On this page:

• How to choose a real estate agent
• How much do real estate agents charge?
• Are all agency agreements the same?
• Should you choose a private sale or an auction?
• Putting an end to under-quoting

At an average of two to three percent of the selling price ($10,000–$15,000 on a $500,000 sale), commissions are a powerful incentive to close the deal.

Which is why a seller has two big worries: 

• An agent may overvalue your property just to land your businesses.
• An agent may undervalue your property so it sells fast. 

So how do you find a trustworthy real estate agent?

How to choose a real estate agent

1. Do your homework on price

• Keep a close watch on recent auction and sales results in your area.
• Consider hiring an independent valuer to determine the worth of your home.
• Visit properties for sale in your area so you can work out whether an agent is overestimating or underestimating the value of your property.
• Pay attention to how agents answer questions such as “why is the owner selling?”, “how negotiable are they on price?” and “how long has the property been on the market?” This will give you a sense of how agents might field these tricky questions regarding your property.

2. Do your homework on agents

When choosing an agent, here’s a list of things to consider:

• Proof that they’re licensed in your state.
• Are they merely a salesperson under the agent’s authority with less training and qualifications?
• Evidence of success in your area.
• A market value assessment that appears accurate based on your research.
• A signed market value estimate or even a price guarantee.
• Evidence of a marketing plan.
• Willingness to advise you about steps you can take to make your property more attractive to buyers.
• A commitment to give you regular reports and updates.
• Are you rushing into making a decision about which agent to go with? Go and see at least three agents.
• Are you engaging the first agent you visited? Many people get stuck in a sole or exclusive agency for a set period, even if they’re not happy with the agent.

3. Beware inflated valuations

Going with the agent who promises the highest selling price could be a mistake.

Although the Real Estate Institute of Australia (REIA) says it’s deceptive conduct, agents we spoke to said the practice of exaggerating property values to sellers is ingrained in the industry.

One former owner of a real state agency told us, “There’s an old saying in this industry that the biggest liar gets the job. The number one reason that agents give high valuations is to avoid losing business. The best way to protect yourself from the quote trap is to have the agent sign a quotation guarantee. This means getting the quote in writing, and signing an agreement stating that the agent won’t be paid unless that price is achieved.”

How much do real estate agents charge?

The two to three percent commission usually doesn’t include advertising costs, which can range from several hundred to thousands of dollars, depending on rates and where the ads are placed.

Agents’ fees can be structured in different ways:

• Some agents charge a higher commission – up to five percent – which includes some advertising.
• Some charge on a ‘no sale, no fee’ basis.
• Some agents chart signage and advertising costs regardless of whether your property sells.
• Some agents have low flat fees, but be sure you’ll also get a good price and their focus isn’t just a cheap, quick sale.
• A scale of commissions may be charged, particularly for more expensive properties. For example, you might be quoted 2.5% on the first $850,000, and 10% after that. This provides a further incentive for the agent to achieve a higher price.
• You may be charged a lower commission if you share marketing and promotion costs.

Fees – your rights and expectations

• Don’t pay an upfront fee – only pay your agent after the sale is completed.
• Some states require that all fees, including advertising, are set out in the agency agreement.
• All commissions and fees are negotiable, though this might not be obvious from your interactions with the agent.
• Any fees should be based on the service you receive. If you’re paying top dollar, for instance, you should get a full marketing plan.

Are all agency agreements the same?

No, there are three main types:

1. Open listing or general authority

Sellers can list with more than one agency, only paying commission to the agent that sells the property. While you may get more market coverage than with a sole agency, the sale of your property may not be as high a priority for the agents. There’s also a risk that you won’t achieve the best price if various agents are competing for a quick sale.

2. Exclusive authority/agency

The agent gets paid when the property sells, even if the sale is done by a different agent or by the seller. In this scenario, avoid getting locked into a lengthy contract. A month is long enough to see if it’s working.

3. Sole agency

Similar to exclusive agency, except the agent may not be entitled to a commission if you sell the property yourself.

If in doubt, ask a lawyer

Some states have a cooling-off period for agency agreements. Some also place limitations on how long an exclusive or sole agency can run.

Remember, you don’t have to accept the contract agreement an agent presents – you’re strongly advised to have it checked by a lawyer and changed if necessary.

Should you choose a private sale or an auction?

Some agents think the best price will be achieved at auction, where high emotion, pressure and competition among buyers can lead to higher prices.

Others say private sales are the way to go.

Ask different agents to explain the pros and cons of each approach for your situation.

There are no fixed rules about which types of property would be more suited to an auction or private sale, but each offers different advantages for the seller.

The advantages of selling your home at auction

• Competitive bidding, which means there’s no price limit. This can be good for unusual or particularly desirable properties that are hard to price.
• It’s a definite sale, assuming the reserve price is reached.
• A set date for sale encourages potential buyers to act quickly.
• Auctions can identify the most suitable buyers to negotiate with if a sale isn’t achieved at auction.

The advantages of selling your home by private sale

• You’ll have more time to consider buyers’ offers.
• Potential buyers make offers ‘blind’, without knowing what others are prepared to pay.
• Advertising expenses can be cheaper than for auctions.
• No auctioneering fees.

Putting an end to under-quoting

State consumer protection agencies have attempted to end under-quoting in recent years. Under-quoting is when real estate agents advertise a property for less than its estimated selling price, or less than what the seller will accept, in an effort to drive interest. 

From May 2017 in Victoria:

• The estimated selling price must be in the sales authority document and can be expressed in a range of no more than 10% ($500,000 to $550,000 for instance).
• The estimated selling price must be based on at least three legitimately comparable properties.
• Comparable properties must have been sold within the previous six months and be within 2km of the current property for sale in the Melbourne metropolitan area (and within 5km outside the Melbourne area).
• If the estimated price changes, the agent must inform the seller in writing as well as update the sales authority document and marketing material. 

