Sell Your Home

Types of agreements

• Exclusive agency agreementWhere a real estate agency gains exclusive rights to the sale of the property during a set time frame
• Sole agency agreementSimilar to an exclusive agency agreement, although you have the right to sell your home as well as the agent. If you are successful in gaining a sale yourself, you do not pay agent’s commission
• Open agency agreementYour home is listed with numerous real estate agencies. The agency who secures the sale is paid the commission
• Auction agency agreementYour home is listed with an exclusive agent and put to auction, usually after four weeks of marketing
• Multiple listing agency agreementYour agent works with a co-operative network of agents to gain a sale

Selling by private treaty
Private treaty is when your home has an asking price and is sold by negotiation.

Benefits of this method of sale are:

• You are able to reflect on buyer’s offers
• The buyer doesn’t know what other buyers have offered
• Not as stressful for sellers as an auction

Negotiation
When choosing to sell your home by private treaty, buyers will submit offers to your agent. As the seller you may choose to accept the offer or negotiate with the buyer by way of a counter offer. Your agent will act as a ‘go-between’ until you reach an agreed price.

Should the buyer wish to negotiate changes to the contract of sale such as settlement period, fixture inclusions and cooling off periods, you will need to advise your solicitor so that the contract of sale can be altered to reflect the agreed changes.
Exchange of contracts
The exchange of contracts is when you and the buyer each sign a copy of the contract of sale and then physically swap contracts. This process is completed by your agent, solicitor or conveyancer.

Upon exchanging contracts the buyer is required to pay a deposit.
Deposit
Deposits vary depending upon which state your home is in. The deposit is usually 10% of the purchase price. However, this is open to negotiation and is commonly reduced to 5%. In some states the deposit is a set amount, usually between $500 and $1000. This is common in WA, where there is no cooling off period.

Some buyers may request a reduction in deposit due to wanting to reduce the fees charged in gaining deposit bonds or they may require the funds for other purposes.

The deposit is usually held in a trust account by the agent or solicitor for the mutual benefit of the buyer and seller.
Cooling off
Upon exchange of contracts the buyer usually has a cooling off period of 2 – 5 days depending upon which state your home is located in. In Western Australia and Tasmania there is no cooling off period.

The cooling off period allows the buyer to withdraw from the sale. Should the buyer withdraw from the sale during the cooling off period, you have the right to retain 0.25% of the deposit amount. In Victoria the seller is able to retain 0.2%.

Cooling off periods can also be waived, reduced or extended by negotiation. There is no cooling off period when purchasing at auction.
Settlement
Settlement is when the buyer pays the balance of the purchase price and becomes the legal owner of the property.

The settlement period is usually between 30 – 45 days after exchange. However, this can be negotiated to meet the buyer and your needs.

Once settlement is completed, your solicitor will contact your agent to advise them to hand over the keys to the buyer.
Selling at auction
At auction, buyers bid against each other in a public forum. As the seller, you will set a reserve price prior to auction. This is the minimum amount you will accept for your home.

Benefits of this method of sale:

• Buyers bidding against each other can maximise your sale price. With the emotion on auction day, buyers can become very competitive
• Provides a final date for sale, enticing buyers to act quickly
• Stronger advertising campaigns to reach buyers
• Allows you to negotiate with the highest bidder if your home is passed in on auction day

Prior to auction
Leading up to the auction day you should have a strong marketing campaign in place to attract as many buyers as possible. Usually an auction campaign will run for a period of 4 weeks.

Some buyers may try to secure your home prior to auction day by submitting an offer. You should discuss with your agent whether they feel the offer is in line with the market. If you are happy with the offer, your agent should have the contracts exchanged prior to the auction date.

If your home goes to auction, you will need to set a reserve price. This is the minimum amount that you will accept as the sale price of your home. The reserve price is set prior to the auction and is not disclosed.
Auction day
On auction day you have the right to a single vendor bid, as long as the right to bid is noted in the conditions of sale in the contract. When your bid is made the auctioneer must state that it is a vendor bid.

When bidding reaches your reserve price the highest bidder will be committed to purchase your home.

If bidding does not reach your reserve price, your home will be ‘passed in’. The highest bidder will then have first right to negotiate with yourself and your agent.
Contracts
The successful bidder must sign the contract of sale and pay the deposit at the end of the auction. There is no cooling off period for homes sold at auction or immediately after auction.

Disclaimer
While we take reasonable steps to ensure that the above content is correct, we cannot ensure that it is accurate, up-to-date or complete, particularly where it has been provided to us by a third party. Nothing on this Website is intended to constitute professional legal, investment or real estate advice. Please see our legal terms below for further details.