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If you're thinking of selling your home, there's plenty about the process to consider.
No matter if you're upsizing your home, downsizing from your family home, or selling an investment property, the whole road to selling a home is a complicated one. This may be especially true if you're buying and selling at the same time. But as long as you take the right approach you'll give yourself the best opportunity to achieve or exceed your desired price.
Key concepts covered here include:
Let’s kick this off by giving you a big picture overview of the selling process, with useful tips on how to sell your home.
Breaking the selling process into a series of clearly defined stages is the easiest way of understanding what is involved.
The first step is to get an idea of what similar properties to yours sell for. It’s as easy as jumping online to research what is for sale, or what has recently sold in your suburb. OpenEstimates, by OpenAgent, is an online estimation tool that will give you a ballpark figure for what your property is worth.
The first step is to get an idea of what similar properties to yours sell for.
Once you have got it down to your suburb you can use the filters to refine your search to the number of bedrooms. This will give you a ballpark idea of what your property is worth.
The next step is to get a more accurate idea of how much your property is worth with a valuation or appraisal. An appraisal is a free estimate of your property’s current market worth, given by a local real estate agent. A valuation, on the other hand, is a written report prepared for you by a dedicated property valuer who charges a fee for their service.
Appraisals are largely expert opinions based on current market conditions, while valuations are purely focused on the value of the physical property and do not take into account what other properties are selling for.
Want to sell your own home or thinking of selling your house without an agent? You have the option of selling your property yourself, although most homeowners choose to partner with a real estate agent.
An experienced local agent represents you in the sale process, advising you on a fair sale price and the best method of sale as well as handling expressions of interest and negotiations with potential buyers.
They also help you market the property online and via print to ensure your property gets the most possible exposure.
Making sure your property is presented in its best possible light is one of the most important stages of the selling process. From smaller jobs like painting, upgrading fittings and fixtures, decluttering and adding some greenery right through to full-blown renovations, there's a lot to consider.
Making sure your property is presented in its best possible light is one of the most important stages of the selling process.
Be sure that whatever time, money and energy you choose to invest in sprucing up your home will be returned with interest. If you're going to spend months on renovations that aren't going to significantly improve the value of the property, it might not be worth it. Your agent should be able to offer some great advice here.
Home staging, also known as home styling, is also a very cost-effective way to make sure the space is looking its best for incoming buyers as well as for photography.
Your real estate agent will now list your home for sale and arrange for people to view your home via open homes and inspections. This gives people an opportunity to see your property in the flesh and even submit offers to your agent. These typically happen on a weekend or weekday evening to maximise the number of potential buyers who can visit your property.
If you're selling at auction, the highest bidder becomes the new owner of your property, while in a private sale you need to accept a buyer’s offer. Your solicitor or conveyancer will then prepare a contract of sale and both parties will negotiate the terms and conditions before signing. There is then a settlement period of around six weeks (depending on where you live) until your property is legally sold.
Let’s now move on to costs and how much you can expect to budget for each service.
Many sellers overlook all the costs associated with selling a house or unit, beyond the more apparent ones like your real estate agent fee or commission. Knowing all of these costs in advance allows you to budget accordingly and work out more accurately how much profit you could walk away with.
Knowing all of the costs associated with selling a property in advance allows you to budget accordingly.
The most common costs involved in selling property include:
Your real estate takes a commission—a percentage of the sold value of your property—for their services. As the largest single cost in a property sale, it's important to understand how they work. Agent commissions vary from state to state, and even suburb to suburb, and you're free to negotiate these with an agent.
Depending on where you live, agents may charge anywhere from 1.6 per cent to 4 per cent of a property's sale price. Real estate commissions are also taxable, so are subject to GST.
Example: On a $500,000 property sale price you could be paying:
There are two different commission structures that real estate agents use:
There is a cost to marketing and advertising your property for sale, which includes photography and online listings, printed brochures and signage. Some real estate agents include these costs in their commission structure, but others charge for these elements separately. You should expect to budget to pay between 0.5 per cent and 1 per cent of your property sale price on marketing and advertising.
Example: If your home is worth $500,000, this would be anywhere from $2,500 to $5,000, based on that percentage range.
If you sell your property via auction you will need to pay the auctioneer a fee. This should require a rough budget of between $400 and $500.
The sale and transfer of a property is a legal process, so you will need the services of a conveyancer or solicitor to help you with all the documentation. This includes drawing up the contract of sale and processing the transfer of ownership.
