Frequently Asked Questions

When is the best time to put my house on the market?

Essentially, the best time to sell is when no-one else is selling. The property market, like any other market, is simply supply and demand – Prices trend up when demand is high and supply is low whereas prices also tend to soften when there is little demand and high volumes of property stock available.

If you are thinking about selling, try and time your campaign so that your house is for sale at a time when there’s not much else out there. This way, you have less competition for the attention of buyers and are more likely to obtain a premium price.

Do I need to renovate my house before putting it up for sale?

This will depend on the current age and condition of your home. If you live in an old house which has mostly original fixtures, you may need to look at upgrading some aspects of the property in order to get maximum value for it from the market. If the house is in generally good condition, and the fixtures are reasonably modern, they you might get away with just doing some cosmetic refurbishments and general maintenance to spruce the place up.

You will also need to consider what sort of budget you have to work with and what sort of value a major renovation would add to the property. For a more detailed analysis on this, click here to request your complimentary copy of Top 10 Property Selling Secrets – The essential home seller’s resource.

Is it best to sell a property vacant or occupied?

In most cases, homes look better furnished, although it is best to have them sparsely furnished as cluttered homes appear smaller and give the impression of being run down. Often, sellers will hire professional ‘home stagers’ and rent furniture for a vacant house to make it feel like a real “home”; Vacant properties often feel cold and sterile. This can be expensive though so if you are on a tight marketing budget, perhaps consider having some ‘virtual’ furniture added to your marketing images in post production to give your marketing a bit more oomphh.

If you are an investor, selling a property that has tenants occupying can often be a tricky business. Some tenants are lovely people and are more than happy to cooperate – However some tenants you will find to be extremely difficult. Access is a constant problem, and often they will not make any effort to clean or present the house for buyer viewings, which will impact your chances of a sale and the price you will most likely get.

If you have a difficult tenant, then it is best to evict them prior to marketing. This will give you an opportunity to fix the place up a bit and hopefully increase your potential sale price. It will also ensure your agent has access to the property whenever they need it.

If you do decide to sell the property vacant, you then have to deal with the conundrum of not deriving any rental income from the property. If there is a mortgage in place, and the interest payments are dependent on the rental income, this could present a serious cash flow problem for you as you are responsible for making up the payment from elsewhere.

More on this here.

Should I sell my property before buying or can I buy subject to sale?

Buying “Subject to Sale” is where you put a contract down on a new home with a clause added to the contract stating the purchase is conditional on the sale of your existing house. Whether or not this is a viable option will depend on the circumstances – And there are a few pitfalls that you need to be aware of.

Firstly – If you have not yet obtained a contract of sale for your current property, then it is likely the owner of the house you’re buying will want what’s referred to as a “sunset clause” in the contract. This basically entitles them to continue marketing the property and encourage other offers. If a better offer comes along, then they reserve the right to pull out of your contract and accept the other offer. This essentially means that until you sell your existing property, the house you’re trying to buy is still technically on the market. Be prepared to suffer the disappointment of having the house you’ve fallen in love with taken away from you by another buyer.

The other pitfall with trying to buy subject to sale, is getting the owner of the property you want to buy to even consider your offer in the first place. Subject to sale contracts have a large degree of uncertainty attached to them, and with no definitive time-frames on offer you may find sellers of properties you like won’t even be willing to negotiate with you until such time as you sold your existing house. Once again, going about things in this fashion may be setting you up for a major disappointment.

The other options you’ll have are to either sell your property prior to going out looking for a new one, or approach your bank to arrange what’s known as ‘bridging’ or ‘relocation’ finance. This is where your bank agrees to finance your new home purchase prior to you having sold your current property. You would then be given a certain amount of time to sell after you have moved into your new place, which takes a lot of the pressure off. The only catch is that it will cost you to do this – bank fees for relocation finance can be quite expensive, so be sure to do your research around this.

How much are real estate agent's fees?

