Selling your home is obviously one of the most import transactions you’ll ever make, and it’s usually only something you do a few times in your lifetime. With this in mind, we have created this summary called the 6 phases of selling. It covers the complete process of selling your home and the details you should consider.
1. Choosing an agent & agency
Choosing the right real estate agency and agent to work with you is a highly important part of the selling process. Sellers often wrongly presume that all real estate agents and agencies are the same. Your chosen agent can be the difference between a poor or great sale price, and an easy or hard sales experience.
Many sellers unfortunately choose their real estate agent on the basis of who gives them the highest estimated selling price with the lowest commission. Understandably, sellers want to get the highest end result; however, choosing an agent on these factors alone is near-sighted.
Some agents will overprice your property to get your business. This inflated price means that when your property is “on the market” you are targeting the wrong buyers! This can leave you in a position with no buyers and a predicament where you need to sell quickly at less-than-market value.
Before choosing an agent, you should do your homework, ask people who have recently sold, observe online and print marketing, and general activity in the area. From this you will be able to select some agents for a Market Appraisal.
Market Appraisals are often conducted at your property. They are interviews between you and your chosen agents where they will give you an educated sale estimate. The agents should justify to you how they reached this price, and show you the sale prices of recently sold comparable properties. The agents should also present to you in detail the actions they will take in the process of selling your property, and also explain their service fees.
At the Market Appraisal you should focus on the agent’s customer service skills, advertising and marketing, fees and expenses, and negotiation skills. These are highly important factors for a successful sale!
Through evaluating all factors, you’ll be able to choose the best agent. The best agent is often the one that offers a realistic property valuation, has superior marketing and negotiation skills, and knows how to work with buyers to create a successful sale.
You should plan for time to prepare your property before it's listed for sale. Ask your sales agent for their opinion on what could be done to improve the final sale price of your property. Remember, first impressions really do count!
There are a few important decisions for you to make with your sales agent:
- Selling method for your property – i.e. Fixed Price, Ranged Price, Auction, or Sale by Tender.
- The advertised asking price for your property (if not selling by auction).
- Marketing/advertising campaign to get the right buyers viewing your property.
Agreement with your agency
Once these decisions are made, you will need to sign a Listing Agreement Authority with your real estate agency. This is a contract outlining the terms, conditions and responsibilities of both parties in the agreement. It will also detail your agent’s fees. It is important that you carefully check all details of this agreement before signing.
You should also collect all relevant property information including:
- Copy of house plan (if available).
- Inclusion and exclusion list.
- Copy of council plan, and any documentation about additions or outdoor improvements to your property, i.e. pool, pergola, carport, garage etc.
- Any relevant building or pest inspection reports.
Once all the information is collated, your property will be placed “on the market”. It will be available for buyers to see online and as per your Listing Agreement Authority in other media and activities.
Showing your property
Your agent will organise inspection times of your property that suit both you and your buyers.
At inspections, it is highly important that buyers view your property looking its very best. This ensures that each selling opportunity is taken full advantage of, and it greatly increases your chances of an excellent sales result.
After each inspection you will be given buyer feedback from your agent.
Negotiation with buyers
Following one or more inspections, buyers will then submit offers to purchase your property.
As a skilled negotiator, it is now your agent’s responsibility to take the lead, negotiating with buyers to get the best possible final price. Throughout the negotiation process your agent should keep you fully informed as to the progression of the negotiations and consult with you on the decisions to be made.
A price will then be finally agreed and you will move to the ‘Contract’ phase.
There are two methods you can exchange contracts with your buyer.
Method 1) Exchange of contracts with a 'Cooling-Off' period
This method is used most frequently. The 'cooling-off' period allows the buyer to enter into a conditional binding contract with you (the vendor/seller), from your acceptance of the selling price, and the buyer's payment of the deposit. The 'cooling-off' period entitles the buyer exclusivity on your property for a period of 5 business days. The 5-day period allows the buyer to carry out all inspections on your property (usually building and pest inspections) and to finalise finance arrangements.
As the seller entering into this 'cooling-off' period, you enter into an unconditional commitment with the buyer to sell under the agreed terms and conditions of the negotiated contract.
After the ‘cooling-off’ period, the buyer retains the right to withdraw from the contract in-line with its terms. Withdrawing from the contract can be for any reason, and the penalty is 0.25% of the selling price, which will then be paid to you (the vendor/seller).
Method 2) Exchange of contracts by way of an 'Unconditional Exchange'
Your solicitor will follow-up this method of exchange of contracts. A 66W certificate is signed by both parties’ solicitors, which waives the 'cooling-off' rights under the contract.
Before the exchange of contracts takes place unconditionally, the buyer must carry out all enquiries and inspections before exchange, as no 'cooling-off' period applies.
The period of time between exchange of contracts and the completion of the sale is referred to as Settlement. Most property transactions will settle in 42 days.
Throughout the Settlement phase you will be required to sign legal papers with your solicitor/ conveyancer to facilitate the transfer of property title, and to organise the disbursement of funds.
The payment of your real estate agency's fee is the final step in the Settlement phase.