How to sell a house in 10 simple steps
Everything you need to know before you sell your house
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When you decide to sell your own home or investment property, most people have two main needs: sell for the highest possible price, in a timeframe that suits their needs. Whatever your reason for selling, there are many steps involved and careful planning is your best strategy against stress, seller's fatigue and a poor outcome.
The 10 main steps involved in selling a home
There’s a lot more involved in selling a property than putting up a ‘for sale’ sign and hoping buyers will show up to purchase your property (and you may need to buy a new place as well). These are the different steps you'll go through to sell your property.
1. Make the decision to sell
The first step is to assess what’s going on with the economy and property market to determine whether or not it is the best time to sell. You also have to take into account your own circumstances and if you need to sell right away or not, even if the market conditions aren’t suitable. You should consider whether you should first sell your current home and then purchase a new one or vice versa.
2. Select an agent
Picking an agent is one of the most critical steps in ensuring your property sells successfully since they will be carrying most of the load. An agent has to handle all the difficult aspects of the sale, including listing and marketing the property, negotiating the contract and dealing with legal matters, which are all essential to a successful sale.
Be careful when choosing your agent. You want someone professional, who knows what they are doing and who will listen to what you want rather than forcing their requirements on you.
3. Figure out how to sell
The next step is deciding how to sell. There are a few different types of sales, including auctions, set date sales and private treaties, and in conjunction with your agent, you can decide which option is best. You will also have to work with your agent to come up with a plan to list the property as well as showing it.
4. Work out your ideal sale price
The next step is to work out the price you want to sell for and any property inclusions. The value of your property will be influenced its location, size, date of construction and other features. Other property sales in the immediate vicinity may also give an indication of a price range. Additionally, the general property market and the trends in the area will also play a role in determining the price you can get for your property.
5. Sign the agent agreement
Once the price has been set, you will have sign a contract with the agent, which will cover things like the agent’s commission, the estimated price of sale, how long the agreement is in place for, advertising expenses, process and more.
6. Prepare the Vendor’s Statement
Now it’s time for you to put together the Vendor’s Statement or Section 32 for the property you are selling. Likewise, the Contract of Sale must be prepared via your conveyancer or solicitor. These documents will cover all the information a potential buyer might require.
7. Market your property
To attract potential buyers, you are going to have to market your property, which includes advertising and showing off your home. Generally, this means getting some good photos of your home, creating online ads and drawing up the floor plan. Potential buyers will get in touch with your real estate agent to set up an appointment to see your home, or they might opt to attend one of your open homes instead.
8. Sell and negotiate
Your real estate agent will be in charge of auctioning your property or mediating between you and a potential buyer to make sure a mutually satisfactory price is agreed upon. The person buying the property will then have to put down a deposit.
9. Accept an offer and get the property under contract
The final details of the sale will be worked out by the lawyers and banks of both parties to ensure everything is in legal and financial order.
10. Settle and celebrate
If everything proceeds without a hitch, you will hand over the legal rights and keys of your property to the new owner, who in return will pay the balance, either directly or via their bank. At this point it’s time to sit back and relax because you’ve successfully sold your property.
That's the basic process of selling a house. Now let's dig into a few aspects in greater detail.
The most popular methods of selling a property include auctions, private sales and set date sales. The method you choose will come down to your strategy and preference.
An auction is quite a popular method for the purchase and sale of properties. Auctions can sometimes lead to higher prices on a property because of the competition between the prospective buyers and the sense of urgency that is created.
Private treaty or asking price
Private treaties mean you set an asking price for your property and then entertain offers from buyers. A private sale can be more attractive to a buyer, but it’s usually a lengthier process than an auction or set date sale because it doesn't create the same sense of urgency.
Set date sale
Set date sales tend to be popular in slower markets. You decide a price range for your home with your real estate agent before posting ads and showing it. The agent then invites potential buyers to make a formal offer on the property, which has to be submitted by a certain date. After the date in question, the agent will gather all the offers and present them to you. You can pick the highest offer, start negotiating with the highest bidder or list the property again if the bids are under the price you are looking for.
