Selling your home is a major transaction and you can either do it yourself, or use a real estate agent. Both methods have their pros and cons. You also need to decide whether to sell through private treaty or at auction.
When it comes time to sell you home, you also want to make sure it's in the best possible condition. Prospective buyers will be judging your home on some pretty tough criteria. The better prepared you are, the more likely you'll get the price you want.
The trickiest part in selling your home yourself is working out an appropriate price for your house. You may win the battle and lose the war - it's easy to save your agent's fee and sell for too little.
Gather as much information as you can about similar sales in the area. Local councils often keep records of home sale prices and you can also pay for a professional valuation.
The Home Price Guide
from Australian Property Monitors is an excellent aid to valuing your home as you can compare recent sale prices of similar properties in your street or postcode. The publisher of Your Mortgage Magazine
, HWW Ltd, owns a half-stake in APM.
If the market is rising, you may want to sell by auction. You can hire the services of a qualified auctioneer by contacting the real estate institute in your capital city for details.
You will have to open your home for inspections either on call or once or twice a week. You'll also have to organise signs, brochures, publicity, inspections and legals.
Make sure you anticipate any questions that potential buyers may ask. Take potential buyers' contact details and always follow them up with a phone call to see if they are interested.
Using a real estate agent
If the DIY approach seems all a bit daunting, it's time to choose a real estate agent. The difference between a good agent and bad one can mean thousands of dollars difference on the sale of your property.
Like any other industry, there are good, bad and mediocre real estate agents. To help you choose a winner we've assembled a few useful tips.
The short list
The first step to selecting an agent is to draw up a rough short list. Ask acquaintances for any recommendations. Look for agents with good track records, who are experienced in selling your type of property and have a good knowledge of the local area.
Once you have drawn up the short list it's time to get on the phone and arrange a few 'walk-throughs' your home, which allow the agent to size up your home and you to size up the agent.
At the walk-through, be sure to point out all your home's best features as well as its drawbacks. Inform the agent of any relevant information that may impact on the value of your home.
Check how long the agent has been in the real estate game. You should also discuss the most appropriate type of sale, whether auction or private treaty and a likely time frame for a sale. The agent should be able to fill you in on various advertising options. They will also be able to tell you about what commission they charge.
The agent should be able to tell you how much they think you'll get for the sale. This figure will be based on their market knowledge, but don't take that for granted. Make sure you get them to justify their figure and quiz them about similar sales in the area.
Compare the values given to you by different agents. Be very wary of inflated valuation figures and agents telling you what you want to hear.
Once you have made your decision on which agent you will use, it's time to settle the commission. An agent's commission may be negotiable or fixed by state law, depending on which state or territory you live.
If you're able to negotiate, remember that you get what you pay for. You need to weigh up the amount of money you stand to save with a cheap commission against the amount of money you could lose if the agent isn't much good and doesn't achieve the best possible price.
Signing an agreement
An agreement with a real estate agent is a legally binding contract so read it carefully before you sign. Property law differs from state to state, and terms and conditions vary between different agreements.
Make sure you include the duration of the agreement, any commission, fees and charges payable to the agent. The agreement should cover what happens if the property is passed in at an auction and who pays for advertising and how much of it there will be.
The contract with the agent should state the type of agency, whether it is sole or in conjunction with an agreement with another real estate agent.
Auction or private treaty?
The next question you face is whether to sell your home through auction or private treaty. The answer depends a lot on the property you are trying sell and the state of the local property market.
If the property is in a desirable location, such as near the water or in a real estate 'hot spot', you may end up receiving a higher sales price by selling through auction because competing buyers will play off against each other during the bidding process.
Similarly, if the property market is healthy and sales volumes are high, there may also be a shortage of properties for prospective buyers, adding to the advantage of selling through auction.
The other main advantage of auctions is that there is no 'cooling- off' period, so the buyer can't change their mind about buying your property. Under private treaty, once a deposit is paid, a buyer has a period of time in which to reconsider their purchase, known as a cooling-off period.
If your local property market is cooling, and auction sales rates are falling, as is the case in many Australian capital cities (see State of the Market on page XXX for details), then a private treaty sale may be better than an auction, to avoid your property being passed in at auction.
Another downside to auctions is the cost. Sellers must pay for the auctioneer and the auction room, as well as advertising and promotion material regardless of whether or not the property is sold. These costs can add up to substantial amounts over the selling process.
With private treaties, the only selling cost you generally face is the agent's commission (if you choose to use one) which normally includes advertising expenses.
Under private treaty, the buyer or seller may request special conditions to be inserted into the contract such as an extended settlement period or 'subject-to-finance' clauses which may result in further delays in the selling process. If you sell at auction, the sale contract can't be altered.
Preparing your home for sale
It's now time to put those finishing touches on your home that will make it shine for the throngs of prospective buyers soon to scrutinise your 'product'.
The view from the outside
This is the first picture prospective buyers will get so make sure your home looks as good as possible from the outside.
Your garden should be tidy and any plants look alive and well. Planting a few flowers or placing a few pot plants strategically can help make your garden look even better.
If your house needs a coat of paint, this may be a wise option and help get more buyers into your home. But make sure you pick a neutral colour that won't put buyers off.
Your front windows should gleam, and don't ignore the front door. A side driveway should be free of clutter, such as skateboards or bikes, and the garage door should be shut. If you do have a garage, particularly one with internal access, highlight the potential to convert it to additional living space.
Around the back of the house, repeat the tidy up plan, mow the grass, put outdoor furniture into place and water the garden and trim the plants.
Gardening and any pool equipment should look organised and tucked away.
The inside story
Look at each room as if you're seeing it for the first time. Ask yourself is it as clean as it could be? Get rid of clutter and make sure any carpets or floor boards are clean and free of stains.
Natural light is a vital selling point for Australian homes, so concentrating on this aspect of every room is your first priority. Clean the windows, pull back curtains and blinds or open the slats of the venetians. You will be amazed at what a skylight can do and for a very reasonable price.
If a room's light will be enhanced by a coat of paint, go for a few shades lighter than you used before where possible. This has the added benefit of making the room look bigger.
A common ruse used by many sellers, which also relates back to light, is timing the 'open for inspections' for the hour when the most light appears in the most rooms. This may take a few days to figure out, but it's worth the trouble. You might need to clean carpets and wash floorboards, lino, tiles and cork floors.