We recommend most people instruct a real estate agent. It is possible to market your property yourself but most people benefit from the expertise of an agent.
Real estate agents have expertise on assessing the value of your property, finding a purchaser and assisting you and the purchaser to reach agreement.
Most properties in Tasmania are sold by negotiation and contract.
You and your agent should agree on a logical plan and a logical price for marketing your property. An auction might be a useful part of that strategy.
Auctions are not typical in Tasmania. Auctions are useful for a special property or where there will be a lot of competition in the market. Auctions are rarely ideal as a last resort.
The preparation and exchange of the contracts is the first stage of the sale.
The second stage is the lawyers work is to prepare and arrange for settlement. It is the lawyer’s job to make sure you are paid in full and manage fulfilment of the contract.
Your lawyer:
You will need to arrange and to close your own household accounts, including the electricity and telephone accounts.
It is not illegal to do your own conveyancing. However, recent reforms by the Land Titles Office require that you have a representative to certify your identity and right to transfer the property and act as a contact point on your behalf.
Most people advising on property transfers suggest you instruct a lawyer.
Your estate agent cannot do the conveyancing. Persons who are not licensed and regulated who do conveyancing for a fee are breaking the law.
Conveyancing is complex, requires precision and prompt action and can be difficult and time consuming.
Lawyer’s fees vary from lawyer to lawyer. Get a quote from your lawyer.
Fees for this sort of work are not prescribed. Lawyers compete in the market on price and quality.
Costs vary from firm to firm. At Tierney Law, the cost is not significantly cheaper where we act for both the Vendor and the Purchaser.
Substantially the same amount of work needs to be done where the same firm acts for the Vendor and the Purchaser. The responsibility is greater not less when the one firm acts for both parties.
At Tierney Law, where we act for both the Vendor and the Purchaser, we run two separate files with a separate person acting for each party. We believe this is necessary to maintain our quality standards and to be at maximum alert for possible conflicts of interest.
If you have a mortgage to clear, the bank will charge you a fee; usually between two and four hundred dollars. There will be tax to clear the mortgage of slightly more than $190.
Check the other costs with your lawyer. They are mainly government taxes. They will usually be less than three hundred dollars.
Any goods that a house is to be sold with are called Chattels. Chattels form part of The Particulars of Sale, and so need to be specified. Usually, a house is sold with the curtains and blinds, light fittings, floor coverings and electric stove. Usually, a fixed TV antenna and any water pumps are included. Chattel items beyond that rarely add significantly to the sale price, but they may be a useful sweetener to make a deal if presented as something extra after the first round of negotiations. The value attached to a Chattel may have significance for tax purposes.
If you do not wish to sell any of the usual items, consider removing them from the property before the purchasers arrive in case they become a sticking point on negotiations.
There is no stamp duty on selling.
Check your liability for Capital Gains Tax and GST before setting a price.
Talk to your accountant if necessary.
If GST is payable, as the Vendor you are the supplier and GST is your problem unless the contract passes the tax on to the Purchaser. If you are not registered for GST nor required to be registered you do not have to pay GST.
If you are subject to GST check the various exemptions:
In some cases if you are subject to GST, you may not be able to finalise the GST treatment till you know the GST status of the Purchase but at least get your position clear in your mind.
The parties become bound by signing a contract.
First you must agree on the terms of the agreement with the Purchaser such as:
If you are using an agent the agent will manage negotiations and draw the contract. If you have any queries, get Tierney Law to review the contract before you sign.
If there is no agent, you will need to manage negotiations.
If there is no agent, rather than both parties signing the one document, typically each parties signs their own separate copy of the contract and the copies are swapped.
You can either arrange signature and exchange direct with the purchaser or have Tierney Law send the contract to the purchaser’s lawyer for approval, signature and exchange via the lawyers.
If you have any queries on the contract, contact your lawyer.
Vendors in Tasmania should advise purchasers about title restrictions on use of the property. Otherwise, there is no compulsory system of comprehensive disclosure required of vendors on the sale of real estate as is the case in some other states.
The Certificate of Title has critical information about the property and the sooner the parties encounter that information the better. Best practice would have full copy of the Certificate of Title attached to the contract.
The standard sale contract allows confirmation or variation of the basic principle that the property is sold as is /where is.
The contract has specific statements to confirm when warranties are given.
Many prudent Purchasers are concerned that there might be outstanding council certificates. The Contract of Sale gives a vendor the option to promise there are no outstanding council certificates, but vendors should take care. Old houses are particularly subject to uncertainties such that a Vendor would be brave to give such assurances.
If the purchasers offer is subject to finance or the purchaser’s sale, clauses in the contract need to be completed to show the finance or sale details. If the purchasers offer is unconditional these clauses will be deleted. If the purchaser does not sell or get finance within time, the contract will lapse.
Usually the purchaser is then repaid any deposit.
If you wish to have such a contract subject to the purchaser selling their own house, consider providing that you have the right to shut the contract down early if you receive a better offer while waiting for the original purchaser to sell.
Parties may want a binding contract despite some matters outstanding before the parties can be finally committed to go ahead.
Purchasers may need to lock in a property subject to a final bank approval.
Many banks want to see the contract before they give a final answer.
Sometimes purchasers want the security of a contract before they spend the money to undertake some final searches, for instance a valuation, building inspection or property survey.
A vendor might need, for instance, to complete a subdivision of the Title or might be selling subject to some other transaction proceeding.
The technical term for these ‘get out’ clauses is “conditions precedent”. Such clauses specify things that must happen before the party are bound to complete the transaction.
The contract needs to be specific about what must be done and by when.
Typically if the condition is not satisfied within the deadline the transaction falls over with the parties free to renegotiate and write a new a Contract.
Parties may later need extra time for ‘get out’ clauses and agree to extend the contract timetable.
The deposit is a bond of the purchaser’s obligation. If the purchaser wrongfully breaks the deal and if the breach is bad enough, the vendor may be able to call off the contract and then purchaser automatically loses the deposit. Minor breaches do not justify that. Failure to pay a deposit on time for instance is a major breach. Delay in making the final payment is typically not a major breach.
If the contract fails because some agreed pre-condition to the contract does not happen, the purchaser will be able to get the deposit back.
The parties set the changeover date in the contract. This is recorded as the settlement/completion date.
Settlement is the exchange of the balance purchase monies for the title documents that finalises the transfer of ownership. Settlement is sometimes called completion. You do not need to attend the settlement.
Sometimes matters settle later than the contract date. By agreement of the parties can bring forward the date for settlement. Do not rely on the contract date without first contacting your lawyer. The contract remains binding on both parties even if settlement is delayed.
Most people find it convenient if settlements proceed on Friday, rather than any other day of the week. Where people are moving it is often convenient to have the weekend to settle into the new property. Liaise with the other party to pick a date that is convenient.