Getting a valuation for your home
The value of your property is determined by a number of factors, including:
- The current property marketing conditions
- Interest rates and the availability of finance for buyers
- The property type
- The price at which similar properties in the area have sold
In the end, the market will determine how much your property will sell for, but you also need a realistic idea of what to expect. A good way to get a realistic price is by talking to an experienced local real estate agent, as they’re constantly aware of the state of the property market. It’s also a good idea to get opinions from two or three agents.
If you get completely different prices from each different agent and you aren’t sure which one is more accurate, you always have the option of commissioning a licensed real estate valuer who can objectively and independently evaluate how much your home is worth.
Picking a real estate agent
Some things you should look for in an agent include:
- Their willingness and desire to meet your needs
- Their ability to stick to your requirements rather than imposing their own
- Good references and good word-of-mouth advertising from clients they’ve served in the past
- Knowledge of the area where your property is located
- Knowledge of the price range you’ll probably be able to sell the property in
- Commitment to honesty and transparency in discussions regarding the market and your personal circumstances.
Finding and researching an agent is a matter of using the internet and your social networks. There are many sites that will allow you to see what agents are working in your area. Once you have the list, you need to research them by checking out their sites, blogs, discussion forums and any comments made by clients.
Before meeting an agent, make sure to prepare a list of questions you want to ask in advance as it will make your life easier. And don’t worry if the agent requests to meet at your home.
This allows them to see and evaluate the property and get a good idea of how they can help you. This is something the agent should do for free and is in no way a commitment on your part to engage their services.
After your meetings, you can decide which agent was the best fit and then it’s time to draw up the agreement, which will cover an estimation of how much you will pay in fees, charges as well as other expenses you might have to cover once the property is sold.
Alternatively, you can skip the real estate agent commissions and sell on your own.
Marketing your property
Marketing your property is essential because it’s the only way to get it in front of buyers. A good marketing plan doesn’t have to cost a fortune, but a little investment is required to ensure you get the best possible results. Let’s take a look at some of the ways a property can be marketed.
Advertising online: statistics and facts
There are many channels you can use to advertise your property and getting the right combination is critical. However, it’s also worth keeping in mind that 86% of people use the internet when looking for a property to purchase, which makes online advertising extremely important.
The largest online site for selling real estate within Australia is considered to be RealEstate.com.au. Most real estate agents will list homes for sale on this site. Others may also choose to list the property on other sites such as Domain or HomeHound, as well as on their own internal company website. This is done to increase exposure and maximise the number of people who will potentially see the property.
Your property’s advertising schedule
To make sure that your property gets the maximum amount of exposure possible without you going over budget, you need to create an advertising schedule that’s in line with your needs. You should also consider other factors such as the number of days your property has been on the market, what other properties are up for sale in your area and how much your property is worth.
Should I use video to sell my property?
Using video to sell your property is a great way to attract even more prospects and help your listing stand out. Some large real estate sites allow you to post the video right on the site. However, for those that don’t offer this feature, you can always post a video on YouTube and link to it.
A video will allow buyers to get a better view of your property. It’s a great way to engage your target market, which can really help with selling your property.
Presenting your property
Your property has to be presented in the best light from the second you put it on the market. So, keep the following tips in mind for a successful presentation:
- Curb appeal. Pull the weeds out and add some nice pot plants to improve the look of your property. It’s essential for the front of the home to look enticing as that’s the first thing potential buyers see.
- Let the light in. Make sure the windows are sparkling before every viewing. The cleaner the windows are, the more light there is and the better the property will look.
- Reduce clutter. The idea is for a prospective buyer to be able to imagine their possessions in the property, so get rid of clutter and make sure everything is nice and tidy. Getting rid of clutter also makes the rooms seem bigger.
- Setting the scene. You want to give your home as much appeal as possible and if that means hiring furniture to get just the right look to get buyers in the door, then that’s exactly what you should do. It’s one way to give your home a new, fresh look that can turn an interested party into a buyer.
- Repairs. If there are broken light bulbs or leaky faucets, make sure to fix them. In fact, make sure all those small repairs you’ve been putting off for a while are taken care of. With a little paint you can freshen up the woodwork and hide scuffs and scrapes. If you get the basic maintenance covered, it’ll reduce the likelihood of a buyer finding any problems.
