Here’s an insider’s view of the key considerations when listing a property on the market, from the newest member of our Finance team, Ian Smith:
Having previously been a real estate agent in Melbourne’s eastern suburbs, and most recently run my own finance broking business for the past 2 years, I’ve learned a lot of things that can make a huge difference when listing your property for sale. I hope this helps you next time you’re selling a property.
1. When listing with an agent they must fill out and have you sign an authority form known as anexclusive authority. This gives the agent the sole right to sell your home for a period of time and an agreed fee. You can multi-list your property which means you sell with many agents and this is done by a general authority with each individual agency you list with.
2. Authority period: my recommendation is to sign the agent on for 60 days. 90 days is acceptable but personally I feel that if after 60 days the agent hasn’t sold the property and you feel they have been doing a good job you can always extend the term. If they haven’t then you have the freedom to employ someone else.
3. Warning: With the authority period you will also see a continuing authority period, which means the agent still has the right to sell your property beyond the authority period. Say you agree to a 90 day exclusive authority period; an agent might enter 90 days in the continuing authority period of your agreement without discussing with you. So if after 90 days the original agent hasn’t sold your property, and you employ a new agent who sells it within 90 days, the original agent by law is entitled to a commission on the sale. This means you could end up paying 2 lots of commission – you’ll pay the new agent for selling the property plus the original agent can legally demand a commission as well. It does happen.
4. Don’t fall into the multi-listing trap. Some people think the more agents that have the listing the more likely it is to sell. Agents may spend less time on multi-listings as they have no idea what the other agents are doing. Buyers will also go to the other agents to see who is quoting the lowest price and the buyer will then make their offer via that agent. A great way to lower your selling price.
5. Make sure the agent quotes you a 10% price range and this is shown accordingly on the exclusive authority.
6. When agents are quoting fees, always ask if it includes GST or is it plus GST? This simple question may save you 10% of your agent fee.
7. In my experience there are only 3 main forms of advertising required to sell a property: internet, local paper and a board sign on the property.
8. Internet: Agents pay a yearly subscription to be on internet websites. They will then charge each new client a fee for putting them on the websites (some will even charge you per website). You may therefore have room to negotiate internet advertising costs – if you don’t ask, you won’t get.
9. Board sign: Make sure the board sign has a picture of a feature of the house. No point having a picture of the front of the house when the person standing out the front of the house is looking at it. Also make sure the sign is more about selling your house and not a free advert for the agent trying to increase their profile.
10. Local paper: Beware the glossy magazines and advertising in the Age or somewhere – it may not be applicable to your house. If you live in an area with a large community of a particular ethnicity and they have a specific paper then it would make sense to advertise there as well. I’ve found that just advertsing in the local paper is fine. The first thing buyers do when they are searching for properties is to jump on the internet. The next step is they then drive to the area they want to buy in, visit a few local agents, and usually pick up the local paper. The money you spend trying to get to buyers is often wasted as the buyers you are seeking are actually coming to you. While it’s great to be in the glossy magazine, they can be very expensive and only get handed out to people who have actually visited one of that agent’s properties for sale or via their office.
11. Price: Try to be realistic. The main reason houses don’t sell is our tendency to value something we possess higher than anyone else. It’s a natural human response. If you’re not getting any offers or inspections it’s either time to get a new agent, or you’re being unrealistic on price. Be prepared to lower your asking price.
In addition to his real estate agent and finance broking experience, Ian has completed both his Diploma of Mortgage Broking and Diploma of Financial Planning. He also holds an agents representative certificate for real estate, and is a full member of the Finance Association of Australia (MFAA).
The Practice Financial Solutions holds an Australian Credit Licence (ACL # 388041) and is governed by ASIC. We are accredited with over 30 lenders which means we’re unbiased – so we find the loan that’s right for you. Contact us on (03) 8888 4000 email@example.com.