selling a property - be informed

No matter your reason for choosing to sell you’re bound to have lots of questions, like; is now the right time to sell, how much is my property worth, do I sell privately or use a real estate agent?  Here’s a guide to help you answer some of these questions and looks at how you are protected and what independent information is available to you.

Making the decision to sell

Staying informed with what’s happening with property trends will often help with your decision on when to sell.  The advice you may often hear is to try and sell at the peak and buy at the bottom of the market.  An easy way to stay informed of the latest property trends is to sign up for our monthly newsletter that contains our latest property statistics or view them on qv.co.nz.

While the latest property trends are a great way to help you understand the state of the property market, determining when you should sell often depends on the reasons you are selling.  Sometimes the choice to sell is limited as it’s a result of job relocation, needing more room for a growing family, or financial reasons.  If you’ve reasons for selling are more flexibility, like the desire to upgrade or downsize, then you’ve got more opportunity to take advantage of what’s happening with property values.  However, if you are selling and buying at the same time in the same area then it doesn’t really matter what’s happening with property values as the same market conditions are likely to be affecting both properties. Therefore the answer to when is the best time to sell perhaps lies in the adage “there’s no time like the present”.

Choosing an agent

Once you’ve made the decision to sell you then have a couple of options when it comes to deciding how to sell your property, you could sell it privately or contract a real estate agent to sell it for you.

If you choose to sell it privately there are a range of people that can help you with this including HomeSell or you could list your property yourself on Trade Me.  This is often a great way to save on the often large agents’ commission, but it means that you need to organise all the marketing, open homes and manage the negotiations, which an agent would normally do for you.

If you want to use an agent then it is generally best to find an agent that knows your area as they will generally know the best way to market your property and will often have a range of potential buyers looking for properties in your area.  If you aren’t sure of which agents work in your area then you can use Trade Me’s find an agent.

If you choose to use an agent, you will need to have an agency agreement as this gives the agent the right to sell your property.  Your agent must provide you with a copy of the new Real Estate Agents Authority (REAA) Agents Agreement Guide before you sign an agency agreement, and ask you to confirm in writing that you’ve received it. Real estate agents are also now required to give you the following information before you sign an agency agreement.

  • A written market appraisal
  • How they recommend you sell your property. This could be sale by advertised price, by tender or by auction.
  • Information on what you will have to pay the agent (usually referred to as commission), when you will have to pay, and how this payment is calculated.
  • Information on whether you will have to pay any expenses (e.g. advertising costs) that are not included in the commission.

Determining the value

If you are using a real estate agent to sell your property they are now required to provide you a written market appraisal, which is the agent’s best estimate of the price they expect your property could be sold for. This appraisal should be based on sales and prices for similar properties in your area. It’s often a good idea to get several agents to provide appraisals for you to help you determine which agent to use.

You can also get a range of independent valuations including QV’s E-Valuer or a Full Current Market Valuation from a registered Valuer.  These are particularly important to help set your selling price if you are considering selling privately, but can also help you determine which agent to use, as the agent that gives you the highest market appraisal may not actually be best for the job if their suggested selling price is not realistic.

E-Valuer is an automated tool that provides you with a cost effective instant estimate of a property's current market value. An E-Valuer estimates the current market value of a property by identifying recent sales of other properties in the area that are considered ‘comparable’ based on a range of dynamic criteria. These comparable sales provide a good indication of what similar properties are selling for in the area. At only $39.95 E-Valuer provides an easy and cost effective way to estimate a property’s current value.

Full Current Market Valuations (also known as Market Valuations) are completed by Registered Valuers who are independent and professionally trained experts within the property field. Full Current Market valuations represent the most comprehensive analysis of the current value of a property. The valuer will conduct a full site inspection and utilise the most recent sales data available, as well as use their professional judgment to consider any factors that may have changed since those sales occurred and arrive at a final value.

Accepting an offer
The next step in selling your property is reviewing and accepting an offer.  If you are using a real estate agent they must now provide a copy of the new REAA Sale and Purchase Agreements Guide when presenting an offer from a buyer. The Sale and Purchase Agreement is the legal document that forms the contract between the buyer and the seller of the property.

With some real estate agents now using the new Real Estate Institute of New Zealand Sale and Purchase agreement it is more important than ever that you get your lawyer to check the contract before signing.  This new agreement has been written in plain English to make it easier for you to understand but it also contains some changes from the previous Sale and Purchase agreement which was put together by the Auckland District Law Society that has been used for many years and is well understood by lawyers and the courts.

Now that you’ve sold your property you’re probably also looking to buy a new one.  For tips on buying a property check out our article Buying a Property – Be Informed