Selling a home is a very big decision and it’s important that you understand your rights and how to exercise them.
Type of sale
You can sell your property yourself or hire an agent to negotiate a sale by private treaty or by auction. Researching the market and talking to other people about their experiences can help you work out what will work best for you.
Selling a property yourself
If you choose to sell your property without an agent, you may save money as you don’t have to pay any agent’s commission. Inspect similar properties and get recent sales figures for similar properties in your area. You will need to do the searches required under the Land and Business (Sale and Conveyancing) Act 1994 and fill out the vendor statement. You will also need to arrange and pay for your own advertising, be available to answer phone calls from potential buyers and conduct your own open inspections to show them the property. It is a good idea to ask people to put an offer in writing, including counter offers. The contract must be in writing for it to be legally valid. You should get legal advice about the contract, Form 1 (vendor’s statement) and any other legal documentation. Your solicitor or conveyancer can assist with preparing the contract and vendor statement as well as obtaining the required searches.
Selling with an agent
The agent will charge a fee for service. This may be as commission (eg percentage of the sale price), a set fee or a combination of both.
The agent should always act in your best interest and operate with good business practices.
You can expect the agent to:
> give an estimated selling price for your property
> advise on the type of sale (private treaty or auction)
> advertise and market the property, and give you a marketing plan
> organise and attend open house and other inspections
> attract potential buyers
> pass on offers to you
> if selling by auction, organise and conduct the auction or arrange an auctioneer
> prepare and arrange signing of the contract.
Your agent must not receive a beneficial interest. This means they are not allowed to buy your house by private treaty, either personally or through an associate – eg an employee or family member. If they wish to buy the house they must apply to the Commissioner for Consumer Affairs.
The Commissioner will carefully consider the application, and exemptions are only granted in exceptional circumstances.
Choosing an agent
Get advice from at least three agents to help you decide on the right person to sell your home. Agents, including companies that are agents, must be registered with Consumer and Business Services (CBS). You can check whether the land agent or company is registered at cbs.sa.gov.au
Agents and sales reps must carry a registration card (this can be a physical or digital registration card).
Before the agent can act for you, you will need to enter into a written contract with them (this is called a sales agency agreement). See page 16 for more information.
Selling price
You will want to get the best price possible for your property. But if you set the price too high it may take a long time to find a buyer, or the property may not sell at all. There are also rules around setting and promoting the selling price.
When you liaise with agents to consider contracting their services, they will give you an estimated selling price for your property. They must give you recent sales statistics of similar properties and any other information to show how they worked out their estimate of the selling price.
When you sign a sales agency agreement with an agent, their genuine estimate of the selling price must be included in the agreement.
To help you decide on the lowest price you are prepared to accept, you should:
> use an agent’s estimated selling price as a guide
> research and get to know sale prices in your area
> consider seeking a valuation by an independent, qualified valuer.
It is important to be realistic and not allow emotion to cloud your judgment. This will help you avoid the risk of buying another property based on unrealistic expectations of the selling price of your property.
Once you have set your selling price:
> For auction sales, you can’t increase your acceptable selling price in the sales agency agreement.
> For private treaty sales, you can change the price, but this will affect any promotion of the sales price.
Sales agency agreements
There must be a signed written agreement (sales agency agreement) between you and the agent, authorising them to act for you. Before you sign, the agent must give you a guide which explains your rights and obligations under the agreement. The agent must give you a copy of the agreement once signed, or within 48 hours if you both agree.
The sales agreement must state:
> the method of sale (auction or private treaty)
> the duration of the agreement
> how the agreement may be terminated
> marketing strategy and associated fees
> agent’s commission rate
> services to be charged separately and their cost (eg advertising)
> the nature and amount of any commissions, rebates or discounts the agent will receive in relation to separate services
> the agent’s estimated selling price (expressed as a single figure – price ranges or words cannot be used).
> the price you would accept for the sale of the property.
Any fees and terms of the agreement may be negotiated. For example, there could be a commission penalty if the final selling price is less than the estimated sale price, or a bonus if the final price is higher.
