Listing a property for sale is not a five-minute job. There is a raft of questions a good agent must ask if they are to represent the owners and their property in a manner that achieves the best possible result and that is within the bounds of real estate and consumer law. At the same time, there are certain obligations that the homeowner has in regard to vendor warranties and responsibilities; a competent agent will discuss these matters in detail with the vendors before offering a property for sale. We will cover the main areas of responsibility for both parties to consider in this and the next blog post.
In the majority of real estate transactions, the agent is acting for the home seller and in that role has a fiduciary responsibility to deliver the best possible advice to their client. This requires the agent to provide a service that will give the homeowner an opportunity to receive the optimum price the market will pay in a manner that is legally compliant and stress free. To achieve these objectives the pre-sale preparation and information gathering is vital. It requires planning and a clear understanding of the vendor’s objectives in terms of price and timing. In addressing this topic we will approach the subject from two angles. Firstly, covering information that should be provided by the listing agent to the vendor and secondly, information that the vendor should provide to the agent.
Advice to the property owner
An agent must provide potential home sellers with:
- A written appraisal giving the agent’s best estimate of market value. This estimate must be supported by recent sales data relating to similar properties and where possible, they should be in the same or similar locations.
- Details of the various methods of sale along with the agent’s recommendations.
- Marketing options with recommendations and costings.
- Details of the agent’s commission and marketing fees with an actual estimate based on the appraised price.
- Details of any subsidies or benefits accruing to the agency.
- A discussion on the merits of providing a Land Information Report (LIM) at the owner’s expense and whether any builder’s or other specialist reports should be obtained to facilitate a sale.
- An explanation of agency obligations under both exclusive and general agencies to avoid any possibility of the seller having to pay two commissions.
Information required by listing agent
There is certain information that a competent agent will want to glean from the homeowner.
- An important responsibility for both the vendor and the agent is to inform potential purchasers about any matters that may have a bearing on their buying decision. Obvious examples include whether there have been any weather tightness issues, or perhaps, if there have been any works carried out that have not been correctly permitted or signed off with Code Compliance Certificates. These matters are part of the vendor’s disclosure responsibilities and we cannot stress too strongly how important this information is.
- What are the main selling features of the property? What attracted the present owners to buy the property and what have they particularly enjoyed while living there.
- There needs to be a clear understanding of acceptable viewing times.
- Is the property subject to any tenancy agreements? If so the tenant’s rights under the Residential Tenancies Act need to be respected and observed.
- Of most importance is the fact that both parties must have a unified agreement on what their target price expectations are. Leaving this issue to chance will more often than not, lead to frustration and disappointment if the owner’s expectations are unrealistic and cannot be achieved. There are no winners in this situation.
This is a brief overview of the information that is to be exchanged between the homeowner and the agent. We will provide further information pertaining to this topic in our blog post.