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I Want to sell my house, where do I start?

By George Hadgelias

Selling your home is a big decision, both financially and emotionally. Once you decide to sell there are a number of steps to work through before your house goes on the market. Find out how to set a price for your home, when and how to sell and what happens to your mortgage when you sell your home. It’s time to get ready to sell.

Where to start?

There’s lots of reasons Aussies choose to sell: outgrowing a current property, a change in life circumstance, even just itchy feet. After thinking long and hard and answering questions like “should I renovate or sell?” in the middle of the night, thousands every year choose the exciting step of selling.

Once the decision is made, where do you begin? Well, start right where you are. Before even contacting an agent, you should get the property as close to “open home-ready” as possible by de-cluttering, tidying up the garden and getting it all looking tip-top. Then you can move on to when you want to sell, for how much, how you want to sell and what you want to look for in an agent.

How much is my house worth?

The question of how much your house is worth is a big one. There are many factors that will determine just what you should be asking. can help you find an easy answer to the estimated value of your property using its cutting-edge automated valuation model. The model generates an estimated value for your property through analysis of a broad range of data, including:

  • Property type (ie house, townhouse, strata title etc)
  • Land size and location
  • Comparable sales (ie similar homes that have sold nearby)
  • Market trends, current and historical
  • Property characteristics, such as the number of bedrooms, bathrooms, garages and the size of the property’s footprint.

You can also get an estimated value using an agent appraisal, a bank valuation and other desktop and automated valuations.

Auction vs. private sale?

Generally speaking, auctions are especially suited to properties in high demand or that have a unique feature. Auctions are a competitive, public process and this can help really drive up the selling price. And there’s no cooling-off period. For those not so comfortable with this transparent process or who may have a property where demand is not as high, a private sale may be a better option. In these cases, the property is listed with an asking price through an agent, who then markets the property and presents offers back to the seller. These sales are less public, can be less costly than auctions and also include a cooling-off period where the buyer has time to change their mind.

Some properties are also sold “off the market”, that is, sold without any public advertising. Selling off market is not an ideal way to achieve the maximum price, because without competition, there’s no way to push the sale price up. A major consideration is what type of property you’re selling. If the property is an investment or tenanted property or a deceased estate, you will have some different things to take into account than if you’re an owner/occupier.

Selling a tenanted property

If your property is tenanted, you will need to consider the effects on your tenants. Tenants’ rights vary from state to state and you should make yourself familiar with them for your area. The approach to selling a tenanted property depends on whether it will most likely be purchased by an investor or owner-occupier. If you anticipate the property appealing to an owner/occupier, how you manage tenants becomes more important. While a landlord is legally allowed to sell their property at any time, a fixed-term rental lease also remains legally valid until its end date, so it’s important to work with tenants on a mutually agreeable approach if you want to sell. It’s possible to end a tenancy agreement early by mutual consent and you can also offer tenants compensation to move out, if you want to offer the property without tenants. If the tenants insist on staying and the property is being marketed to owner/occupiers, it might be worth considering waiting until the lease has ended.

Selling a deceased estate

Sales of deceased estates run along much the same lines as any other sales, but there are some extra considerations. The laws and processes surrounding the sales of inherited property varies from state to state, so make sure you get some good legal advice to help you through. In most cases, the executor of the Will becomes the owner of the property and is responsible for ensuring all taxes and debts associated with the property are paid and that all people owed entitlements to the estate are paid correctly.

Capital gains tax when selling

The issue of capital gains tax when selling a house is another thing sellers need to understand. Generally, if a piece of property is sold for a gain – which often happens with an investment property – capital gains tax (CGT) is payable. But there are always exceptions. For example, no CGT applies if the property is a person’s main residence, or if the property was purchased before September 20, 1985.  Meanwhile, small business concessions on CGT may also apply if the property is used in relation to a business and the taxpayer passes a variety of tests.

There are a number of concessions and exemptions when it comes to paying CGT and numerous strategies designed to reduce your overall tax bill, too. It’s smart to be across them all and seek qualified financial advice.

When to sell your home

There are a myriad of factors that can determine if now is the right time to sell, so researching your market is the key. Look at similar properties that have sold in your area and find out whether the prices are near what you’re looking for and also if the demand is there. Overall economic conditions, will also play a big part. If there are a large number of “stressed” sales forced by tougher financial conditions, this could drive down prices overall.

Even the weather can play a part. Spring usually sees a spike in house buying in most areas. Or if your house gets good natural light all year round, winter might be best for you, when there’s less competition. Ultimately, supply and demand will play the biggest roles. If there’s high demand and lower supply, this will bode well for your sale. Obviously, your own financial position plays a central role too, so talk to your trusted advisers about when makes sense for you to sell.

Finance options when selling

While pondering the process of selling your property, it could be a good time to consider some of the financial options open to you. Why not consider refinancing your loan? Discharging your current loan by opening a new one can offer many more advantages than just getting a better interest rate. You could get better features, such as redraw facilities or an offset account to reduce both the interest and amount you have to pay back. If you want to renovate or extend but don’t have the cash, refinancing can sometimes be the cheapest option to raise it.

Perhaps you’re looking to buy a second, investment property instead of selling. If you have paid back a sufficient amount on your current mortgage, this can be used to finance a second loan for an investment property. The amount you have paid back, or actually own in your home, is known as equity and gives you opportunity to expand your portfolio. Make sure you do your maths and understand the rules first, so it’s always advisable to talk with a financial planner or institution first.

Sometimes when selling, it can be to your advantage to buy first, especially if property values are increasing quickly and your property type is in high demand. Securing a bridging loan will allow you purchase a property before you have received any proceeds from selling your home. As ever, everyone’s situation is different, so always discuss your options with a financial expert.

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