So you are thinking about or have decided to sell your property.
Properties are sold for a variety of reasons, upsizing or downsizing, financial reasons, taking advantage of an opportunity and in some cases, the unfortunate break-down in a marital or other relationship.
Regardless of the reason, there is a process involved and a number of considerations that need to be made to ensure that process is a smooth one. You need to be aware of your many obligations, understand the implications of your decisions and obtain the right advice at the right time, to protect your interests and your investment.
For these reasons, we have prepared a three part series outlining some of the more relevant and important considerations you need to make when you have decided to sell your property.
So let’s start…
Have You Engaged An Agent?
You will need to engage a real estate agent who will assist you in many ways. They have the skills, knowledge and experience to give you the right advice, market the property effectively and source the best price for that property.
We work with a handful of select real estate agents who we know and trust, so if you are unsure about which agent to select, or who is reliable, please contact us and we would be happy to make an introduction.
You should consider things like:
- How many properties has the agent sold in the area?
- Do you feel comfortable with the agent (you will be spending a few months with them so this is more important than it may sound)?
- Have you discussed the agent’s commission?
- Has the agency agreement been explained to you thoroughly?
- Are you granting the agent an exclusive or sole agency period?
- How will the property be marketed? Who will be paying the marketing fees?
- Have you asked the agent for tips on how to best present the property for inspections?
Considerations such as these are important to get you started and to give you some reassurance as to steps ahead.
Do You Need to Make Any Essential Repairs to the Property?
You may not wish to spend any more money on the property now that you have decided to sell it.
However, some essential repairs may need to be made to the property particularly where the condition of the property is unsafe or will significantly impact on the selling price. Discuss this with your agent.
Sometimes and depending on the circumstances, it is worthwhile spending a little money in order to secure a far greater sale price and make the prospect to buyers all that more attractive.
What Taxes Will You Pay?
It is very important when choosing to sell a property that you properly consider whether there will be any tax implications as a result.
We are not qualified to give accounting or tax advice as such, so it is best that you determine this by speaking with your accountant.
You may ask the following questions, among others to gain greater clarity on this issue, as it may influence decision you have to make in connection with the sale:
- Is the sale of the property a taxable supply?
- If GST will apply to the sale, will you be applying the margin scheme?
- Are you liable to Capital Gains Tax as a result of the sale of the property?
- Are you liable to any other taxes as a result of the sale of the property?
Have You Chosen A Solicitor?
Often times the primary choice in choosing a solicitor (or conveyancer) is price.
To some extent this consideration is important. However, it is also very important that you choose a solicitor/conveyancer based on the quality of service and advice that is offered.
You want to make sure that no corners are being cut by solicitors/conveyancers to make up for their competitive prices. While you might save one or two hundred dollars on your conveyancing fees by choosing the cheaper option, these types of shortcuts can often end up causing mistakes that cost you thousands. After all, the value of your investment (and likely purchase of another property once the sale is complete) is generally many hundreds of thousands of dollars and such an investment should be protected. Choose wisely!
Refer to our previous article regarding the differences between a solicitor and conveyancer.
Once your solicitor has been engaged, instruct them to prepare a contract for the sale of the property.
It is important to note that the agent you have selected cannot commence marketing the property (or listing it for sale) until a contract for the sale of the property is available.
You will need to have considered the following in order to provide your solicitor with the instructions that they will need to prepare the contract and of course, your solicitor should always talk you through and explain all aspects and steps of the process in any event to ensure you are clear and are able to make informed decisions:
- Who is your agent?;
- How long after the contract is exchanged do you wish to settle?
- If there is a swimming pool at the property?;
- If the property is tenanted?;
- If the property was built in the last 7 years?;
- If any building works including alterations and renovations been carried out at the property in the last 7 years and the value of those works?;
- If so, when and by whom were they carried out?;
- If the property is your principal place of residence?;
- What are the inclusions that form part of the sale?;
- What the exclusions are that do not form part of the sale?;
- Whether the sale is a taxable supply. If so, whether the margin scheme will be applied?;
- If there is a recent survey report available in relation to the property?;
- If there is a recent building report available in relation to the property?; and
- Whether anyone has a right of way or any other interest in the property
Always notify your solicitor if you are planning to be away during the settlement period at any stage.
The significance and implications of many of the above comments, along with an explanation of some of the relevant terminology involved with this process, is explained in our next article, when we continue our complete vendor conveyancing guide series.