Frequently Asked Questions For Buyers
If you choose to sell your property yourself rather than appoint an agent, you may save money as you won’t pay any agent’s commission.
Inspect comparable properties, obtain sales figures for comparable properties in your area and find statistics on recent property sales in your area.
You will need to undertake the searches required under the Land and Business (Sale and Conveyancing) Act 1994and complete the vendor statement yourself.
You will also need to arrange and pay directly for your own advertising and make yourself available to answer calls from potential buyers and show them the property.
It is a good idea to request all offers to be in writing, including counter offers.
Contracts for the sale of land must be in writing otherwise they have no legal validity.
It is recommended that you obtain legal advice about the contract of sale, Form 1 (vendor’s statement) and any other legal documentation. Your solicitor or conveyancer can assist with preparation of the contract and vendor statement as well as obtaining the required searches.
Selling by private treaty
You may choose to offer the property for sale at a price or within a price range. You can set a price and interested buyers can negotiate with you, via your agent (if you have one). As part of the negotiation process the buyer will make an offer in writing for you to consider.
The buyer’s offer may be subject to certain conditions (e.g. obtaining satisfactory finance, selling their existing home or a satisfactory building inspection). It may be in your interest to accept a slightly lower offer if the contract is not subject to any conditions.
A buyer is entitled to a cooling off period of two clear business days during which they can withdraw from the sale. The cooling off period starts after both you and the buyer have signed a contract and the buyer has received the Form 1.
Selling by auction
For auction sales, you must specify the selling price that is acceptable to you in the sales agency agreement. Before you sell at auction you will need to set a reserve price in writing, which authorises the auctioneer to sell the property to the highest bidder at that price, or greater.
The reserve price cannot be more than 110% of the price you stated in the sales agency agreement. For example, if your acceptable selling price is $400,000 then your reserve can be set at any amount up to $440,000, but not more. The agent must keep written records of the reserve.
You cannot increase your acceptable selling price in the sales agency agreement.
All bidders at the auction must be registered. Ultimately, the bidders determine the price they are prepared to pay for the property.
The agent must keep written records of all bids made throughout the auction.
It is an offence for any person to ‘dummy bid’. This includes procuring a dummy bid and an auctioneer knowingly taking a dummy bid.
While dummy bidding is prohibited, you are allowed up to three vendor bids at the auction. They must be announced by the auctioneer as a “vendor bid”, and they must be less than the reserve price. A vendor bid indicates that the bids haven’t yet reached your reserve.
If the property reaches the reserve price it will be sold to the highest bidder. Contract documents are normally signed and a deposit paid on the day of the auction. There is no cooling-off for anyone who buys a property at auction.
If bidding does not reach the reserve price, and you do not wish to lower the reserve price, there is no sale and the property is ‘passed in’. You may then choose to negotiate a sale with the highest bidder after the auction, or choose to place your home for sale on the open market.
If negotiations result in a sale contract on the same day as the auction, the contract is not subject to a cooling-off period.