Conveyancers are generally cheaper than solicitors, although they exclusively deal with the legal transfer of property. As a rough guide, this may cost around $800 to $1,000.
Some banks or lenders will charge a fee to cover the paperwork involved in closing your mortgage. If they don’t you can crack a smile, but plan to budget around $1,000 for this.
Most homes will need a little TLC to make sure that everything is working and the property is well presented for viewings. You may need to do some painting, fix any dripping taps and give the garden a tidy. This will help get you the best possible sale price for your property.
After the sale of your home, you will likely need to budget for a removalist to move all your furniture and belongings to your new home.
*These figures are all rough estimates and should be researched in further detail to get a clear idea of the actual cost.
Now that you have a better idea of all the costs associated with a home sale, we can move on to pricing your property.
Pricing your property can be a tough call. Set an asking price that is too high and you risk scaring off buyers and having your property languish on the market. Set an asking price that is too low and you risk selling yourself short.
You also need to have your finger on the pulse of the market in your local area. In a ‘hot’ market, when buyer demand is high, prices can be driven up quickly thanks to that heated competition.
You need to have your finger on the pulse of the market in your local area.
In a ‘cold’ market, where buyer demand is weaker, you have to focus more closely on marketing your property and setting an attractive price. Seasonality also plays a role in the selling cycle, with a traditional peak in spring, though summer is also popular for listings.
A good local real estate agent can help you with pricing and timing strategies as they are highly attuned with current market conditions.
If you're working with a real estate agent to sell your property, choosing the right one is one of the most important parts of the entire sale journey. Why? An experienced local agent is invaluable in helping advise you on all aspects of the process, including setting the right price, presentation, negotiating with buyers and ultimately getting the best possible result for your property. Ideally, they should have a good sales record in your area, be a great communicator and have a fair commission rate.
Ideally, your real estate agent should have a good sales record in your area, be a great communicator and have a fair commission rate.
Once you have chosen an agent, you will need to decide how to sell your property.
Deciding on the right sale method—be it auction, private sale or expression of interest—comes down to a few factors. These can include local market conditions and what is most popular or common in your particular area.
Auctions are often recommended by agents in a ‘hot’ market where demand is high, but this is not a hard and fast rule. One advantage of an auction is that it is a fast process, with the settlement typically done within a month.
Deciding on the right sale method—be it auction, private sale or expression of interest—comes down to a few factors.
Selling via private treaty is typically more straightforward and involves an interested buyer making an offer via your agent. You then negotiate and settle on a fair price before signing a contract. Sale via expression of interest is similar, but your agent will approach potential buyers directly with a view to them making an offer for your property.
Once you have decided which sale method to use you start getting your property ready for sale.
If you want to realise the highest possible sale price for your home, you need to make it visually appealing. At the most basic level, this means tidying up and decluttering indoors and out, or even painting and getting the lawns mowed.
Staging your property for sale is a great way to maximise its presentation and give buyers the best sense of the space. For a fee, professional home stagers will reimagine your property with rented furniture and a range of other temporary improvements. The whole idea is to make the best first impression possible on potential buyers, as well as creating an optimal setting for professional photos to be taken. Expect to pay anywhere from $1,500 for a basic service, with prices scaling up depending on the size and layout of your home.
For a fee, professional home stagers will reimagine your property with rented furniture and a range of other temporary improvements.
Your agent will now list your property for sale and market it to the widest audience possible. This includes online listings, signage and brochures to hand out at open houses or inspections.
If you're selling via private treaty, your agent will now accept offers from interested buyers. These should be in writing, and if they are serious they will be prepared to pay a deposit to secure their offer. You may need to negotiate if you want to secure a sale. If you sell via auction, the sale is finalised on the day, assuming someone has met or exceeded your reserve (minimum) price.
Presuming you accept an offer, your agent or legal advisor will now prepare a Contract of Sale. This sets out all the terms and conditions of the sale including the final price, a settlement date, the deposit amount and what fixtures are included as part of the sale. You then exchange contracts with the buyer, which is a legally binding agreement.
The next step is settlement, where both parties' legal teams make sure all documentation is in order. This generally takes up to 6 weeks, depending on where you live. Settlement day concludes the sale process, when you hand over the keys and the buyer pays the balance of the purchase price. You can now pay off or settle your mortgage and calculate how much profit (or loss) you have made.
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