Anyone selling a property wants the best price the market will deliver and buyers want the reassurance that the sale price is appropriate.
This is why most people use a licensed real estate agent when buying and selling. Agents are trained to arrive at a market sale price for a successful transaction.
Achieving the best market price is not easy without expert assistance. Private sellers, for example, tend to over-estimate selling prices and most private sales fail without significant price adjustments.
This can result in a final sale price that is actually less than the price which was achievable had the property been marketed correctly.
While sellers want to receive the highest price, buyers are keen to pay the least amount and this creates an understandable conflict between the two that an agent will negotiate to the point of agreement. It can be very hard for a private seller to play this role without an intermediary, keeping in mind that selling price is not the only area of conflict between sellers and buyers.
A real estate transaction can be a legal minefield and this is why state laws require licensed real estate agents to comply fully with the agent’s contractual obligations to the owner of the property.
Agents also have a legal obligation to represent a property correctly and fairly to a buyer.
This legal framework is important because real estate transactions are open to challenges unless proper process is followed.
Take for example the sale of strata title properties which account for a quarter of all property sales. Every time a strata property is sold the buyer must be provided with a package of general and specific information related to that and failure to comply with this risks heavy penalties and may invalidate a contract.
The process of buying and selling strata title properties, in particular, can be so complicated that REIWA has developed specific training courses with detailed checklists for its members.
Another area of potential buyer-seller conflict is information about services and rights of access on properties, including sewers, drains and reservations by public utilities.
If you are a buyer you should know about these matters. If you are the owner there is a responsibility to convey such information, but with private sales these matters are often overlooked and can result in legal dispute.
These and other influences on real estate transactions are covered in the standard legal documents accessible by agents.
If a problem occurs a seller or buyer can seek assistance from REIWA and the state government. However, if you are involved in a private sale and something goes wrong the best you can do is meet in court which can be expensive and time consuming.
This article was originally published on reiwa.com.