From January 2016 in NSW: 

• Real estate agents can’t publish or state a selling price that’s less than their reasonable estimate.
• The estimated selling price must be in the sales authority document (agency agreement) and can be expressed in a range of no more than 10% ($500,000 to $550,000 for instance).
• Agents can’t use phrases such as “offers above” or “offers over” a certain price.
• If the estimated price changes, the agent must inform the seller in writing and update the sales authority document and marketing material.

Other states and territories have adopted similar restrictions. 

Get more advice

Each state government’s fair trading authority provides free advice to home sellers and buyers.

• ACT
• NSW
• Northern Territory
• Queensland
• South Australia
• Tasmania
• WA

The post A guide to selling your property appeared first on ÌÇÐÄVlog.

On this page:

•  Do you have what it takes to get the best price?
• How to choose the right site
• How much will it cost?
• Beware the upfront fees
• Can you two-time your agent?
• Marketing on the big sites
• Dot your 'i's and cross your 't's
• The steps: How to sell your property

Agents’ commissions are in the range of 2–3% plus GST. With the weighted average median house price close to $700,000, that’s a potential extra $14,000 in the seller’s pocket.

 Do you have what it takes to get the best price?

The extra money is tempting, but it’s no small task selling a property. You need to have the time to spare, presentation skills, the willingness to organise the legal work and valuations, not to mention negotiation skills and the belief that you can do as good a job as an experienced real estate agent.

Again, DIY real estate sites can help with some of this – such as photography, ‘For Sale’ signs and brochures. Some even offer negotiation services. But if you’re going down the path of selling your place yourself, you’ll still need to organise all the paperwork yourself and follow the usual legal steps. And while the sites offer online marketing – and plenty of offline marketing advice – local letterboxing and promotion is up to you if you want potential local buyers to know about your property. 

You’ll also need to arrange and attend viewings on the property yourself, which can be time-consuming and inconvenient.

How to choose the right site

So where do you start? There are a number of sites where you can list your home to sell yourself. A quick search online reveals some sites promote themselves heavily in the media while others don’t have so much visibility. 

The costs and conditions will vary between sites so don’t necessarily go with the cheapest. It’s worth comparing the costs with the inclusions as well as the fine print between several sites. 

Check that they include a property report for your area to help guide you in price negotiations. If a weekly report is important, look for a site that offers engagement data on your listing. And with social media a big part of people’s lives, you need to see if they have a presence on social media channels to capture more eyeballs.

If you want some more personal assistance with selling your property, look for a site that has telephone help from people with marketing and real estate experience. Check that the ‘For Sale’ board is professionally created and installed and that open house flags or signs are available to ensure good street visibility.

When it comes to managing offers you may have to negotiate directly with the buyer, or some sites offer negotiation services – make sure that service is offered in your fee if you want this.

Some sites offer auction services for an additional fee. 

How much will it cost?

We haven’t reviewed or tested these sites so we can’t vouch for their services, but here’s a snapshot of a few DIY real estate sites.

• forsalebyowner.com.au offers residential and commercial sales and leases with sales packages from $699.
• buymyplace.com.au has sales from $695 up to $1800 for the complete professional package.
• forsaleforlease.com.au has a monthly plan that’s $299 upfront plus $99 p/month, or $695, until sold.
• realestateyourway.com.au offers a free basic listing on its website or a standard package from $219.
• owner.com.au has a basic free listing service for a listing on their site, a premium package for $200 and custom packages.

Beware the upfront fees

Sites may require you to pre-pay for the listing. If this is the case, ensure that the listing stays active until your property has been sold. And before signing up, find out if the cost is refundable if you don’t sell after a certain time period, say six months, and decide to list elsewhere.

Can you two-time your agent?

The question of exclusivity is crucial if you’re weighing up between online DIY sales and an agent. Real estate websites may let you also list your property with an agent, but many agents require you to sign an exclusive contract preventing you from having two active listings.

Marketing on the big sites

Many sellers want to have their home listed on the popular real estate sites such as Domain and realesate.com.au for maximum exposure. Domain and realestate.com.au only allow listings from licensed real estate agents – and some of the DIY sites have this licence. Just check that this service is offered by the DIY site and included in your listing fee. Some sites will also list on foreign sites such as juwai.com, so look into that also if you’re interested in attracting overseas buyers.

Dot your ‘i’s and cross your ‘t’s

Conveyancing is an integral part of buying and selling property and even if using a real estate agent, you need to ensure the legal requirements for the sale are in place.

Conveyancing covers the legal requirements such as preparing a contract, changing the deed title, arranging the payment of stamp duty, arranging building inspection reports and attending settlement.

Typically you use a legal practitioner such as a solicitor or conveyancer, although it’s possible to do DIY conveyancing. If you do your own conveyancing, you take responsibility for the legal requirements of the sale and you need to fully understand the sale process and relevant legislation.

If you’re using a DIY site but you’re not going to do your own conveyancing, start by engaging a conveyancer so you have the contract of sale prepared when listing. Alternatively, check if legal services are available through the DIY site as some offer this too. More information on conveyancing can be found through Fair Trading and the Land and Property department in your state or territory.

The steps: How to sell your property

In its simplest form, these are the steps you need to take to sell your property and they’re the same regardless of whether you use an agent or DIY website:

• Contract for sale needs to be needs to be prepared.
• Valuation by licensed valuer to establish sale price.
• List property with an agent or real estate website.
• Prepare brochures and For Sale signs.
• Promote the property and organise open house viewings, inspections, offers etc.
• Accept an offer, exchange contracts and then settle.

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