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Method of sale
There are two ways to sell property:
In a private sale:
- you negotiate with a buyer to agree on a sale price, with an agent’s assistance (if you have engaged one)
- the contract of sale can be conditional. With your approval, the buyer can make the sale subject to obtaining a loan, a satisfactory building inspection report, or other conditions
- for residential and small rural properties, the buyer has a three business day cooling-off period (with exceptions). For more information about this cooling off period, see ‘Cooling off on a property sale’ on our Buying property by private sale page.
At a public auction:
- price is determined by competitive bidding between prospective buyers present
- the contract is unconditional. The buyer cannot make it subject to conditions such as finance or inspection
- there is no cooling-off period.
An agent will recommend a method of sale based on the:
- type and location of your property
- market conditions
- your timeframe and personal preference.
The agent should support their recommendation with recent sales data.
Make sure you understand all the advantages and disadvantages before deciding how to sell your property.
- The agent’s commission is generally the same whether the property is sold privately or at auction.
- There are usually additional costs involved in selling by auction; for example, the auctioneer’s fee.
An auction may provide a better opportunity to sell by a specified date if you must sell quickly. However, there is no guarantee that the property will sell at auction or that it will fetch the best price. If you can, avoid selling in a hurry.
Reserve or asking price
The lowest price at which you are prepared to sell your property is your:
- reserve price for an auction. You usually set the reserve price on the day of the auction
- asking price for a private sale.
To help work out your asking or reserve price:
- get to know prices in your area by checking websites and newspapers for similar properties listed and sold locally, and attending auctions and open for inspections
- use the agent’s estimated selling price as a guide
- consider paying for a valuation by an independent sworn valuer.
- be realistic and do not allow emotion to cloud your judgment.
This will help you avoid disappointment and the risk of buying a new property based on unrealistic expectations of the sale price of your current home.
The sales campaign aims to attract prospective buyers and encourage them to inspect a property, usually through advertising and direct notification.
This is the main way of attracting prospective buyers. The advertising strategy will depend on the type and location of your property and your budget.
Advertising lets prospective buyers know that the property is for sale and may list the inspection dates and times. It also includes details of the agent handling the sale.
Property advertising must not be misleading or deceptive. It is illegal to misrepresent a property in any way when advertising or marketing that property, whether verbally or in writing and photographs.
You must ensure any information provided to the agent about the property is factual and up to date. If advertising is not accurate, and a buyer can prove a property has been ‘misrepresented’, the buyer may be able to take legal action.
The agent may have a list of prospective buyers to contact when suitable properties become available. These are people who have previously registered their interest with the agency.
When marketing a property, it is illegal for an agent to quote or advertise a figure that is less than:
- your asking price or reserve price if you have set such a price, or
- the agent’s estimated selling price or range, stated in the sales authority.
Underquoting is unfair to buyers who may waste time and money inspecting a property they cannot realistically afford. It is also unfair to a seller expecting the agent to generate genuine interest from prospective buyers prepared to pay a fair price.
Before advertising your property for sale, an agent will generally ask you to approve the advertised price and to confirm in writing that you will consider all offers at the advertised price or within the advertised price range.
Agent's estimated selling price
This is the price the agent estimates a property is likely to attract, based on their experience and knowledge of the market.
If recorded as a range, the top of the estimated selling price range must not be more than 10 per cent of the bottom figure. For example, a quoted range of $400,000 to $440,000 is $400,000 plus 10 per cent.
The agent's estimated selling price does not have to be the same as the seller's asking or reserve price.
If a seller has not provided an agent with an asking or reserve price, the property must not be advertised for sale at a price that is less than the agent's estimated selling price.