Se
lling a property is one of the biggest decisions and investments in your lives, so you want to make sure it is done correctly.
One of the benefits of Catron Simmons Lawyers, is that you know exactly who is handling your matter and we are just a phone call away for any questions you may have. We also have the ability to be wholly electronic meaning there is no requirement to attend our office in Bella Vista unless, you wish too.
There are two main ways of selling a residential property: by private treaty and by auction.
Private treaty
When you sell your home by private treaty, you set a price and the property is listed for sale at that price.
Benefits of a private treaty sale:
- greater control over the sale
- time to consider offers by potential purchasers
- the ability to extend the time for which your home is for sale indefinitely
- potential purchasers must make offers for your property ‘blind’, without knowing what other buyers think it is worth.
Risks of a private treaty sale that should be considered:
- if the price you set is too high, your property may not sell
- if the price you set is too low, you may miss out on maximising the selling price.
You should also be aware that when a property is sold by private treaty, the buyer has a five day cooling-off period during where they can withdraw from the sale.
Auction
To sell through an auction process, the amount you want for the property is generally not revealed to potential buyers who are encouraged to attend the auction and bid for the property against other potential buyers.
Auctions have become an increasingly popular way to sell or buy residential property, but before you decide to go down that path, do your homework and familiarise yourself with the process and what it involves.
Setting a reserve price
The reserve price is the lowest amount you are willing to accept for your property. Before bidding begins, advise your agent what you nominate as the reserve price. This is usually not told to the prospective buyers.
If the highest bid is below the reserve price, the property will be ‘passed in’. You will then either try and negotiate a price with interested bidders or put the property back on the market.
If the bidding continues beyond the reserve price, the property is sold at the fall of the auctioneer’s hammer.
Successful bids
The successful bidder must sign the sale contract and pay you a deposit on the spot (usually 10 per cent). There is no cooling-off period for anyone who buys a property at auction. If the property is passed in at auction but contracts are exchanged on that same day, the cooling-off period still does not apply.
At Catron Simmons Lawyers we can help assist and take away the what often feels like a confusing and stressful time. We are here to guide you through the process and ensuring it as smooth as possible.
Selling a Property - Stages of purchase
Selling your home is an important and can be a dauting experience, but it doesn’t need to be with the assistance of Catron Simmons Lawyers.
We charge fixed fees for most conveyancing matters, depending on their complexity.
Before the Property goes on the market
Before the property enters the ‘market’ a contract for sale needs to be prepared along with required legal documents. This is commonly referred to as a draft sale contract as the contract can be subject to negotiation.
Often as the Seller you will hire a real estate agent to take care of the “Selling” of the property. The estate agent takes care of the advertising of the property, open inspections and potential buyers.
Offer & Acceptance
An offer will be made for the property, if you accept, the purchaser will likely be asked to pay an initial deposit. It is important to remember this does not “secure” the property.
The Contract / Exchange
When the contract is signed the purchaser will often need to pay 10% deposit at this time unless negotiated otherwise. This money is paid to the real estate agent and held until settlement.
If you have sold the property under Auction conditions, it is important to understand that there is likely to be no ‘cooling off’ condition for the purchaser.
If you have sold the property under a private treaty conditions, there is typically unless negotiated a five-day cooling off period.
Contract to Settlement
After the contract has been signed, your solicitors will make a number of enquiries/tasks including but not limited to:
- Payment of Fees and Government Charges
- Liaising with the financial institutions
- Checks with Government organisations such as Sydney Water, RMS etc to ensure they don’t have a caveat or interest in the land
The solicitor will also be required to attend the settlement conference involving the banks, real estate agents and other party’s solicitors. This is where the title for the property and keys will be handed over in exchange for the monies.
What is the difference between a Solicitor and/or Conveyancer?
Whether you hire a conveyancer or solicitor, it is critical to hire them at the outset of your transaction.
The advantage of hiring a solicitor is a greater level of knowledge in various areas of law, meaning that any legal issues that potentially arise can be quickly dealt with.
Solicitors are typically more expensive, however, if there is an issue that arises while using a conveyancer often you are required to pay double the amount as you are then forced to hire a solicitor.
A solicitor generally able to provide a more focused client-based approach to the transaction.
What is the difference between a private treaty or sale and an auction?
A private treaty occurs when a property is listed for sale, the purchaser makes an offer and it is accepted by the vendor. The contract is then signed and contracts are exchanged. There is typically then a cooling off period of five business days.
An auction is where prospective purchasers gather following a sale period and bidding is conducted on the property. Once the property is placed on the market is is a case of the highest bidder wins the property. Typically the purchaser signs a waiver of their cooling off rights.
Should I use a local conveyancer / Solicitor?
You do not need to use a local conveyancer and/or solicitor, they must however, be registered within NSW.
At Catron Simmons Lawyers we can operate wholly electronically so there is no need to come into the office. Alternatively if you prefer however, we do of course accept in house appointments at no extra charge.
Do I need a contract before the real estate puts the property up for sale?
Yes, by law there must be a valid contract in place before the property is able to be marketed.
What is included in the sale of my property?
Typically, a property is sold ‘as is’, which means that any fixtures are included in the price.
A fixture is anything that can not easily be taken away without doing damage to the property.
A fixture can be excluded from the contract of sale and it is common practice that fixtures are expressly included in the contract to avoid legal disputes.
Common Fixtures include but are not limited to:-
- air conditioning
- ovens
- fixed floor coverings
- above-ground pool
- curtains
Do I need to include anything in respect to our pool?
If the property for sale has a swimming or spa pool, one of the following must also be attached to the contract from 29 April 2016:
- a copy of a valid certificate of compliance, or
- a valid occupation certificate (issued in the past 3 years) and evidence that the pool has been registered, or
- a valid certificate of non-compliance.
This requirement does not apply:
- to a lot in strata or community schemes that have more than two lots, or
- for any off-the-plan contract.
More information.
To check if your pool has been registered look at the NSW Swimming Pool Register here.
What is a deposit bond?
A deposit bond is essentially an insurance policy, the bond is a policy document that tells the vendor that the insurance company will pay the 10% of default of the contract.
Come settlement the deposit bond, the purchase price is paid in full and the bond simply lapses.
If I am selling a house do I have to have a contract ready?
Yes, you or your agent cannot advertise a property to be sold without a contract.
Do I need to obtain a Foreign Resident Capital Gains Withholding (FRCGW) Certificate?
Foreign resident capital gains withholding (FRCGW) applies to all vendors disposing or selling of property under contracts entered into from 1 July 2016.
FRCGW is different to the foreign person surcharge when purchasing a property but is often confused.
The withholding obligation applies to both Australian resident and foreign resident purchasers.
The FRCGW tax rate is currently set at 12.5% and applies to any real property disposals where the contract price is $750,000 or more.
More information on FRCGW
Frequently used terms in Property
Caveat – A notice on the title proclaiming an ‘interest’ over the property (other than the owner)
Certificate of Title – A document that shows the ownership and interest in the land/property under the Torrens System of title.
Easement – Right to use the land of another or a right to prevent the owner from using the land in a particular way. Common easements are drainage and electricity.
Lien – A charge, security or encumbrance on a property for the payment of debt.
Reserve Price – The lowest acceptable price fixed by the vendor.
Vendor – The person/unity selling the property.
Zoning – a local planning tool, controlling the current and future prospects of the land.