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Private sale of property
In a private sale:
- the property is advertised and prospective buyers are invited to make offers
- you and the buyer agree on a sale price through negotiation, usually with assistance from an estate agent
- the contract can be conditional. If you agree, the buyer can make the sale subject to getting a loan, a satisfactory building inspection report, or other conditions.
For private sales of residential and small rural properties, the buyer has three business days to change their mind. This is called a ‘cooling off' period. For more information view Cooling off on a property sale.
Considering offers for your property
Do not accept an offer unless you are completely satisfied and willing to sell at that price.
A buyer may make an offer verbally or in writing. A written offer may be in the contract of sale, which you would also sign if you accept the offer.
A buyer can withdraw their offer at any time before you accept it.
If an agent is managing the sale, offers will:
- be made through your agent
- generally be in writing using the contract of sale
- usually be accompanied by a full or part deposit, depending on the terms of the contract. There are no laws about the amount of deposit but it is usually 10 per cent of the purchase price. This deposit will be returned to the buyer if you do not accept the offer.
If an agent is not managing the sale, the buyer makes their offer directly to you, and you manage negotiations with prospective buyers.
A buyer can write into the contract a date by which their offer will lapse.
In a private sale, you can agree to make the sale subject to conditions, such as the:
- buyer getting a loan (‘subject to finance’)
- sale of an existing property
- successful completion of a building or other inspection.
If the contract is subject to getting a loan, the buyer should always nominate a lender in the relevant section of the contract.
The buyer cannot place conditions on a sale at auction.
Negotiating private sale of property
Through negotiation, the agent will attempt to achieve a mutually acceptable price and terms for the sale. This negotiation may involve:
- verbal offers, which must be followed up in writing in the contract of sale
- written offers, which may be in the contract of sale, and if not, must be followed up in the contract of sale
- more than one person making an offer. The agent will negotiate between parties to obtain the highest price for you
- the settlement period. This is usually between 30, 60 or 90 days but you can negotiate an alternative with the buyer
- agreeing on the items that will be included or excluded from the sale; for example, a dishwasher.
Make sure the contract of sale lists the items that are part of the sale. If not, it may be difficult to determine who owns those items at settlement.
When is the property sold in a private sale?
The property is sold when both the buyer and you have signed the contract of sale. The buyer signs the contract of sale to make an offer, and you accept it by signing the contract of sale.
All parties who sign the contract must be given a copy.
The sale is finalised at settlement when all checks have been made, the title and transfer documents exchanged, and the balance of the purchase price has been paid.
Contract of sale for the private sale of property
A contract of sale contains:
- details of the property
- your name and the buyer’s name
- the name of your estate agent, if you are using one
- details of legal practitioners or conveyancers that you and the buyer have engaged
- the price
- the deposit paid
- the balance owing at settlement
- any special conditions such as ‘subject to finance’.
An agent can complete the details on a contract in preparation for the buyer and you to sign.
Cooling-off on a property sale
A buyer has a cooling-off period of three clear business days for private sales of residential and small rural properties, regardless of price.
The cooling-off period gives the buyer time to consider their offer. It begins from the date the buyer signs the contract, not from the date that you sign it.
To cool-off, a buyer must give you, your estate agent or other agent written notice. The buyer is entitled to a full refund of any money paid (usually the deposit), less $100 or 0.2 per cent of the purchase price, whichever is greater.
The cooling-off period does not apply if:
- the buyer previously signed a contract for the same property with the same terms
- the buyer is an estate agent or corporate body
- the property is purchased within three clear business days before or after a public auction
- the property is used mainly for industrial or commercial purposes
- the property is more than 20 hectares and used mainly for farming.
What if my property does not sell by private sale?
If your property does not sell, you will be required to pay the marketing expenses but not the agent’s commission.
You should reconsider your asking price. Ask the agent for feedback on what people are saying about the price, features and condition of your property.
If you do not have to sell urgently, consider withdrawing your property from the market. Keeping a property on the market for a long time can reduce the likely selling price. You can put it back on the market later.
Check the termination date on your sales authority (your agreement with the agent). If they do not have exclusive selling rights, try another agent. A fresh approach and a new marketing campaign may be successful.