Selling a property

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 agent have expertise on assessing the value of your property, finding a purchaser and assisting you and the purchaser to reach agreement.  The Real Estate Institute recommends rates of commission. Agents can charge whatever their clients agree.  Most agents charge the recommended scale, some a little more. Advertising may cost extra.   Choose an agent who is professional and knowledgeable.  You should get on well with your agent.  Choose an agent you can trust.   Get two or three of the local agents to inspect your property and give you an appraisal.

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 standard in Tasmania.  Auctions are useful for a special property or where there will be a lot of competition in the market.  Auctions should not be used 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.  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.

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 not registered for GST nor required to be registered you do not have to pay GST. Capital gains tax (CGT) is the tax that you pay on any capital gain you make and include on your annual income tax return. It is not a separate tax, merely a component of your income tax.   Generally, you disregard a capital gain or capital loss on:

  • an asset you acquired before 20 September 1985;
  • disposing of your main residence. This can change depending on how you came to own the residence, whether it is on more than 2 hectares of land and what you have done with it—for example, if you have rented it out, you may be liable to some tax when you sell it;

First you must agree on the terms of the agreement with the Purchaser such as:

  • the purchase price;
  • the amount of the deposit, (this is usually ten percent but it is open for negotiation);
  • a description of the land ( make sure that you show them a copy of the title and plan of the property);
  • a description of the household goods  to be included i.e. fixed floor coverings, light fittings, curtains and blinds, electrical items, TV antennae ( these are referred to as “chattels” in the contract);
  • the date you want to settle;
  • provision in the event that the purchaser needs to organise finance from a bank or to sell their house;
  • any other matters which may place an obligation on either you or the purchaser to do something before the contract is settled.

If you are using an agent the agent will manage negotiations and draw the contract.  If you

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.

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