Once signed by you and the agent the agreement is legally binding. There is no right to cancel it, unless both parties agree or either party breaches their duties under the agreement. Keep a copy and refer to it if you have any questions about your rights or obligations or if any problems arise.
Any changes to the agreement must be in writing and signed by you and the agent. However, you cannot increase the acceptable selling price for auction sales.
There are two main types of agency agreements:
> sole agency agreements
> general (or open listing) agreements.
Sole agency agreements
Sole agency agreements are the most common type of agreement. This will give the agent the exclusive right to sell your property and they will be entitled to the agreed commission. Even if you end up selling the house yourself, you will normally still have to pay the agent their agreed commission.
General or open listing agreements
For a general open agency agreement, the agent is only entitled to the commission if they sell the property. Depending on the terms of the agreement, you can open list your property with several agents and you can cancel the agreement at any time by giving them written notice. Most agents will not offer a general agency agreement, because they may be left with the marketing costs if another agent sells the home.
Marketing and advertising
Check what an agent will charge for marketing your property. Some agents charge a low commission rate but charge more for marketing and advertising. You may be charged the up-front cost of advertising with a particular publication, but agents usually get a rebate as they place large numbers of advertisements.
Ask the agent about the rebate amount they expect to receive. The agent cannot profit from these expenses. They may issue a refund or adjust the amount you pay at the end of the sale.
Any information you give the agent about your property must be factual and up-to-date. It is illegal to misrepresent a property for sale orally, in writing or with photographs. If a buyer can show that a property has been misrepresented, they could take legal action.
The price that you and the agent state in the sales agency agreement will affect how the property is marketed. Agents must not promote a price that is less than the agent’s estimated selling price or your acceptable selling price.
For auction sales, you cannot increase the acceptable selling price in the sales agency agreement.
For private treaty sales, you can change the acceptable selling price. This must be recorded, dated and signed by you and your agent in the sales agency agreement.
If you increase your price then you will need to increase the price you promote to potential buyers. If you lower your price you can lower the price you promote.
Withdrawal from sale
With sole agency agreements, if you withdraw your property from sale before your agreement with an agent has ended, there may be a clause in the contract that requires you to pay a cancellation fee. If you cancel a contract early and list the property with another agent there may be consequences. For example, you may have to pay commission to the first agent even though a second agent sold the property. If the agreement with an agent expires or is terminated, the agent may still be entitled to commission if the property is sold to a buyer who was introduced by them. Seek legal advice if you want to terminate an agreement.
Extending a sales agency agreement
A sales agency agreement can be extended for 90 days if:
> the agent gives you a Notice of Expiry within 14 days of the original agreement expiry date, and
> the extension is recorded in writing, signed and dated by you and the agent. If the agent gives you this notice you can:
> give the agent written notice that you do not wish to extend the agreement.
> agree to extend the agreement (for 90 days)
> do nothing in which case the agreement is extended automatically (up to 180 days in total).
The agreement can only be extended once. After that, a new agreement needs to be made. During the extension period, you can end the agreement by giving the agent at least 7 days’ notice in writing. No reason needs to be specified.
Making the sale
To get the best price for your property, make the time and effort to present it in the best way possible. Some agents offer a service to help with decorating, painting, gardening etc to have your home looking its best. But remember, this is a service that you will likely be charged for.
Open inspections
Advertising will include the times your property is open for inspection. This will usually be for 30 to 45 minutes once a week. Buyers may wish to arrange an alternative inspection appointment.
Your agent may ask whether you wish to make it a condition of entry that potential buyers give the agent their contact details. This may help protect against theft, but can also deter people from inspecting your house as they do not wish further contact from the agent.
Lock all your valuables away and hide from view anything you don’t want the public to see.
While you will want to present your property in the best possible light, you must not cover up, misrepresent or in any way mislead a buyer about the true nature of your property.
Form 1
The buyer must be given a Form 1 statement (vendor’s statement) setting out the cooling-off rights and important information about the property eg title details, mortgages on the property and zoning. Your agent will need to certify that the statement is complete and accurate.
If you are selling the house yourself but the buyer has an agent acting for them, their agent must certify that the Form 1 you provide is complete and accurate.
