How to sell your house in 8 simple steps
Find a good real estate agent (or go it alone), work out the best selling method and get your house in top shape so you can sell it for the best price.
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). You want to sell your house for the best price you can get, in a timeframe that suits your needs and in a way that minimises stress and effort. It is possible to sell your house yourself and avoid a real estate agent altogether,
1. Select an agent
Picking a good real estate agent is one of the most critical steps in ensuring your property sells successfully. 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. A well-reviewed agent with good knowledge of the local market is essential, and it's also important to find out what percentage of the sales price they charge as commission.
Once you choose an agent you will need to 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.
You don't need a real estate agent. You can sell your house yourself without an agent. It's a lot more work. You could save a lot in agent commission, but it also may be harder to get the right price for your home.
2. Choose between auction and private sale
The next step is deciding how to sell. There are 2 main types of sales, auctions and private treaties. Your agent will help you decide which option is best for you.
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.
3. 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.
4. 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.
5. Market 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.
6. 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.
7. 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.
8. 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. Here are some extra tips for getting your home property valued and what to do on auction day.
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.
How to get ready for an auction sale
If you choose the auction sales method you'll have the additional cost of the auctioneer. And you'll have an auction day that may be full of drama and excitement.
- 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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