Selling privately can save you money on commission, but the real estate transaction is complicated, so you need to know what you’re doing and understand the risks.
Summary of important things to know
You should disclose any information you are aware of that may be relevant to the buyer, including issues. Otherwise you could find yourself in court. You do not need to advertise the information, but potential buyers who have indicated an interest in making an offer may need to be told.
Get a lawyer or conveyancer to draw up the sale and purchase agreement.
Once you have signed a sale and purchase agreement, you need your lawyer or conveyancer to hold the buyer’s deposit in their trust account.
Choosing to sell privately
If you sell your property privately, you will save on the commission you pay to a real estate agent, and you may have more control of the sale and negotiation process because you will be dealing directly with potential buyers. Also, you know your own property best, so you can tell potential buyers directly about its best features.
The real estate transaction can be complicated, so make sure you know what you’re doing and understand the risks.
Your legal obligations
When you’re selling a property, you are legally obliged to share all relevant information about it to buyers. What is relevant will vary from property to property and may include, for example:
- weather-tightness issues
- boundary issues
- unconsented alterations to the property
- the impact of proposed developments
If you knowingly fail to disclose any of these issues, you may be in breach of the terms of your agreement with the buyer. This means the sale could fall over or the buyer could seek compensation and take you to court.
Whatever the situation, honesty is the best policy. There is no need to advertise the information, but potential buyers who have indicated an interest in making an offer may need to be told.
Choosing a lawyer or conveyancer
Make sure that your lawyer or conveyancer is clear about the work they will do for you, and agree on the fee.
Your lawyer or conveyancer will need to verify your identity and will ask you for the required identification. If the property is being purchased by a company or trust, verification may take longer.
Find out more about providing identification here.
Read more about choosing a lawyer or conveyancer here.
Valuing your property and setting a sale price
You will need to work out what your property is worth and the price you’ll be willing to accept.
Read more about finding out how much your property is worth here.
Drafting and signing the sale and purchase agreement
The sale and purchase agreement sets out all the agreed terms and conditions of the sale.
Your lawyer or conveyancer should prepare the sale and purchase agreement if you are selling privately. They should also check it before you sign. You can also purchase printed and digital sale and purchase agreement forms online.
When you and the buyer are in agreement, you both sign the sale and purchase agreement, and it becomes legally binding.
Learn more about sale and purchase agreements here.
When you have signed a sale and purchase agreement, you’ll need your lawyer or conveyancer to hold the buyer’s deposit in their trust account until the sale becomes unconditional.
Read more about deposits here.