8 Tips To Prepare for a Property Sale

We all know that the property market is tough right now and many people are hurting. If you have your property up for sale at this time, you must give yourself the best chance of a successful sale and settlement. These 8 tips will help you prepare for the sale of your property:

1.    Know what funds your bank requires BEFORE you sell

Before you list your property, contact your bank to ensure you know exactly how much your bank is going to require to discharge the mortgage and complete the settlement. Remember, what you see on your loan account doesn’t necessarily mean that is the figure your bank will want to pay out the loan. This is because they may also add other fees, such as:

i)              payout fees

ii)             discharge fees

iii)           break fees for fixed term mortgages

iv)           other fees

Where you own other property, the bank may also require you to pay down funds from that loan(s). 

If you do have to negotiate with the buyers about your sale price, knowing what the bank requires and all related costs will give you a clear bottom line so that you can prepare the best strategy.

2.    Advise your bank of the sale

As soon as you go to contract, make sure you notify your bank and complete a “discharge authority form” advising of the sale of the property and purchase price. This will allow your bank the time it needs to complete its processes. This may include valuing other properties that you own to establish debt ratios etc.

3.    Know what the agent expects to be paid

Real Estate agents charge marketing fees, commission and GST, so ensure you are aware of exactly how much they require on settlement before setting a purchase price with the agent or accepting any offers.

4.    Review your property for defects

Do a review of your property, confirm that new building works have the required certification – bathroom renovations and re-tiles can require building and/or plumbing certification.

Obtain a building condition and/or status report so that you can identify any issues you can rectify before the buyer’s reports uncover any issues.  Tidy up and fix any maintenance items.  If there are items that you are unable or unwilling to fix, declare those issues to the buyer prior to the buyer making an offer, so that the offer can take those issues into consideration. Buyer’s reports uncovering issues you were unaware of can put you in a bad negotiating position, as they enable the buyers to negotiate a lower purchase price. 

So, do your research, check your own property for defects, certification issues and attend to any cleaning and maintenance items.  Otherwise, the buyers will pick them up and use them as leverage in negotiations with you.

5.    Have your property in good condition for all viewings

Make sure the property is clean and clear for all home opens, inspections, report inspections and settlement.  During report inspections and at settlement, the property must be to the same standard as it was when the buyer made the offer.

The reporting inspectors and valuers often take photos and provide those to the buyer.  Sometimes these images can make the house look rough, untidy and unclean, compared to when the buyer viewed it at the home opens. These bad photos can turn a buyer off.  Please be aware that the report clause in a contract states the buyer can rescind the contract if they are simply not satisfied with the reports.

6.    Know what your home is worth

Know the value of your own home!

Do the research, check the sales data (easy to do these days) for similar type homes in your area.  It is not uncommon for real estate agents to quote a property’s value based on neighbouring comparative sales, however there may be stark differences between the type and quality of your home to the comparative sales e.g. property size, presentation,  certification issues etc.  It is also not uncommon for real estate agents and valuers to underestimate your property’s value because they are unaware of your local area, so where possible use a local agent and valuer.

7.    Think carefully before you buy your NEXT home

As tempting as it may be to purchase another property before your existing property sells (simultaneous on-purchase), this can put you into a bad negotiating position. It is easier for the buyer to offer a lower price or to negotiate you down when you are locked into another contract, so try and maintain a position where you can walk away from a bad deal.

8.    Be optimistic and patient

Be optimistic with the process. Focusing on the likelihood of your sale failing usually results in just that!  Give the buyer their space and time to find finance and be satisfied with reports. All going well, by not stressing yourself or the buyer, the process will take its course and provide you with a great result.  

For the buying or selling of any property, please call Coralie Waters on (08) 8941 6355 or 0427 885080, or email conveyancer@bowden-mccormack.com.au