A for sale by owner selling their property privately with no agents should be able to provide an answer to this question within 15 seconds of reading it, if not then the real estate by owner should not be selling their property privately with no agents.

On too many occasions real estate by owners selling privately have not had a specific reason to sell their property resulting in the private house sales process being a complete disaster. This is increasing apparent during times when property prices are on the rise and property owners conducting a no agents sale as a for sale by owner (FSBO) decide to “test the waters” by placing their property on the market and setting an unrealistic listing price.

Below is a list outlining the reasons why a for sale by owner (FSBO) property will not sell if the real estate by owner does not have a clear reason to sell the property;

Unrealistic listing price – For sale by owners (FSBO) will only accept a price which is well above the market value of the property and will not be prepared to move from this unrealistic listing price.

The for sale by owner (FSBO) is unwilling to commit marketing resources – Inadequate money and time spent on the marketing strategy for a private property sale will limit the audience who are informed that the property is on the market.

Lack of property preparation – As the real estate sale by owner is not committed to the sale they will not spend time and money to prepare the property for sale. If a property has not been prepared correctly then this could affect the first impression a potential buyer has when they inspect the property.

Stale listing – This affects many for sale by owners (FSBO) who are conducting a private real estate sale as a listing which has been on the market for an extended period of time will convey a negative image to potential buyers. Buyers will be concerned that there is something wrong with the property or that it is overpriced.

Future Price Reductions – When the for sale by owner (FSBO) does decide they would like to sell the property for a more reasonable price they will need to drop the price more than what the initial market value of the property was. The only way to sell a stale listing is to offer a “bargain” and reduce the listing price below the market value of the property.

If a property owner is conducting a no agents sale or no commission sales and the property is on the market when they are not 100% committed to the sale, can have a dramatic affect on the final price the for sale by owner 9FSBO) sells their property for.

Every property which is advertised For Sale including all private property sale or for sale by owner are required to be accompanied with a draft Contract of Sale outlining the conditions of sale. A final Contract of Sale will be prepared as soon as the buyer and for sale by owner have agreed on the final conditions of the private property sale.

A contract of sale usually includes the following information;

• The for sale by owner name(s)
• Blank space for buyer’s name
• Solicitor’s name (if any)
• Agent’s name (if any)
• The type of title
• Details of items included with the sale
• Details of items not included with the sale
• The sales price
• Exchange of Contract date
• Settlement date
• Notifications from authorities
• Details of tenants
• Special Conditions

We strongly recommend that all property owners who are coducting a private sale as a for sale by owner seek the services of a Solicitor or Conveyancer to prepare the Contract of Sale. Although there are many Do-it-Yourself (DIY) Conveyancing kits which can be used to prepare the Contract of Sale, the legal system is quite complex and the experience of a professional in this field can never be overlooked. By conducting a private house sales a real estate by owner selling their property through a no agents sale with no commission will already be saving large amounts of money.

The added benefit of a Solicitor or Conveyancer preparing the Contract of Sale is that they can deal directly with the buyer’s Solicitor which should result in a quicker exchange of contracts.

By engaging the services of a professional to create the Contract of Sale a for sale by owner conducting a private real estate sale can be assured that all the terms and conditions agreed to with the buyer in regard to the sale of the property are correctly documented and executed.

A for sale by owner selling their property privately with no agents must always use a solicitor to finalise the Contract of Sale for the property.

I recently had the pleasure of spending a week in WA and let me say things there are not looking too good for the Australian economy and the real estate sector. This is bad news for a private real estate sale or for sale by owner (FSBO) as it is going to result in lower demand for real estate across Australia.

You only have to open the WA Times to see numerous articles about the mining industry and how what were lucrative and long term contracts with China are now disappearing with the demand for coal drying up. This has resulted in mines laying off staff and in some cases mines moving into liquidation.

This loss of jobs and future job uncertainty has affected the property market in Perth with last quarter property market growth for the state falling to -4.8% and with this quarter forecasts looking even worse. The mining industry and WA economy has been the Australian economy’s savour in the past few years and with this faltering, could mean the Australian economy can’t avoid that recession which keeps hanging around like a bad smell.

