Selling a house is a decision usually accompanied with great expectations and often stress! What is the optimal sale price, should you sell through private treaty or by auction, offers and counter offers, home opens, the whole process can be fraught and a guiding hand to help you navigate through the whole process can make a big difference as to whether the sale transaction is hassle free or filled with stresses and strains.

This article is aimed at explaining the entire process of selling a house including the differences between selling a house by a private treaty or by auction.

The Process

Following are the various steps involved in selling a house:

(a) Decide to sell: at first you need to consider whether it is the right time for you to sell the house. You also need to decide whether it is beneficial for you to sell the house first and then buy another house or vice versa.

(b) Choose an agent or do it by yourself: You can, either conduct the sale on your own or through an agent. If you plan to sell your house through an agent, you will be required to sign an agreement with your agent. The agreement will authorise the agent to do certain things in relation to the sale of your house including advertising, inspections and receiving deposits from buyers on your behalf. This agreement will detail any commissions, the estimated sale price, duration of the agreement, advertising costs, process and much more. You can also choose to sell without engaging an agent but generally then you will conduct all the processes involved in the transaction.

(c) The Contract of Sale (“the Contract”): prepare the Vendor’s Statement for your house and the Contract through your solicitor or conveyancer. You must have the Contract ready before putting your house on the market for sale. The Contract should have all the details of the house including the following documents:

(i)     a zoning certificate;
(ii)    a drainage diagram;
(iii)   a copy of the Certificate of Title confirming that you own the house; and
(iv)   copies of any documents creating easements, rights of way, restrictions or covenants.

Confirm with your solicitor whether you should include the following documents in the Contract:

(i)     an identification survey;
(ii)    a building certificate; and
(iii)    a home owners warranty insurance certificate.

(d) Negotiation, Sale and Settlement: Your agent may arrange home opens or inspections by appointments as a part of enquiries from potential buyers. Your agent will either sell the house by auction or by a private treaty, mediating between you and the buyer to reach a mutually acceptable price. The buyer will be required to pay a deposit.

Your solicitor, the buyer and the lender, all are required to work out the details of the sale transaction in order to ensure that both the parties meet all the legal and financial requirements.

On the settlement date you are required to hand over the keys and legal rights of the house to the buyer after the balance payment on the transaction is made.

Sale By Private Treaty Or By Auction

You can sell your house by a private treaty or by auction.

Sale by a private treaty

If you choose to sell by a private treaty, you are required to list the house and mention the sale price of the house accordingly.

The benefits of selling a house by a private treaty are:

(a)     greater control over the sale;
(b)     time to consider the offers made by potential buyers;
(c)     the ability to extend the time period over which your house is for sale; and
(d)     the fact that potential buyers must make offers for your house.

The risks involved in selling a house by a private treaty are as follows:

(a) if the selling price of the house is too high, then you may not attract buyers; and
(b) if the selling price of the house is too low, then you may miss out the opportunity of maximising your profits from the transaction.

Generally, if you are selling a house through a private treaty, a fixed number of business days are granted to the buyer as a cooling off period during which he/she can change their mind to withdraw from the sale.

Sale by auction

The benefits of selling a house by auction are:

(a)     you are not required to disclose the selling price upfront;
(b)     you have a set timetable, with an auction-day deadline to plan by;
(c)     you can dictate the terms of sale;
(d)     bidders are required to provide a deposit and enter into a Contract upon the fall of the hammer and          there is no cooling off period;
(e)     auctions create a competition, and can thereby achieve the highest possible price;
(f)     auctions are suitable for different or special houses, especially with those of high worth; and
(g)     you can sell beforehand, on the day or afterwards – the choice is up to you, guided by the expert advice of the agent.

We have a highly experienced team of professionals, who can advise you on the formalities involved in selling a house. Feel free to contact our team at Owen Hodge Mortgage Solutions for any assistance.

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