Know the key players in your property sale and their motivations

In this article, we take a look at the key players in a property transaction, including buyers, sellers and paid property professionals such as real estate agents, financial specialists and legal experts.

It helps to understand each party’s motivations, priorities and expertise in order to achieve a sound and successful property deal.

The buyer

The first step a buyer should take, says Christine Bagley-Jones, Principal Psychologist at the Counselling and Wellbeing Centre Qld, is to identify where they think their strengths lie and whether they are capable of undertaking a potentially pressure-filled process or whether they would rather outsource it.

“You need to decide whether this is something you feel confident about. We outsource so much these days that it is not a problem enlisting someone else – it can be an agent, buyer agent, trusted family member or your solicitor,” says Bagley-Jones. “That said, it isn’t an overly complicated experience once you’ve made your up-front decisions, such as how much you want to pay and the type of property you are after.”

Bagley-Jones encourages buyers to create a spreadsheet with all the criteria they are looking for so they know the boxes a property needs to tick. This can help them identify when they’ve fallen in love with a property that doesn’t have everything they actually need.

Needless to say, a buyer should research the local market, review recent sales and try to gain some insight into the vendor’s reasons for selling. A certain amount of up-front disclosure from both the seller and the buyer can help negotiations  and demonstrate that the parties are serious about the deal.

If buying by private treaty,  there is a greater opportunity to exit the sale; if buying at auction,  you must have done your planning prior to the day. With an auction, it is also important to set your purchase limit and to stick to it.

“Write a price on the palm of your hand that you won’t exceed – it should factor in the final price you can pay if pressed. If the price is exceeded, walk away!” says Malcolm Gunning, President of the Real Estate Institute of New South Wales.

The seller

When selling, Bagley-Jones says it is important for owners to be clear about why they are selling and what their minimum price is. This way, if they receive an offer that is not exactly what they had in mind, they can review it with clarity.

“Even if the selling price is lower than your asking price, it may still meet your needs, such as giving you the freedom to exit a situation you want to be free of,” she explains.

“Often sellers hang on to properties because they have a set figure in mind, when it might have been better to accept a slightly lower offer months before. The few thousand dollars might be absorbed in interest repayments. Just be realistic – people’s personal attachments can inflate their sense of value beyond fiscal calculations.”

Gunning says that both parties should remember the emotional nature  of buying and selling property, and that many vendors do care who they are selling to. “For example, an owner who is selling an old family home in an established suburb may not sell to the highest bidder but to the family they feel will love the house the most,” he says.

And though in some cases the vendor and seller don’t know each other, Gunning says that deals tend to go astray when the parties don’t show empathy. “I don’t see many deals go through where the vendor and purchaser don’t like each other.”

The real estate agent

You should be able to rely on your real estate agent for negotiations, which is why it is important you work with an agent that you trust and can relate to.

“The agent is the most skilled at negotiations, and it is what they do as a profession,” says Gunning. “A good agent will work for both sides in the negotiation, as the best outcome is that everyone is happy –a good agent uses a successful sale to be able to sell more property and build new relationships. But never forget that the agent is paid to look after the vendor and their interests.”

Gunning recommends looking for an agent who takes a transparent approach and who shows empathy for both parties, as “agents are paid a lot of money to handle the emotions involved with buying and selling homes”.

It is common for an agent to be asked why the owner is selling and for the agent to ask potential purchasers why they are interested in buying. People can take offense to these questions, but it helps to provide context and meaning around the sale. Understanding each party’s motivations  will indicate the level of seriousness in the sale and helps improve negotiations.

“For example, if you’ve got someone who has a contract exchange on a property and they are wanting to buy another property at auction, then they will need a simultaneous settlement and the agent needs to work very hard to bring that together,” explains Gunning.“The agent assesses each of the party’s motivations and then uses that to hopefully get a seamless negotiation at the best possible price – that’s what you pay them for.”

Legal and financial services

There are a number of legal processes involved in buying and selling property, also known as the conveyancing process. This includes things like reviewing the sale contract and mortgage agreement, undertaking title searches and certificate checks, drawing up the Transfer of Land and organising building inspections.

“A buyer’s solicitor should check the contract and any other relevant documentation, and can help you understand the terms of your loan agreement or mortgage,” explains Richard Harvey, property law specialist and Law Society of New South Wales representative.

“A seller’s solicitor will prepare the sale contract and can also help the buyer with the terms of the real estate agency agreement, negotiating any changes to that agreement before it is signed,” continues Harvey. “If the property is tenanted, a seller’s solicitor will also need to review the status of that tenancy to determine whether the property can be sold with vacant possession or will need to be sold with that tenancy in place.”

To find a solicitor or conveyancer, contact your state or territory’s local law society or conveyancing institute.

Obtaining financial pre-approval is highly recommended regardless of the method of sale. Your financial advisor (mortgage broker, bank manager or qualified financial advisor) should work with you to assess your personal finances and to help you obtain the most suitable and competitive home loan in the market.