As a for sale by owner (FSBO) trying to perform a private real estate sale it could be best to accept that property offer which is just below the price you are expecting to receive. If not, then you need to lock yourself in for a long ride as the Australian real estate market will only go one way from here.

It appears that executive rental apartments (real estate greater than around $800 pw) are increasingly becoming vacant and are sitting on the market vacant for extended periods of time. This isn’t good for real estate investors who have often paid premium dollar for these exclusive apartments in sort after suburbs of major cities across Australia.

To highlight this problem, I was down at a local real estate office yesterday in Bondi and noticed that 70% of their rental apartments displayed in their shop window were leased. Out of the 30% left, around 3/4 of the apartments available were priced over $800 pw. So cheaper apartments are moving quickly but expensive apartments are not.

Why is this? Because most of the tenants of these exclusive apartments are executives and obviously the economy is affecting the companies they work for and the salaries they are receiving. Is this a sign of a recession looming?

As a property owner have you ever thought of purchasing a run down property and then doing a DIY or private real estate renovation on the property? Plenty of people have done it and plenty of these people have made a good real estate capital gain (CGT free of course) from the sale of the property and even saved money through a DIY private property sale. All that is needed, is real estate market timing, an eye for a bargain and hard work.

Now the real estate and property market has cooled and interest rates have started to fall is a great time to start looking for that DIY renovator’s dream property. A few tips which can help you find the perfect piece of real estate include:

• Look for real estate in a growth area
• Look for real estate located in a street where the other houses look good
• Look for real estate which is within your DIY skill set or budget
• Look for real estate which is liveable during the renovations

Once you have the perfect property you then need to:

• Outline a timeline and plan
• Search around for good, reliable and cost effective contractors (if needed)
• Think carefully about the style, colours and features of the property (eventually you will need to sell it to someone else)
• Start sourcing the materials needed, the internet is usually a great place to start.

Many property owner and for sale by owner sellers view downturns in the real estate market as a huge crisis. If you are a property owner upgrading your property (so you are selling a property and then purchasing another property) you will actually benefit from a reduction in property prices in real estate across Australia.

How is this possible? Lets look at an example.

If five years ago a property owner purchased a property for $400,000 and at the peak of the real estate boom the price of the property had increased by 20% to $480,000. At the same time a property priced at $800,000 would have increased to a price of $960,000 at the peak of the property and real estate boom.

Lets assume the property owner upgraded their property at the peak of the real estate boom, so the property owner sold the property and purchased the bigger property.

Proceeds $480,000 – Cost $960,000 = Net amount to borrow $480,000

Lets assume i didn’t sell my property at the peak of the real estate boom and sold it yesterday and purchased the bigger property at the same time.

Proceeds $400,000 – Cost $800,000 = Net amount to borrow $400,000

Hang on what is going on here? The property owner needs to borrow $80,000 less if they sell their property now and purchase another property rather then do this in the real estate boom. There is a false misrepresentation within the real estate industry that a reduction in real estate and property prices are negative.

A reduction in real estate and property prices is negative if you are a private seller downgrading your property or an investor selling a property. But if you are an investor purchasing a property or a private seller upgrading your property a reduction in real estate and property prices can work in your favour.

There is often confusion amongst for sale by owner and property buyers about what is involved during the Settlement of the property. Settlement Date is the date at which the remaining Purchase Price of the property is paid to the property owner and the title deeds and ownership documents of the property are given to the purchaser.

For Settlement of real estate to occur a few critical things need to happen:

1. Property and Pest Inspections – Before settlement date the purchaser will have these inspections performed, the property needs to be satisfactory and meet the purchasers expectations.
2. Cheques Drawn Up – The purchaser needs to draw the settlement cheque up which is the Purchase Price less the deposit. As a seller it is best to request a Bank Cheque rather than a personal cheque as this way you know the cheque won’t bounce.
3. Transfer Papers – The seller needs to prepare the transfer of ownership papers before settlement which will be provided to the purchaser.
4. Final Inspection – The purchaser will perform a final inspection of the property in the days leading up to settlement making sure the property is as per the contract of sale.
5. Settlement – Bank cheque is provided to the sellers and the titles, ownership documents and keys are given to the purchaser.
6. Post Settlement – The purchaser needs to pay stamp duty and then transfer the Title Deeds into their name.

