The Selling Process
What usually happens is –
1. SELECTION OF REAL ESTATE AGENT
The process begins with your choice of Real Estate Agent.
– see our Website, Facebook and Video.
There should be full discussion as to the entire Selling Process:
The “Selling Price” (see below).
What will $ Commission be?
What will the $ Vendor Paid Advertising (“VPA”) be?
What will that actually be for? When will it be paid by whom?
Who will attend the Open Houses? (The “Senior Salesman or Junior Office Staff”?) What about Covid-19?.
2. AGREEMENT WITH YOUR AGENT AS TO THE “SELLING PRICE” – FOUNDATION OF THE MARKETING PROGRAM
Fundamental to the success of attendance at your forthcoming Open Houses is the price at which your property is advertised. Some “silly Agents” exaggerate a property’s worth in order to obtain your signature on the Agency Agreement.
This, particularly in difficult times, can be “fatal” to the attendance at Open Houses.
You, as a Vendor, are relegated to the category of “Unrealistic Vendor” by potential buyers.
The potential buyers simply wait for the price to drop. The launch “fails”.
Your Agent may seek a “price reduction” with an apology for “getting it wrong”.
The solution is to obtain (and in my case at my expense) a proper formal Valuation – a banking-style Valuation.
Your property doesn’t have to be marketed at that “bank-style Valuation” but is the basis of proper discussion.
You are allowed a price range of up to 10% under current Advertising Law.
The temptation to advertise a high price with a view to negotiating down can also be “fatal” for similar reasons – a very delicate discussion.
3. FOUR THINGS AFFECT WHAT MONEY YOU END UP WITH:-
- The percentage (%) commission you pay (“GFI”);
- The $ amount of advertising you contribute (“VPA”);
- The accuracy of your Internet Marketing Program;
- The quality of the salesman at your Open Houses;
Points 1 and 2 are negotiable with me.
4. AGENT SELECTION OF CONVEYANCER/SOLICITOR
A personal choice, of course, but what are your agent’s thoughts – and why? Prompt communication and expertise can be very important.
Your Conveyancer/Solicitor now prepares a “Marketing Contract for Sale of Land” required by law.
A property cannot be marketed without a “Marketing Contract” on file.
It must contain the “compulsory documents” including the Section 149 BMCC Zoning Certificate, now called a Section 10 Certificate.
5. THE “AGENCY AGREEMENT”
This is the legal contract, and care should be taken to understand it.
The Government brochure about Agents must be provided now.
The Agency Agreement sets out the Agent’s, the Agent who you are dealing with, details.
The Agency Agreement also includes details of the marketing program, such as price, method of sale, advertising, your $ contribution and when you pay it.
Open House & Covid-19 arrangements – and who will be there is very important: seniors or juniors.
6. DECISIONS AS TO YOUR “MARKETING PROGRAM”
On decisions as to the marketing program, again your Agent will have advice.
Does it include the very key elements?
Full and proper discussion should take place as to the placement, quality, photographs and floor plan, that will appear on major Internet Sites.
These elements should be properly set out in the Agency Agreement.
7. PLANNING FOR THE FIRST OPEN HOUSE
A “Critical Dates” sheet outlines the workload heading towards the first Open.
8. THE FIRST OPEN HOUSE, AND THEREAFTER
Preparation and presentation? The time of the day, AM or PM? Wet weather?
9. THE FIRST OFFER
The first offer is often the best offer – why? The Agent is in the strongest position to negotiate.
10. A $ PRICE “OBTAINED” AND “AGREED”
A verbal non-binding price may be “Offered” to Agent, and “Accepted” by you.
11. PRICE AGREED, VERBALLY
The Buyer’s $ Offer is almost always conditional upon at least –
- A Pest & Building Report.
- The Buyer’s Conveyancer/Solicitor reviews the Contract for Sale of Land.
- The buyer needs a bank letter confirming that “finance is available for this particular purchase” – not just a general approval. The Buyer’s Bank may wish to value the property and consider more details.
- Any other condition the Buyer may nominate e.g. a delayed “Settlement Date”.
12. The “SALES ADVICE” – A DOCUMENT SENT BY THE AGENT TO THE SOLICITOR/ CONVEYANCERS FOR BOTH VENDOR AND PURCHASER
Upon this verbal (unenforceable) conditional $ price offer being accepted by you, your Real Estate Agent prepares a “Sales Advice” – with all the names, $’s, and contact details.
13. THE “FINAL VERSION” OF THE CONTRACT
The Purchaser’s Solicitor/Conveyancer then receives that “Final Version” of the Contract for Sale of Land from the Vendor’s Solicitor/Conveyancer.
You, and the Buyer, then sign your copy of the Contract and may leave it signed with the Solicitor/Conveyancers pending instructions to “Unconditionally Exchange“.
14. VERIFICATION OF IDENTIFICATION (VOI)
Now Verification of Identification (VOI) is required.
That means you must have photo ID and other documents, because the whole transfer and Settlement process is now done by the “Lands Titles Office” (LPI) electronically – the PEXA system.
15. BEFORE EXCHANGE
A decision should be made with your Advisors and the Agent as to whether Exchange is by a “Cooling Off Period” –
Or by way of a Section 66W Certificate completely ready – an “Unconditional Exchange”.
The S 66W is preferred as the “Cooling Off” type only binds the Vendor.
You can’t sell the property to anyone else during the Cooling Off period which may be extended weeks!
Both Vendor and Purchaser have signed the “Contract for Sale of Land”.Those documents are now swapped – “Exchanged”!
The $ Deposit is paid to the Agent’s Trust Account.
Then a S 66W Certificate is presented –“UNCONDITIONAL EXCHANGE” then happens!
17. AFTER EXCHANGE
After Exchange and before Settlement, the Purchasers Conveyancer/Solicitor then checks things such as the validity of the Title and other formal matters to Title.
Assuming that is all clear the matter then proceeds to Settlement.
The Conveyancer/Solicitors for the Buyer/Seller agree to meet electronically.
Now, the former owner, the Seller, has their money $! Keys are handed over.
THE BUYER has become the new registered Owner.
The Agent accounts to the Seller for the $ Deposit. Job Done.