prospective buyer will need in order to make their purchase decision. The statement covers things like whether a mortgage is held over the property, any covenants which would restrict what you can do with it, any easements to which the land is subject (drainage, rights of way, or power lines for example), council zoning and associated declarations.
6. Now the process of advertising and presenting your property begins. This generally involves photographing your property, drawing up floor plans and writing your online advertisements and any print ads. You need the best photos, great copy-writing and great presentation to get the best result.
At this stage you will have prepared your property for sale (see last week’s blog for our top 12 tips for 'Creating the best first impression')
7. Go to market. Now it gets interesting! Your Agent will contact prospective buyers, or potential buyers will contact your Agent based on any promotional activity, and arrange times to view your property or attend your 'home open' dates.
8. This is the exciting part - sale and negotiation. Your agent will auction your property or mediate between you and buyers to reach a mutually acceptable price. Note that private sales are subject to a ‘cooling off’ for the buyer - not for the Vendor (the 'cooling off' option does not apply to auctions). Once the cooling off period has expired and provided there are no other conditions in the contract (subject to finance/building inspection) the purchaser is bound to the contract and must pay a deposit. A settlement date will be negotiated and the purchaser is obliged to follow through with the purchase (the settlement date can be anywhere from 30 to 60 days, but can be extended upon mutual agreement).
9. You are then officially ‘under contract’. Your conveyancer/lawyer and your buyer’s conveyancer/lawyer will liaise with the relevant banks/financiers to work through the details of the sale to ensure both parties meet all legal and financial requirements.
10. You’ve made it! It’s settlement day. All going to plan, you’ll relinquish the keys and legal rights to your property in exchange for the balance of payment from the buyer or their bank.
For more information on the process of selling your home or investment property, contact the Danckert Real Estate team.
firstname.lastname@example.org or 5904 6446