Sell your house: how much is it worth?

By Gillian Bullock, ninemsn Money

Finding the right real estate agent can make up to a 5 per cent difference in the price you will get for your home. And given an agent generally charges between 2 per cent and 4 per cent in commission, every dollar counts.

Of course the more your house sells for the greater the commission, but a higher price will still deliver more.

Say your house sold for $300,000 through one agent and you paid 2 per cent commission. After the deal you would end up with $294,000 in your pocket. If the agent had managed to squeeze 5 per cent more out of the buyer ($315,000) then after 2 per cent commission of $7,300 you would have $307,700.

"I do believe that a good estate agent can deliver up to 5 per cent more than an average one because they have better negotiating skills and experience so won't give away your property too early," says Patrick Bright, a buyers' agent with EPS Property Search.

The question is how do you know whether you have a good real estate agent or not?

Bright reckons that one of the best ways is by referral. And one of the worst ways is probably plumping for the agent telling you your property is worth the highest price.

Independent valuation

Before you choose an agent, Bright suggests you get an independent valuation of your property. The Australian Valuers Institute can recommend a valuer.

"An independent valuer has no vested interest," says Bright.

Once you know the true valuation of your home then you can approach agents in your area.
When they give you a price, ask them how they have reached that figure. They should give you a comparative market analysis showing you the sales of several similar properties in your area.

You might be given a single figure or a range for the expected selling price. By law a range cannot have more than a 10 per cent spread so they might say it is in the range of $500,000 to $550,000 where the $50,000 difference is 10 per cent.

An independent valuation should mean you can recognise when an agent tries to win your listing by overquoting.

But undervaluing can also be an issue, according to Bright.

"If you have an agent with no local knowledge then they can undermarket your property as they are not familiar with the area," says Bright.

Fees

When you are choosing your agent, you will need to take into account the fees and charges and what they exactly entail. Agency fees are negotiable as are any associated advertising and marketing costs.

Some agencies charge a flat rate while others a percentage of the sale price. Either way the amount must be recorded in the authority-to-sell contract that you will sign before your home is put on the market. GST is payable on the fee.

Advertising and marketing costs are usually over and above the commission although in some cases you may be able to negotiate no sale, no fee.

Ways to sell your property

You should also consider how you plan to sell your property. Will it be by private treaty or by auction? This decision will depend partly on the location of your home and the popularity of auctions in your area but it’s also a matter of personal choice.

Those against auctions believe that you don’t get your full price for a property as you start from a low point and work your way up while with private treaty you set the price and then work down.
Selling a property is a major operation. If you do your homework first then you will know what to expect from your agent—unless of course you choose to sell it privately.

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