Getting ready

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This fact sheet is general information only. If you need a lawyer, try LawMatch™ a free service that matches you with a lawyer who meets your legal needs and preferences.

Thinking ahead

It's worth spending a little time thinking about some of the legal aspects of selling your house before you launch into the sale. Some of the issues you should think about are listed below. And to make it easier for you, have a look at our Seller's Checklist.

Private sale or auction?

Good question? This will depend on a whole lot of factors, including the state of the market, the interest or potential interest in your property, whether you are in a rush to sell and so on.

If you are unsure, get advice. The best way is to ask a number of agents in your area.

Features of auctions

Some of the features, which may influence your decision, include:

• Competitive bidding.
• Sale is made once the hammer falls.
• Certainty of a set date for the sale, assuming the reserve is reached.
• Allows for further negotiation with unsuccessful bidders if the reserve is not reached.
• May suit properties in highly desirable areas where competition between buyers is high.

Features of private sale

Some of the features, which may influence your decision, include:

• Plenty of time to look at each potential buyer.
• Extended period for sale.
• Buyer doesnt know what the seller believes is the right price.
• No auction costs.

The sale price

What will be your magic figure? There are a number of ways you can try and get a feel for your top and bottom figures.

• Follow the sale prices in your area and get a sense of how marketable your property will be.
• Visit other auctions of comparable properties.
• Ask a number of agents for an assessment (keep in mind that they can pitch it at a high price initially so that you will decide to use them).
• Get a formal valuation from a qualified valuer - this costs money!
• Make sure that your sale price covers the pay-out of your mortgage and any other costs - agents fees, legal fees, etc.

Setting a price

At the bottom line, despite the advice you take, you will have to decide what price (or auction reserve) will apply to your property. In general the price is determined by a combination of:

• Location
• Size of property
• The age of the premises
• State of the premises
• The style
• Interest rates
• Property availability
• Buyer demand
• Most potential sellers study the local market and auction results to get an idea of a suitable price. These are available in the newspapers.
• Of course an estate agent will be prepared to offer guidance, with no obligation to engage the agent. You can also seek other views. It is also possible to employ a registered valuer, but this attracts a fee.

Researching on the internet

Everyone takes out the magnifying glass and rifles through the newspaper auction results, but it is also well worth taking a tour through one or more of the many internet real estate sites. Some have complex database information sales and median house prices. This is also often true of the State real estate institutes sites.

What is included?

Many buyers take it for granted that everything they see in the property will be included in your sale. This is not necessarily true. It is up to you to decide what will be specifically excluded in the contract. Buyers will usually assume (but it is subject to the contract) that an attachment like a burglar alarm or curtains is part of the property and be included in the sale price. The contrary is also usually true, so if its not attached it is more likely not to be included. In that case you will want to ensure that the item is specifically included in the contract as part of the sale. If there is any doubt about an item, attached or not, make it certain! Make sure you have considered the:

• Curtains
• Blinds
• Burglar alarm
• Washing machine, refrigerator and other white goods
• Light fittings
• Television aerial
• Awnings
• Clothes line
• Above ground pool and equipment etc

Legal advice?

At some stage you will need to decide who will do your conveyancing. We talk about the options in our "Conveyancing what to do?" fact sheet.

It's well worthwhile making this decision early as there are a number of preliminary services you could ask for that can make this entire process easier and possibly cheaper.

For example:

• Advice about the authority you will be asked to sign by the agent. This may result in negotiating terms with the agent that could save you down the track.
• Advice about what is needed to prepare a draft contract, ie, the warranties and disclosure documents that must be provided.
• Advice about potential problems if you have done work to the property, e.g. renovations.
• Checking with your bank about any early repayment fees.

Who does the selling?

Once you decide to sell your house, you need to decide who will do the selling.

You can do it yourself, but this may not be time effective. You will need to allow for preparing advertisements, placing these in newspapers, organising a billboard, showing interested buyers through the house and preparing initial documents.

Choosing an agent

There are a number of factors you should consider when choosing an agent.

1. What is their track record in your area?
2. What is the advertising strategy have they had any properties in the special classified sections of the newspapers?
3. What are their advertising costs?
4. If you are selling by auction - see what their auctioneers are like - go to some auctions and check out their style.
5. Will they negotiate fees?
6. What other conditions will they negotiate?
7. What's your "impression" would you buy a property from this person?
8. Do they understand your property and your needs?
9. Are they subject to a professional Code of Ethics and in what way is the agent accountable for the conduct?

Remember you can appoint more than one agent.

Using an agent

If you decide to use an agent, you will be asked to sign a contract/authority. The types of contract/authority are different in each State/Territory.

Keep in mind that these agreements may not be drafted in your favour. Make sure you read the documents and if you don't understand them, get legal advice.

Agents' fees

Agents' fees are not regulated by any law - so feel free to negotiate.

Make sure you ask about advertising costs. The agent may get a discount for news classifieds and you may be able to negotiate to have this discount passed onto you (in some States an agent is not allowed to keep an advertising rebate).

Be careful to ensure you understand what you are getting for your fee. For example, does it include advertising costs, or some aspect of the advertising? What about other types of promotion? Does it include open house inspections? Remember, if you dont know what is included in the fee you may not be in a position to determine what is the best service and commensurate fee. In other words, make sure you are comparing apples with apples.

Checking the title

It is your duty to give "good title" at the time the property is sold.

This means:

• that you must see that there is nothing preventing the buyer's purchase of the property; and
• that the buyer has all the documents necessary to be registered as the owner.

The title will list any person who has an interest in the property. For instance, it will name the registered mortgagee (usually a bank or similar). It will also list any caveats - a caveat is an alert that someone else claims a financial interest in the property. Neither of these things mean the property cannot be sold, but they (especially a caveat) will need to be discharged before or at settlement.

Make sure you have either the original title or a copy of the title before you get the ball rolling. The title is the starting point for the Vendors' Statement.

The jargon

Caveat - a warning that someone has a financial interest in the property.

Land Titles Office - the office where all duplicate titles are lodged and kept.

Mortgagee - the bank/finance company which lends money.

Mortgagor - the person who borrows money.

Purchaser - buyer.

Strata title - this type of title is often used in units. There are slightly different requirements when you sell a strata title.

Vendor - seller.