If you’ve been living and working in Australia for a while, the time may come when you need to sell your property. Maybe you want to upgrade to a bigger place or maybe you are considering heading back to your home country.
From buying your own property, you will already know that the selling process tends to move fast Down Under. With no laborious chains clogging up the exchange process, the market seems efficient to many Europeans, although you’ll need to make a tactical decision about whether to buy your new property before or after selling your current one. You may also be wondering about when is the right time to sell, but that has traditionally been less of a vexed question in the steadier Australian market. However, whilst it is less prone to rapid price fluctuations, keep an eye on the news as there are signs that a downturn may gather pace in 2019.
Whatever your circumstances, here is our no-nonsense guide to avoiding to more common pitfalls when selling your property Down Under.
Do you need an estate agent?
Of course, nobody likes handing over 2-5% of their sale price to an estate agent, so we will discuss other possible options below. But if you’re sure that going with an estate agent is right for you, bear in mind that there are some sound reasons to be wary. An unscrupulous estate agent may overvalue your first property just to secure your business or undervalue your property to make a speedy sale. First, do your homework. To get an accurate gauge of the worth of your home, monitor sales and auctions for similar properties in your area, or just get the verdict of an independent valuer. Then if the market valuation offered by estate agents is not in the same ballpark, consider that a potential red flag.
When meeting agents, don’t jump in feet first. Before you sign on the dotted line, get concrete answers to the following questions:
- Are they state licensed?
- Who will be handling your property? Beware of agents who hand over the day-to-day responsibility to a less qualified junior salesperson.
- What is their marketing plan? Is advertising included in their commission or is that an extra fee? If so, how much?
- What specific measures can you take to make your property more appealing to buyers?
- Will they provide you with regular updates? How often?
- Will they sign a quotation guarantee that means that the agent won’t get paid unless the price is achieved?
Although many agents don’t volunteer this information, commissions and fees are usually negotiable. However, you will usually have more leverage to bargain down the fees if you are prepared to give the agent exclusive authority to sell your property, rather than allowing several agents to sell your property as an open listing. If you’re weighing up exclusive versus open listings, check out this article for a good summation of the pros and cons of each. Once you find an agent you’re comfortable with, some Australian states permit a cooling-off period for agency agreements in addition to limiting how long an exclusive agreement can last (one month should be enough to find out if the agency is doing its job).
How to guard against sharks
Rogue agents can be very persuasive, so remember you have recourse if you start doubting their trustworthiness. State consumer protection agencies have made moves to protect homeowners from estate agent malpractice since under-quoting to drive interest became a major issue in the industry. If you have any concerns or complaints, get some advice from the fair trading authority in your state.
- Australian Capital Territory – Office of Regulatory Services
- New South Wales – Fair Trading
- Northern Territory – Consumer Affairs
- Queensland – Office of Fair Trading
- South Australia – Consumer and Business Services
- Tasmania – Consumer Affairs and Fair Trading
- Victoria – Consumer Affairs Victoria
- Western Australia – Consumer Protection
Other options: Auctions and private sales
Most of us have witnessed the high stakes drama of a house auction on television. Estate agents figure that the intense competition is good for driving prices upwards with no theoretical limit. It also results in a certain sale once the reserve price is reached. Auctions can be good for homes in highly desirable areas and/or unique or exceptional properties that are difficult to price. But if your property is unlikely to get pulses racing, an auction might result in disappointment.
With no auction or agent fees, private sales can be a good way forward if you’re a cost-conscious seller with an accurate idea of your property’s worth. You will have to do the legwork in terms of advertising and showing the home of course. Interested parties make blind offers which may work to your advantage and also give you more time to consider the offers.
The selling process – step by step
Once you have decided how you want to sell your property, there are several steps to follow before your home is sold.
- Prepare the vendor statement for your property
- Ask your solicitor or conveyancer to prepare the contract of sale including all of the details that prospective buyers will need
- Advertising will involve taking pictures of your property, drawing up floor plans and posting online ads
- Interested parties will contact you or your agent to arrange times to view your property or attend your open home
- Once an offer comes in, you and/or your agent will negotiate further to find a mutually agreeable price. To go ahead with the sale, the buyer will need to transfer a deposit
- The fine details of the sale will need to be ironed out between the buyer and seller – and their respective solicitors and banks
- Assuming the exchange process goes smoothly, you’ll receive the balance of payment from the buyer or their bank
- Time to shake hands and pass over the keys!
The extras – fees and taxes
Apart from the estate agent commission, marketing costs and conveyancing fees, remember that your bank might charge you an early exit fee to get out of your mortgage.
Generally speaking, capital gains tax is not applicable if the house you have just sold was your main home and you did not use the property to earn money. In other circumstances, and if your house is situated on land more than two hectares in size, you might be pushed into the capital gains bracket. If that seems likely, you will need to consult an accountant.
Tips to get a quick sale
This point bears repeating: you have to be realistic about price from the beginning. There is no point being over-ambitious about your sale price if it means that your house languishes without a buyer for months. For most of us, time is money. So getting an accurate gauge of the price as your first step is essential.
Then ask yourself whether your home is show ready. Your estate agent should advise on major modifications if necessary, but more cosmetic maintenance during the showing period is essential. This usually means de-cluttering and sprucing up the decoration before the first potential buyers even walk in. Psyche yourself to wake up early before viewings to vacuum, dust and clear all work surfaces and tables. Better crack open a few windows while you’re at it – and good luck!