Selling a Property

Practice Areas > Selling a Property

Choosing a Real Estate Agent

It is always recommended that you shop around for a real estate agent to sell your property. Agents base their commissions on a percentage of the sale value of your home. You should always negotiate the commission rate with an agent to better your return on the property.

Never hesitate to ask an agent for an estimate of their costs, fees, commission rates and services you are to receive for their fees. Most importantly, ask the agent about the costs involved in advertising your property, what (if any) mark up they may add to those costs and what their advertising plan is likely to be. Also, don't be afraid to ask what their "clearance rate" is in relation to properties sold privately and at auction. Ask for proof if you are unsure that all you are being told is little more than a sales pitch.

Before engaging an agent to sell your property, make sure that the agent advises you of all commissions and other outgoings are negotiable. They are required to do so. Also, be sure to check you are happy with the "plan of attack" the agent proposes in selling your house.

Authority to Sell - The Agreement

Your authority contract should clearly state:

·How your property will be sold (auction / private).

·If the agent has general or exclusive authority. In most cases, the agent will be looking to have an exclusive authority so that only it may be entitled to the commission for the sale of your property.

·Length of time in which to sell the property (30, 60, 90 days)

·Commission with GST. Commission is negotiable and can be a percentage of the sale price, or a flat fee. A percentage quoted must be expressed as a dollar figure.

·Circumstances in which an agent is able to claim a commission

·All marketing expenses. Do not be afraid to negotiate on these.

Your agent must also include a rebate statement and a complaints statement.

Complaints Statement

A complaints statement explains that you are entitled to lodge a complaint with Consumer Affairs Victoria if a dispute over commission or outgoings arises.

Contract of Sale and Vendor's Statement (section 32)

If you are selling a property, you will need a contract of sale and section 32 Vendor's Statement to be prepared. These are usually complex and require specific detail to be included.

Under theSale of Land Act 1962(Vic), the section 32 Vendor's Statement must provide details about the financial, legal and planning aspects of the property before a contract of sale or contract note is signed. It is essential that this document be comprehensive and accurate and not contain any misinformation. If the section 32 Vendor's Statement is either not complete or is not accurate, it may be possible for the purchaser to sue the vendor for damages suffered as a result of the Vendor's Statement being misleading.

mdp McDonald Partners has extensive experience in preparing contracts of sale and section 32 Vendor's Statements. Our property team can assist you with preparing these documents in anticipation of the sale of your property.

Settlement

Settlement is the culmination of a conveyancing transaction. It is the point where the vendor hands over documents to enable the purchaser to become the registered proprietor of the property in exchange for the balance of the funds promised in the Contract. The key to a smooth settlement is preparation. It is important to keep the client informed of the settlement details and of their right as a purchaser to a final inspection of the property.

Arrangements are made between the conveyancing practitioners as to the settlement time. Settlement follows title. Therefore the purchaser is obliged to settle at the place nominated by the vendor.

Prior to settlement there are certain calculations to be made so that the client can fulfil their obligations at settlement. The statement of adjustments and settlement statement must be calculated and checked so that each party is aware of the amount of the funding required to complete settlement. Arrangements have to be made to clear a vendor's title, including pay-out figures from any mortgagee or caveator. A final search of the title is made to check the information obtained from the Register within the preceding 105 days. This search is usually done on the morning of the settlement day. Arrangements should be made regarding the keys to the property. They are usually left with the Estate Agent selling the property.

After settlement stamp duty has to be paid as well as registering the new purchaser's name on the title. Paying outstanding rates and taxes and sending notices to all relevant authorities of the change of ownership must be completed within a month of the settlement date.

mdp's property team can assist with the arrangements before and at the settlement, including finalising all documentation and attending the settlement.