What are the advantages and disadvantages of selling my house privately?
Some people choose to sell their house privately, without the help of a real estate agent. For others, the skills, resources and experience of a real estate agent are worth the price they pay in commission. You should weigh up the pros and cons of selling your house privately before making a decision.
The main advantage of selling your house privately is to save on the cost of a real estate agent commission (you could save thousands of dollars depending on the eventual selling price). By selling the house yourself, you will also have more control of the sale and negotiation process by having direct contact with potential buyers.
On the other hand, real estate agents are experienced in selling houses. They know the market conditions and prices, and have marketing and negotiating skills. They also have access to print publications and specialist websites used to market homes for sale.
Selling your house yourself may not be as simple as you think, and may take a lot of time and effort. You should also consider whether you would be happy presenting yourself and your house to strangers. Read the information we've provided below to help you decide whether this is the option for you.
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What are my legal obligations as a seller?
You can only sell a house that you own. You cannot sell someone’s house, and charge them a fee for the service, unless you are a licenced real estate agent.
You have legal obligations in relation to disclosure:
- If you are selling a unit title (eg town house or apartment) you have certain disclosure obligations. You will also need to advise the body corporate that you have sold your unit.
- You should disclose any information you are aware of that may be relevant to the buyer, this includes:
- any weather tightness issues; and
- whether you have the necessary building consents and code compliance certificates for works carried out while you owned the property.
You could be liable for legal action if you provide misleading or false information about the property - even if you honestly believed the information was correct.
There are also conveyancing tasks that will need to be completed once you have found a buyer, which most people pay a lawyer or conveyancer to do.
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I’m selling my house myself. What are the steps?
- Make any minor repairs and changes to make the house more saleable (e.g. removing clutter, cleaning the carpets, repainting walls).
- If you have made any improvements to the property which required building consent, make sure that you have a Code of Compliance Certificate from the council for this work.
- Decide what you want to leave in the house (i.e. the chattels).
- Value your property.
- Set a sale price.
- Prepare background information for potential buyers.
- Choose a lawyer to do the conveyancing or other related services.
- Negotiate a price with interested buyers until you and a buyer have agreed on the price and conditions, and sign a Sale and Purchase agreement.
- Once an offer has gone “unconditional” (when all of the conditions in the sales and purchase agreement have been met, and the buyer is legally bound to buy the property), prepare to move out by arranging for:
- the discharge of the mortgage if you have one on the property;
- the electricity, gas and water meters to be read on the possession date;
- your phone account to be transferred;
- NZ Post to redirect your mail;
- your house and contents insurance to be cancelled or transferred; and
- your newspaper and any other regular deliveries to be cancelled.
- On the settlement date, your lawyer will collect the money from the buyer’s lawyer. The buyer is now entitled to take possession of the property and have the legal title transferred to their name.
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I want to exclude my stove from the sale. Can I do this?
When you are deciding on your sale price, you need to decide what items you want to leave in the house. You need to include in your contract specifically what is included and excluded. Fixtures are usually included in the sale, while only specified chattels are included.
- fixtures: items that are fixed to the land or buildings, so that they are part of the land e.g. stove, shed, built-in furniture.
- chattels: items that are not fixed to the land or building structure e.g. fridges and are only included if specifically mentioned in the sale and purchase agreement. If chattels are included in the sale, they should be listed in detail in the sale contract. Some standard sales and purchase agreements included common chattels such as stove, fixed floor coverings, blinds and curtains.
If you decide to exclude specific fixtures or include specific chattels, you just need to ensure that potential buyers are told this, and that it is noted in the sale and purchase agreement.
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How can I get my property valued?
You can value or get an estimate of your property by obtaining:
- a Council ratings valuation (or “rateable value”): this type of valuation is for the purpose of deciding how much your rates bill should be, and is not usually a good substitute for a valuer’s report nor a clear indication of current market value, because these valuations:
- are generally only carried out every three years;
- do not include chattels; and
- generally do not include improvements or renovation work which did not require building consent.
You can contact your local council to find out what your current ratings valuation is, or to find out how to have your ratings valuation reassessed (note that your rates are normally based on the valuation of the property). Most councils contract this work out to specialist companies. There is usually a fee for a reassessment.
- a property valuer’s report: this is a report from a registered valuer. It’s a good way of getting an indication of the market value of your property. The report should include information on:
- the general appearance, age, size and condition of the house, both interior and exterior;
- the size and condition of the grounds and section;
- the type of title of the property;
- the locality; and
- comparable recent sales of other properties in the area.
It might also include information about schools and services in the neighbourhood, aerial photographs of the property etc. This isn’t a structural report, for which you need to hire a builder or an engineer. Information about structural building inspections is on our Pre-purchase checks page.
