Closing Basics

Seller's Handbook, closing basics

 

Sellers Guide : Closing basics of no agent private sale

All the following legal procedures of a real estate sale, including needing to employ the help of a solicitor or conveyancer, are exactly the same with a no-agent private sale as they would be with an agent sale. Don’t believe the real estate industry misinformation that an agent helps you to handle the complex paperwork of a sale; they most often don’t and its not even their expertise.

We at Owner.com.au recommend employing a solicitor or conveyancing officer to assist you with the legals of selling any home. Conveyancing law is complex and often changing; mistakes in this area can cost you the sale. Whilst you should leave all the technical knowledge to your legal representative, for some background information on what they will be doing on your behalf read our article on demystifying the conveyancing process.

You should think of a well drafted contract of sale as protection for you the seller, making it harder for any buyer to pull out of a legitimate agreement without good cause. For this reason we do not recommend you DIY your own legals unless you have time, energy and some legal experience. If you do decide to save some money on legals then make sure you purchase an up-to-date and comprehensive conveyancing kit, appropriate to your state or territory.

Choose a good solicitor or conveyancer and you will have on side supportive help for negotiating the twists and turns of any real estate sale. Your legal eagle will help you collate all relevant documents needed, everything from drainage diagrams to land titles. In choosing a solicitor, (or conveyancing officer who are just as good and often cheaper), you’ll find many options through a Google or a Yellow Pages search. Make sure you get a few quotes and talk directly to the person you will be working with, to find out how compatible and supportive they will be. Conveyancing prices typically are around $700 to $1000 but be wary of low quotes for hidden extras. If a ‘fixed price’ service is advertised, ask frankly about any possible hidden costs. Some charge extra for such necessary items as title searches or phone calls.

Having engaged your solicitor or conveyancer, the contract they will then draw up will consider a long list of factors that might conceivably relate to your property for sale. These include such esoterica as zoning restrictions, where the certificate of title is held (usually with your lender – who indeed really owns your home?!), are there any third party caveats on the property (a past divorce maybe), any recurring bills such as council rates, what are the connecting services such as gas or water, etc.

It may be best not to reply directly to a questioning of price during the home inspection. If a potential buyer asks if you are negotiable on the price, politely inform them that you will “consider all reasonable offers in writing.” Also be aware that oral promises on the sale of real-estate are not legally enforceable. Besides, it is best to think and talk over such big decisions first. All subsequent counter-offers during the negotiation process are also best put in writing. Having a written negotiation also allows you to be more in control if you are not a confident face to face negotiator. For more detailed information on what are the keys to being a successful negotiator in the home selling process read our article on the subject.

At a general level any buyer offer should contain these points; the address and sometimes a legal description of the property, the price, date for closing of the sale, and the terms. For example subject to obtaining a satisfactory structural report, pest report (such as termite infestation), or obtaining a mortgage for a given amount. Also, sometimes other legal requirements are incsigned contract of saleluded which are specific to each state or territory.
Until you have signed a legally binding contract you are free to accept another buyer's higher offer
Keep your temper about ridiculously low offers. They are often made out of inexperience or nervousness. Qualified keen buyers often come round to a reasonable price in the end. Also, make sure, if you are lucky enough to have multiple offers, that you keep everyone involved well informed of what is going on. Don’t hesitate to ask your legal eagle to help you through the details of the offer process.

This offer negotiation process is a stumbling block for some in choosing to sell privately, who fear conflict and believe that an agent will be of help. Indeed any negotiations over the price given for such a large asset as your own home are bound to be stressful. But in reality agents don’t make the process much easier, just much more expensive than if there were no commission involved. What sellers often find when they employ a third party, is that the agent is on the buyer’s side pressuring them to accept a low offer. This is due in part to the temptation of so large a commission, but also is part of the ‘conditioning’ process to get sellers to accept a market reasonable price. Having to negotiate offers through an agent third party invariably slows things down somewhat and can drag out the process. .

Exchange of Contracts

When you accept a buyer’s offer both you and they will sign a contract and exchange copies of this contract. This now is a legally binding agreement.

Your legal representative will arrange matters for the buyer’s deposit, typically 10% of the sale price. Your buyer will also likely have made a conditional offer, usually subject to finance and a pest and structural report. These things can be negotiable; you may want to accept a lower deposit in a struggling market or demand an unconditional contract in a hot market. In most Australian states and all territories the buyer has the right to a cooling-off period (the exceptions are Tasmania and Western Australia). Here they can withdraw from the contract, getting most of their deposit refunded. Buyers usually use this period to finalize their loan and get any building inspections done. Patience is an important seller virtue, since contracts sometimes fail at the last post.

During this period both your legal representative and the buyers legal representative will be engaging in a close exchange to ensure that everything is going smoothly with regards to the contract. Also your solicitor or conveyancer will contact your lender in order for your mortgage to be discharged. This checks the property is clear of any financial claims. your solicitor can arrange a market price rental if you buyer wants to move in early

Just before the much anticipated day, the buyer will do a final walk through inspection, mainly to check things such as that you haven’t run off with the built-in jacuzzi.

As a final friendly gesture before the new home owners move in, give the house a good clean, leaving a nice bottle of wine and a welcoming thank you note.

Congratulations, you’ve just sold your own home all by yourself (with a little help from your friends at Owner.com.au).

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