Making the decision to sell your home is a big move that brings with it both excitement (what price will we get?) and apprehension (what if we can’t sell?). As with anything in life, preparation and knowledge will help make the process smoother and allow you to realise your aspirations. In this article we provide a guide to some of the things you need to check off.
Appointing a real estate agent
While you’re entitled to sell your house yourself, most people prefer to avail themselves of the services of a real estate agent, who can increase your chances of finding potential buyers, help you set the sale price, negotiate any sale and handle the other time-consuming matters involved in a property sale. A real estate agent is required by law to negotiate the best possible price for you.
Any real estate agent you engage must have a valid licence to work in Queensland. It’s advisable to speak with three or four agents ahead of putting your house on the market. Discuss with each their view of the state of the property market, their plan to market your home and the likely asking price. The agent might suggest an asking price based on a comparative market analysis (CMA), which compares at least three properties that are: of similar standard or condition to your home; sold within 5km of the property; and sold in the last six months.
Alternatively, consider hiring a property valuer who will give you a written report that sets out how they reached their conclusion. There may be circumstances where this may be necessary (such as if the sale is of a deceased’s property).
Compare the quotes the real estate agents give you before proceeding to an appointment. Don’t forget to ask about the agent’s expenses, which you will need to reimburse but only if you’ve pre-authorised them. Ask them for a detailed statement of all expenses and a marketing plan that outlines how, when and why they will spend your money.
Appointing a real estate agent
The ‘appointment of a property agent, resident letting agent or property auctioneer’ form must be filled in to formalise your arrangement with a real estate agent. This form details: how much the agent will charge as commission for their services; what other costs they may incur on your behalf (such as advertising); when your payments are due to the agent; what services the agent will provide, and how they will provide them.
You should read the terms of the form carefully and if you are speaking with a legal professional, have them check it thoroughly as well.
There are a number of different timeframes and types of appointment of real estate agents. You may choose a single appointment for a one-off service, which includes selling your house, or a continuing appointment in which the agent will perform a number of different services for you.
The different types of appointment including an open listing, exclusive agency and sole agency. The type you choose affects: who can try to sell your property for you and who is entitled to commission when the property sells.
In an open listing, you can open list your property with several different agents at the same time but will only pay an agent commission if they sell your property. In an exclusive agency appointment, you have to pay the agent their commission when your home is sold, regardless of who actually sells the property. This means that if another agent sells the property, you could potentially pay two commissions. In a sole agency arrangement, you pay the agent their commission once your home is sold, unless you make the sale yourself.
Most agency appointments are for a maximum term of 90 days with either party able to end the appointment with 30 days written notice (if the appointment is for more than 60 days).
When you sell your home, you will need to pay a commission to your real estate agent. The commission must be set in writing when you appoint your agent.
The contract of sale
A prospective buyer makes an offer to buy your home by signing the sale contract. You can respond by signing the contract, which will signify acceptance, rejecting the offer by not signing or responding with a counter-offer. The contract becomes binding once you and the buyer have both signed it.
At this stage you should discuss the contract with an independent legal professional like our property experts at Big Law. We will ensure you’ve read, understood and accept the contract’s terms and conditions; that the buyer has signed it properly; that all the details about the property (including its address and property type) are correct; and that you include the appropriate condition in the contract to pass covenants and agreements onto the buyer.
If you make a counter-offer, a buyer can accept it by initialling the changes on the contract document. If they do, the contract becomes binding. Likewise, if the buyer makes an alternative counter-offer which you accept, all changes must be initialled or the contract may become invalid.
The contract should also set out the details of the deposit to be paid by the buyer, including payment date and method. It must also include a warning statement in it that provides details of the five business days statutory cooling-off period and the termination penalty of 0.25% of the purchase price if the buyer terminates the contract during the cooling-off period.
The importance of independent legal advice
Because property sales involve a contract, the wisest thing to do is to consult legal professionals such as Big Law who have years of experience in property and conveyancing matters before you decide to sell your house.
We can give you a detailed plan of our services and costs in relation to your property sale. How we’ll help you includes drafting a contract of sale to make sure the terms are appropriate and reasonable, help you complete the disclosure documents and check the contract before and after you sign it. We can also review your arrangements with your chosen real estate agent/s.
Once you have a buyer, we will conduct any dealings with the buyer (or their solicitor) to: alleviate any problems that may arise during pre-settlement inspections; sort out payment of the sale price and transfer of property title at the time of settlement.
At Big Law we provide holistic legal solutions to legal matters.
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