If neither of you have an agent, it is your responsibility to make the inquiries as required by law. You will be responsible to ensure that the statement is complete and accurate.
The Form 1 must:
> for a private treaty sale − be given to the buyer at least 10 clear days before settlement
> for an auction sale − available at the auctioneer or agent’s place of business for three business days immediately prior to the auction and at the place of auction for 30 minutes immediately prior to the auction.
Your agent must take reasonable steps to advise prospective purchasers where and when the Form 1 can be inspected. See page 18 for more information.
The Form 1 must be accurate when it is given to the buyer. If there are any changes, a notice of amendment must be given to the buyer. This alters the buyer’s cooling-off rights and gives them a further two clear business days from service of the amended notice.
Receiving offers
All offers from interested buyers must be in writing, on a particular form, and signed by the person making the offer.
You can choose to:
> accept the offer − the agent will then prepare the contract of sale
> reject the offer
> ask your agent to negotiate with the person to increase their offer.
An offer is not binding until a sale contract has been signed by all parties.
Auctions
Your agent will usually arrange the auctioneer for you. Auctioneers must be registered and carry their registration card issued by Consumer and Business Services. This can be a physical or digital registration card.
Before the 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 higher. The reserve must not be more than 110% of your acceptable selling price stated in the sales agency agreement. The agent must keep written records of the reserve.
By law, you cannot increase your acceptable selling price. If you wish to increase the acceptable price you must wait until the sales agency agreement has expired, or make a new
agreement with a different agent.
The agent must keep a record of all bids made throughout the auction. It is an offence for you to ‘dummy bid’ or arrange someone to dummy bid, or for the auctioneer to knowingly take a dummy bid. However, you can have up to three ‘vendor bids’. They must be announced by the auctioneer as vendor bids and must be less than the reserve price.
If the highest bid does not reach the reserve, you could lower the reserve to the amount of the highest bid to sell the property. If you choose not to lower the reserve, the agent can try to negotiate with any of the bidders after the auction. If a sale is achieved in this way on the day of the auction, the purchaser will not have the right to cool off.
If the property still does not sell and is passed in, it can be placed on the market for sale by private treaty.
You may wish to attend a few auctions yourself so you get an understanding of how the process works.
The sales contract
For a private treaty sale, the buyer may make the contract subject to certain conditions. For example, the sale may be subject to a satisfactory building inspection, selling their existing house, or obtaining finance. You may prefer to accept a slightly lower offer if the contract is not subject to any conditions.
Talk to your agent about any appliances, furniture and personal effects you do not want included in the sale. Generally, items such as hard-wired kitchen appliances and curtains and blinds are included.
Set a settlement date in the sale contract (before the auction if the property is sold at auction). The settlement date is the date when the sale is finalised and the buyer can move into the property. The buyer, or bidders at auction, may want to negotiate the settlement date with you.
After the contract is signed
Cooling-off
A buyer is entitled to a cooling-off period of two clear business days during which they can withdraw from the sale without penalty. However, there is no cooling-off period if they are buying at auction.
The cooling-off period starts after the contract is signed, or the Form 1 is given, whichever comes last. It is against the law for an agent to be paid commission if a buyer cools off.
There is no cooling-off period for sellers so you will be bound by the contract for sale once you and the buyer sign it.
Settlement
Contact a conveyancer or solicitor to arrange settlement. A conveyancer will provide advice about your rights and responsibilities under the contract and Form 1, calculate the adjustment of rates and taxes, and prepare all the documents necessary to complete the transaction and settlement. Your conveyancer will also liaise with the buyer’s conveyancer and contact you and your financing institution (if relevant) regarding the final payment.
Proof of identity
You will need to have a face-to-face interview where you must produce documents (such as a passport and a driver’s licence) to prove your identity. This can be done through your solicitor or conveyancer, or alternatively contact the Land Services Group sa.gov.au/land services for further information.
Disputes and complaints
If you have a complaint, first try to resolve it with the agent. If that is unsuccessful, contact Consumer and Business Services on 131 882 for advice.