How to sell a house
Should I use a real estate agent?
The usual process of selling a house involves using a real estate agent. It is the agent's job to find a buyer for your house; the agent will advertise and show the property to potential buyers. You will need to discuss with the agent how much to spend on advertising and who pays for it.
If you use an estate agent, remember that he or she is your agent, not that of the potential buyer. The agent works for you
You may, however, decide not to go through an agent, but rather to sell privately. In this case your lawyer and that of the buyer will complete the agreement for sale and purchase, which your lawyer will charge you for. However, this is usually not the best way to get the best price.
Does the agent get paid whether or not the property is sold?
No, if there is no sale the agent is not entitled to receive any commission.
However, even if a sale does not take place a binding contract may be in place. This means that the agent could be entitled to commission even if the buyer defaults on settlement.
The terms of the sale
As well as the price of the house, you will need to decide what chattels (for example, furniture, drapes) should be included under the sale.
If you are auctioning, it may be advisable to obtain a "Land Information Memorandum" (a LIM), which contains the local council's records on the property, so that the potential buyer can be confident about what he or she is buying (see How to obtain a Land Information Memorandum).
Presenting the property
You should consider whether the house needs any repairs and whether they would increase the value of your house sufficiently to be justified. Remember, presentation is everything.
Types of listing
Once you have established the terms under which you wish to sell your house you should determine the type of agency you want. The possible arrangements include the following:
- An exclusive listing restricts you from listing with any other agents for a certain time, usually no longer than three months.
- An open listing allows you to list your property with a number of agents, or it may sometimes reserve you the right to sell the property yourself. In this case, the danger is that the agent is less motivated.
- A multiple listing is where one agent is given the right to sell the house on the condition that the details of the property are given to the local multiple listing bureau. If one of their members sells the property, the commission is split.
The sale and purchase agreement
The sale and purchase agreement should generally include:
- the particulars of the title
- any improvements to be made by the seller
- a list of chattels to be included with the house
- the price, including the deposit
- provision for adjustments to be made to land tax, council rates and water rates
- the rights of the parties to cancel the contract
- Do not hide any potential problems with your house, such as your fence not being on the boundary. These problems can normally be resolved sensibly and openly between the relevant parties; concealing the problem will likely cause far greater problems later on.
- You should obtain legal advice early on, as this is often cheaper in the long run.