Estate agents’ fees can vary quite dramatically across different areas and companies. In the past, there were industry standard fee structures in place (“Standard REIQ Commission”, as it used to be referred to was 5% of the 1st $18,000, 2.5% thereafter + GST) but since the dismantling of the Property Agents & Motor Dealer’s Act in 2014, and the subsequent implementation of the Property Occupations Act, agent fees are now completely deregulated – Meaning agents can charge as much or as little as they choose.

Depending on a number of factors, most agents charge anywhere between 2% – 3.5% of the sale price, although there are agents who will charge both lower and higher rates. It is important to remember that the advertising costs or “Marketing Investment” will often be a separate component of the agent fee structure. This is sometimes paid upfront, other times at settlement but normally this will be in addition the the commission.

How much should I be prepared to pay for advertising?

An oft-quoted rule of thumb is that you should be prepared to invest 1% of the value of the property into the marketing campaign. The costs of marketing will vary considerably depending on the location and price range of your property – For more expensive homes, it’s common for the owner to invest tens of thousands of dollars into marketing but for lower priced properties in outer suburbs, a couple of thousand might just be enough.

It is important to invest in marketing your property to ensure you are giving yourself the best chance of getting the best price. Well marketed properties tend to sell in less time and for higher prices and a simple $2000 investment could mean an extra $10 – $15k on your bottom line if it helps you find the right buyer.

Should I go with an agent who charges a 'flat fee'?

The big question you need to ask yourself here is that if the agent is receiving a fixed or flat fee, what motivation will they have to obtain a higher selling price for you? Traditional real estate fee structures provide for a percentage of the sale price, which then aligns the fee with performance. The more money the agent gets for you, the better the fee they get for themselves. Fixed fee agents basically have zero incentive to push the buyer for more money. Is this really what you want?

Besides – The best real estate agents naturally gravitate towards companies with more prosperous fee structures, where they are paid well for their efforts – Fixed fee companies are essentially the antithesis of this and so by engaging one it is unlikely you are getting a highly skilled agent working for you.

If I am paying commission, why should I also pay for advertising?

This is a good question, but one that is easily answered. It is important to note that advertising and commission are two completely separate fees – Despite what some might tell you, the agent normally does not make any money from the advertising fee as this money goes straight to the publishers and advertisers. They only make money by obtaining a result and getting paid their commission.

Most importantly, if there is no sale, or if you change your mind and take the property off the market, the agent makes no money from the transaction. In fact, they have lost money simply due to their investment of time and resources for no return. If the marketing costs have not been paid for, then they would then be left not only with no fee, but they would also have to pay the advertising bill out of their own pocket – No matter which way you look at it this is just bad business.

Think of it like this: If you had a plumber out to install some pipework in your back yard, his quote would certainly have two components: Materials and labour. Often, you would be required to pay a deposit of up to 10% to ensure the cost of the materials at the very least were covered. The plumber makes no money from the costs of the materials or parts, he makes money by completing the job and being paid for his investment of time and expertise.

Selling your house is very similar – You pay one fee for “Materials” and another for the completion of the job.

Can I sell my own property without engaging a real estate agents

Yes you can. There is no law requiring you to use an agent to sell your house. That said, there’s no law requiring you to use a solicitor, either, though it would be a brave soul who chose not to. Real estate agents specialise in property marketing and conducting negotiations between buyers and sellers and as such are a valuable resource for home sellers not only of information and expertise, but they can also provide you direct access to their database of prospective purchasers. With this being said, it’s no secret that there are some poor real estate agents out there as well so make sure you are dealing with someone who is reputable and can demonstrate the necessary skills and know-how to get you the highest price.

If you do want to go it alone there are numerous companies out there who cater to this and can help you get your property advertised with a minimal outlay, but from that point on you’ll normally be taking your own enquiries, handling your own inspections, conducting your own negotiations and executing your own paperwork. Make sure you’re comfortable doing all this before you decide to try selling privately.