You can find a registered property valuer by:
Real estate agents often do free valuations for home owners who might become potential clients.
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How do I decide what my sale price should be?
Once you have a good idea about what your property is worth by having it valued, you can decide on a price range to place on your property. You should consider:
- how much money similar properties in your area have sold for (if it's not in your valuer's report you can purchase this information from Quotable Value, obtain it from a real estate agency or look on the homes website);
- the minimum price you are willing to accept (e.g. in order to buy a new place to live in); and
- how long you are willing to wait for the house to sell (a lower price may result in a quicker sale).
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What can I do to attract potential buyers?
- advertise in the property section of the local paper;
- advertise in specialist property publications;
- advertise on the Internet - some websites will do this for a fee, others will list your property for free;
- put up a sign in a prominent position on the property (you might need to check with the council for any sign restrictions);
- ask your friends and family to tell other people about your property; and/or
- put up notices at workplaces and on community noticeboards.
You should work out a budget for advertising, because it can get pretty pricey. Although it’s not mandatory, it’s a good idea to get a selection of photos of your house showing it at its best, and using these in your advertising. Make sure any advertisements include accurate details about how and when you can be contacted. If you don't want calls from agents offering their services you can include the words “no agents please” in your ads.
Some businesses sell marketing packages which include items such as ‘For Sale’ signs, Sale and Purchase Agreement forms, advertisements on their online or printed publications, brochures etc.
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What can a lawyer do for me when I’m selling my house myself? Do I have to have one?
A lawyer can:
- advise you on the legal aspects of selling a house privately (obligations to the buyer etc);
- help you write up the sale and purchase agreement;
- check over amendments to the sale and purchase agreement while you are in negotiations with the buyer;
- liaise with the buyer’s lawyer;
- receive and hold the buyer's deposit into a trust account;
- arrange for the transfer of the legal title;
- arrange the release of mortgage documents as required by lending institutions, and arrange mortgage repayments;
- receive final payment from the buyer’s lawyer and arrange for keys to be transferred;
- arrange for the transfer of rates payments as at the settlement date;
- forward a notice of sale to Land Information New Zealand and the local rating authority;
- arrange payment of the net proceeds of sale;
These services make up what is called conveyancing (the legal work in relation to the sale and purchase of real estate).
When you choose a lawyer, you should think about not only their fee, but also whether the lawyer:
- usually practises in the residential property market;
- is readily available when you need to make contact;
- communicates with you, gives you a sense of security and keeps you informed;
You need to make sure that you and the lawyer are clear on what work they will do for you, and agree on the fee. More information about how a lawyer can help when you are buying or selling a house is on the New Zealand Law Society's website.
It’s possible to do all of the above tasks yourself, but most people prefer to have at least some of these (e.g. checking over the sale and purchase agreement, the transfer of the title) done by an experienced professional. In particular only people with a licence from Land Information New Zealand can transfer a title online, otherwise you need to do it manually.
If you are concerned about legal costs, you may be able to get the conveyancing done for a smaller fee by a conveyancer rather than a lawyer. Remember that a conveyancer won’t be able to advise you on related matters such as relationship property, wills, family trusts, and so on - while a lawyer can.
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I’ve got an interested buyer. What do I do now?
If you will be using a lawyer, it’s a good idea to get advice from them before you start negotiations, or to involve them in the process. You’ll need to have a written sale and purchase agreement, which you and potential buyers will use to negotiate the terms of the sale and to record the agreement that you eventually make with the buyer.
The potential buyer may make an offer on your house by signing a sale and purchase agreement which includes the amount they offer to pay, as well as any other amendments they wish to make to the agreement.(e.g. adding that the sale is on condition that they will be able to get the finance necessary).
You can then counter-offer if your buyer is suggesting a price lower than your asking price by crossing out the amount the buyer has entered on the agreement, writing the amount you want and initialling the change, then signing the agreement and returning it to the buyer for his or her signature and initials.
The offer and counter-offer process can be repeated until either both parties agree to the terms of the sale, or both parties end negotiations.
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What should be in a sale and purchase agreement? Are there forms I can use?
The sale and purchase agreement sets out the agreed terms of conditions of the house sale, such as the date of the agreement, the name of the buyer, and the purchase price. You'll find a summary of the standard clauses on the Real Estate Authority website.
The Auckland District Law Society produces a standard sale and purchase form which you can buy from their website. Alternatively you can ask your lawyer to draw one up for you.
You may want to add an ‘escape’ clause, which allows you to keep the house on the market while the buyer sorts out the conditions of purchase (e.g. arranging finance, getting a builder’s report). If you receive another offer during this time, the clause gives the buyer a set number of days in which to go unconditional, and if they don’t you would be free to take up the other buyer’s offer instead.