As you can see there are a few things involved in the settlement of a property. Although you can perform the majority of these tasks yourself we do recommend that you contract the services of a conveyancer or solicitor to perform these tasks for you. It won’t cost too much money and by doing this you know everything will be completed correctly meaning no legal loopholes should appear.

For sale by owner and private real estate sale sellers will benefit from the recent 1% real estate reduction regardless of the amount the retail banks decide to pass on. All this hype about the retail banks not passing on the full interest rate reduction is all nonsense and irrelevant to for sale by owner and private real estate sale sellers.

The Reserve Bank of Australia reduces interest rates according to a number of economic indicators. The official cash rate they stipulate is dependent on how they would like to adjust these economic indicators. They don’t have a lower (or upper) limit on what they can reduce (or increase) this cash rate to. So if banks decide to only pass on the 25% of the interest rate reduction then it simply means the Reserve Bank of Australia will reduce rates in the coming month until these economic indicators have adjusted and are reflecting what they want them to.

To all the media and in particular my local MP Malcolm Turnbull, shut up and start reporting about real issues in the Australian economy.

Private real estate sellers often forget to have a prepared Contract Note for interested parties to view when they are showing their property. It is against the law to advertise or market real estate for sale unless this Contract Note has been prepared.

What is a Contract Note? A Contract outlining the terms and conditions for the sale of real estate.

Things which are usually included are:
• Vendor Details
• Purchaser Details
• Solicitors Details
• Property Address
• Purchase Price
• Deposit Paid
• Settlement Date
• Cooling Off Period
• Inclusions
• Exclusions
• Encumbrances
• Special Conditions
• Signature of Each Party
• Signature of Witness

Once both the property owner and purchaser have signed this contract it becomes a legal binding document meaning both parties need to fulfil their obligations.

Why does the Contract Note need to be available at property inspections? So interested parties can cross reference the Contract Note with the actual property making sure they agree with the things which are included or excluded and any encumbrances the property might have. It also allows the purchaser to view the terms and conditions the vendors have stipulated allowing the purchaser to better prepare an offer.

Let’s not forget, that if you have a prepared Contract Note at the property then there is the chance that someone may be swept off their feet and make an offer you accept and will sign the document on the spot. This has been known to happen so you need to make sure you have the documents for this to be possible.

Where to get a Contract Note from? We highly recommend that you consult a solicitor or conveyancer about preparing a Contract Note. The Law Societies and Real Estate Institutes of each state have prepared a formal Contract Note which they sell to real estate agents and property owners for a small fee. Alternatively, there are DIY conveyancing kits on the internet which can be used and also Privatepoint has prepared their own Contract Note which we are happy to provide free of charge to any of our members.

I spent a few days last week working in Brisbane and was able to spend a bit of time around the Gold Coast, Hope Island and then up to Maroochydore. Although property prices have reduced from what they were 12 months ago the reduction in this area of Australia has been far less than anywhere else.

The reason property prices have stayed strong in this part of Australia is because it is the destination of choice for both domestic and international immigrants. South east Queensland has approximately 2000 people immigrating to it each week, it is this demand which is stabilising the price of houses in the region.

Why are people moving there? Well, there are a number of reasons including:

• Climate with winter days similar to a late spring day in southern NSW.
• Generous tax breaks, although NSW has removed vendor tax QLD state taxes are more attractive to investors.
• Lifestyle, because the Gold Coast and Sunshine Coast is spread out over a vast array of coastline means many home buyers can live the dream of being next to the beach.
• Affordability, this dream is affordable.
• Retirement, a large portion of Australia’s retirees are settling there.