- Fresh air. Do your best to get rid of those nasty smells, such as smoke or pet odours. Open up the windows, put on a fresh pot of coffee and put out some fresh flowers to make the place as inviting as possible. In fact, consider baking a batch of cookies, as the smell of baking will speak to people on an instinctive level, making them think of home, which is exactly how you want a prospect to see your property.
- Make it inviting. Make your home even more inviting by making sure the interior temperature suits the outside weather. If it’s hot, turn on the air conditioning or the fans. If it’s cold, turn on the heaters. You want people to feel comfortable and you want them to want to stay and never leave.
The day of the auction
While you might be anxious come auction day, if you understand the process, you’ll be able to relax. So, this is how things will go on the day.
- Before the day. Auctions can be over quickly, which is why it’s essential that you have ironed out all the details with your agent, including how things will proceed on the day. Thus, you need to make sure the reserve price is set and you also need to decide whether you will be making vendor bids via your agent. These decisions have legal consequences and must be clarified.
- On the day. The law states that the agent must display documents pertaining to the property at least half an hour before the proceedings begin. The first thing the auctioneer will do is to announce details such as the state laws applicable to auctions in general as well as the rules of the current auction, which includes whether or not vendor bids and co-owner bids will be utilised.
- Opening bids. The auctioneer will request an opening bid and will set the level by which all the bids must increase, such as increments of $5,000. People can try to place other bids of smaller or greater increments, but it’s up to the auctioneer whether he or she will accept the bid or not.
- Sold. When the bid reaches the reserve price, the property is officially considered “on the market” and will go to the person who places the highest bid. If the highest bid is below the reserve price and no one is bidding anymore, the auctioneer will talk to you in private and ask if you want to drop the price. Once the last person has bid and you’re happy with the price, the auctioneer will give those attending another opportunity to bid by announcing “going once, twice, three times”. If no one places another bid, he will announce that the property is sold.
- Payment. The highest bidder is required to make an immediate deposit after the auction, which is generally around 10% of the price they purchased the property at. The difference is paid upon settlement, which is usually established by the person selling and is generally 30, 60 or 90 days later. Keep in mind that the more flexible you are with the settlement date to help out the buyer, the easier it will be for you to sell the property. The sale is considered completed once the contract has been signed by both parties and any cheques and transfers have been done. The property is considered sold once the balance of the price of purchase has been covered.
Property selling costs
There are multiple costs that come with selling a property. It's important you understand these before you sell.
- Agent commission. Real estate agent commissions vary from state to state, and are calculated as a percentage of the property's sale price. Commission can range from 1-3% of your property's sale price.
- Lender fees. Mortgage fees are common charges.If you're paying your loan off ahead of time, your lender might charge you a prepayment penalty or an early exit fee. This varies from loan to loan. In addition, just about all home loans attract settlement fees that lenders charge to take care of administrative costs. Expect settlement fees to run you between $150 and $400.
- Conveyancing and/or solicitor fees. Selling a home entails a fair amount of legal paperwork, so hiring a lawyer to help you through this simplifies matters considerably. Lawyers don't work for free, though. LocalAgentFinder puts the average cost of conveyancing between $500 and $1,000.
- Removal costs. These costs refer to the money you'll have to spend to get all your belongings out of the home. You can save some money by doing this on your own, perhaps with help from friends and family. If you do choose to hire removalists, the cost will vary depending on where you're moving from and to. For example, Sydney removalists run around $125-150 per hour. You can expect removal for an average two-bedroom home to take about four to six hours.
- Repairs and presentation. These costs can vary significantly depending on the existing condition of your home and what you expect to accomplish. When preparing a home for sale, make sure you don't spend more than what's absolutely required because you might not be able to capitalise on extensive makeovers.
What if I need finance to buy a property before my house sells?
It's hard to line up the sale of your old home with the purchase of your new one. If you need temporary finance to cover your new property purchase while waiting to complete the sale on your home you could take out a bridging loan. You can compare bridging loans options in the table below.
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