There’s a lot of advantages to selling your home by private sale in Australia, but there can also be many pitfalls. Here are five mistakes to avoid at all costs if you’re considering listing your property for sale by private treaty.
So, you’ve made the decision to sell your property? Now you need to decide how! There are many methods of selling a property in Australia, but the two most common ways are through an auction or selling by private treaty or private sale. It’s worth speaking to your real estate agent to discuss which method they recommend would yield the best results for your property. Take into consideration the type of property that is being sold as well as the area that it is located in and your expectations for the sale campaign. Explore your options carefully with expert advice before you make your decision.
What is a private sale?
A private sale, or sale by private treaty, means that the property will be offered for sale without going to auction. Prospective buyers are able to make offers to buy the property through the real estate agent and an agreed figure can be negotiated between buyer and seller.
During the private sale process, you will need the assistance of a real estate agent to assist you with the sales campaign and negotiating with potential buyers to achieve a sales figure that you’re happy with. You will also need to hire a reliable property conveyancer to assist you with drawing up a Contract of Sale that is tailored to your expectations with any necessary conditions built into the document. Jim’s Property Conveyancing has offices in Melbourne and Brisbane and offers a free quotation service, phone our central office on 13 15 46 to discuss your plans for your property sales campaign.
If you’re pursuing a private sale for your property, you will set an acceptable sale price range with the real estate agent that is managing your sale campaign. This figure will be likely based on a comparison of recent sales of similar properties in your area and should be guided by the expert advice of your real estate agent. Typically, the property will be advertised for sale and the real estate agent will begin showing interested parties through the property for inspections, but there is often no fixed date by which the property would be sold.
For residential properties and smaller rural properties that are being sold by private treaty, a cooling-off period will usually apply following the Contract of Sale being signed. The length of the cooling-off period can vary depending on which Australian state the property is located in, in Victoria the cooling-off period is usually three business days, and in Queensland it’s usually five business days.
What are the benefits of a private sales campaign?
Sale by private treaty can allow vendors to have greater control over the sales figure that the property is sold for and also allows the vendors to avoid the stress and intense manic energy of an auction. Often a private sale campaign can take a little longer than selling your property at auction, but you can manage the timeframe to suit your needs. Here are some of the other benefits of choosing to sell your property through a private sale:
Lower fees. Selling a property by private sale can also be a cheaper way to sell as it will enable the vendors to avoid auctioneer fees and, if you choose to conduct a short sale campaign, it’s possible to pay less for marketing expenses.
More flexibility. If you’re not in a rush to sell, a private sale campaign can e a better choice than opting for an auction. A private sale allows the vendor to take their time considering offers and to wait for the best price.
Greater privacy. Private sales can also allow greater privacy than an auction, which is often attended by curious neighbours. One of the benefits of a private sale is that it enables the vendors to withhold the sale figure from curious strangers.
However, there are risks and pitfalls involved in private sale campaigns. If you choose to sell your property by private sale, here are five common mistakes to avoid:
Mistake #1 Rushing through the sales campaign
It is true that selling your home by private treaty can allow you to conduct a faster sales campaign, but it’s a huge mistake to rush the process. Sometimes it can take a while to find the right buyer who is prepared to pay the asking price that you want. If you rush the sales process you may end up having to settle on a figure that is lower than you had hoped. Once you have found an interested buyer you can begin the negotiation process, following the advice of your real estate agent.
Mistake #2 Setting the right price
If you have made the decision to list your property for sale, it is important to make sure that you have done some research and have a good understanding of the property market in your area. It’s crucial to hire a local real estate agent that has a great sales track record and with whom you can establish strong communication. Your real estate agent should be able to advise you what potential buyers in the area are looking for as well as giving you a realistic idea of a purchase price that you could aim to achieve for your property.
Try to be realistic when it comes to setting a price for your property. If you set a price that’s too high you will miss out on potential buyers, and if you have to lower the asking price it might make interested buyers suspicious. Setting a realistic price for your property is arguably more important if you are selling through private treaty than auction, as it can affect the length of time that your property will end up having to spend on the property market.
Mistake #3 Making decisions too slowly
One of the advantages of selling a property by private treaty is that you can take your time to properly consider offers. In an auction format the vendor has to make quick decisions in an intense high-pressure atmosphere. However, it’s important to still ensure that you’re responding to offers promptly and moving the negotiation process along, rather than letting it stagnate. If you knock back an offer, try to keep forward momentum by explaining why their offer is too low and encouraging a follow-up offer from the prospective buyer. The longer the negotiation process, the more likely it becomes that the deal will fall through if the buyer is able to find a better option during the negotiation process.
Mistake #4 Not getting the right professional assistance
If you’re embarking on the process of selling a property, it’s extremely important to ensure that you have engaged the right professional experts to assist you with your real estate transaction. Choose a real estate agent that can demonstrate solid experience selling similar properties in your area and with whom you can establish a good line of communication. Likewise, hire an experienced property conveyancer, such as Jim’s Property Conveyancing in Brisbane and conveyancing Melbourne who can ensure that you meet any legal obligations and that you’re able to avoid costly delays. Unfortunately, it can be easy for sales to fall through because vendors aren’t prepared with the correct documentation, a reliable conveyancer will be able to ensure that you’re ready to sell from a legal standpoint.
Mistake #5 Not maximising the exposure of your property
Finally, while private sales allow vendors to sell their property more discretely, it’s important not to hide the fact that your property is for sale. The more potential buyers that know about your property the better! Don’t be afraid to ask questions and follow the advice of your real estate agent. It may be worth considering listing upgrades or print advertising or listing your property on international real estate websites. Make sure you don’t miss out on a potential buyer because you’re worried about being discrete.