Unrealistic timelines can cause frustration and financial strain.
Contract for Sales - Seller’s Most Asked Questions #16: How long will it take to sell my property?
Introduction
Understanding how long it will take to sell your property is a crucial question for every property seller in New South Wales (NSW), Australia. This question carries significant weight due to the various market dynamics, legal processes, and personal circumstances involved in selling property. For sellers in NSW, several key factors influence the time required to complete a property sale, ranging from market conditions and pricing strategies to the legal aspects specific to NSW property law.
Key Factors Affecting Property Sale Timeframes in NSW
Several factors can affect how long it takes to sell a property in NSW. These include market conditions, the property’s location, the chosen pricing strategy, presentation, and legal and regulatory considerations specific to NSW.
1. Market Conditions
Market conditions are a critical determinant of the time it takes to sell a property. In a seller's market, characterized by high demand and low supply, properties typically sell more quickly—often within weeks. In contrast, in a buyer's market, where there is more supply than demand, properties can remain unsold for several months. As per the Domain House Price Report for September 2023, the median time on the market for properties in Sydney is approximately 32 days. This figure can fluctuate significantly depending on economic trends and specific regional variations.
2. Property Location
Location plays a vital role in determining how quickly a property sells. Properties situated in high-demand areas, such as Sydney's Inner West or Northern Beaches, generally sell faster than those in less desirable or rural areas. According to the Real Estate Institute of New South Wales (REINSW), properties in metropolitan areas average around 27 days to sell, while properties in regional areas often take upwards of 90 days.
3. Pricing Strategy
Pricing is one of the most critical factors affecting the sale time of a property. Overpricing a property can lead to it languishing on the market, potentially driving down the final sale price. CoreLogic's 2022 study found that properties priced within 5% of their market value are twice as likely to sell within 30 days compared to those priced above market expectations. Sellers need to balance between setting an attractive price to draw in potential buyers while maximizing their returns.
4. Property Presentation
Presentation is another key factor that affects the time it takes to sell a property. This includes the property's cleanliness, staging, and overall curb appeal. According to a 2021 report by the Real Estate Staging Association (RESA), staged homes sell 73% faster than non-staged homes. In NSW, many sellers invest in professional staging services to enhance their property's appeal and reduce the time it stays on the market.
5. Legal and Regulatory Considerations
Legal and regulatory requirements also impact the time it takes to sell a property in NSW. For example, before a property can be marketed, it is mandatory to prepare a Contract for Sale, which must be drafted by a solicitor or licensed conveyancer. The contract must include several documents, such as a zoning certificate, a drainage diagram, and a property title search. Any delays in obtaining these documents can prolong the sale timeline.
Behaviour of the Participants
The behaviour of the participants involved in a property transaction can significantly affect the outcome. In the case of Smith v. Brown (2019) NSWDC 874, a high degree of emotional tension and desperation among the sellers dramatically altered the process and timeline of the sale.
The sellers, a couple facing imminent financial ruin due to escalating debts, were under intense pressure to sell their property quickly. They initially listed the property well above market value, believing this would provide them with the funds needed to settle their debts. However, when the property did not attract offers, their anxiety increased. Their behaviour became increasingly erratic; they switched real estate agents multiple times, slashed the asking price haphazardly, and began directly negotiating with potential buyers without professional representation. This erratic behaviour led to confusion among prospective buyers and significantly delayed the sale.
The emotional strain was palpable throughout the process. The sellers' financial desperation resulted in impulsive decisions, such as accepting an offer verbally without proper legal procedures, which further complicated matters. Their actions caused significant delays in the sale process, attracted low-ball offers from opportunistic buyers, and ultimately led to a protracted and costly court battle.
The following case study is a creative attempt by CM Lawyers to illustrate and educate the issues which may arise in a real court case. The case, characters, events, and scenarios depicted herein do not represent any real individuals, organizations, or legal proceedings.
Case Study: Smith v. Brown (2019) NSWDC 874
Background
In Smith v. Brown (2019) NSWDC 874, the plaintiffs, Mr. and Mrs. Smith, owned a residential property in Sydney. Facing severe financial hardship due to mounting debts, they urgently needed to sell their home. They initially listed the property at $2.2 million, although the estimated market value was closer to $1.7 million. Their hope was that a high starting price would allow room for negotiation while covering their debt obligations.
Behaviour of the Participants
Under substantial financial stress, the Smiths exhibited erratic and emotionally driven behaviour throughout the sales process. They changed real estate agents three times in four months, believing that a new agent would bring a fresh approach and quicker results. Their desperation led them to make several unwise decisions, including negotiating directly with potential buyers without their agent or legal counsel, which led to confusion over the terms of sale and further delays.
Their growing desperation was evident in their erratic decision-making, from repeatedly lowering the asking price to entertaining offers far below market value. This behaviour not only delayed the sale but also diminished their negotiating power. Prospective buyers sensed their desperation and made offers well below the property's market value, contributing to the extended time on the market and eventual legal complications.
Legal Process and Court Involvement
The legal issues arose when the Smiths verbally accepted an offer from a prospective buyer, Mr. Brown, without proper documentation or legal oversight. Believing a better offer was forthcoming, they attempted to retract the agreement, leading Mr. Brown to file a lawsuit for breach of contract. He claimed a binding verbal agreement had been established based on their communications and actions.
The case was brought before the NSW District Court, where the court found in favour of Mr. Brown, ruling that a verbal agreement had indeed been formed. The Smiths were compelled to honour the sale at the original, lower price and pay Mr. Brown’s legal costs, which amounted to $65,000.
Financial Consequences
The court's decision had significant financial implications for the Smiths. They were required to sell their property at a much lower price than initially anticipated, resulting in a final sale price of $1.5 million—well below both their asking price and the market value. Additionally, they were ordered to cover Mr. Brown’s legal fees, further exacerbating their financial difficulties.
To settle their debts and legal costs, the Smiths were forced to liquidate other assets, including an investment property and several shares. This further diminished their financial standing, underscoring the importance of proper legal guidance and realistic market pricing.
Financial Consequences
The case of Smith v. Brown (2019) serves as a cautionary tale about the dangers of letting desperation dictate property sales decisions. Not only did the Smiths sell their property for far less than its value, but they also faced significant legal costs and the loss of additional assets. The experience highlighted the critical importance of engaging qualified professionals, such as real estate agents and solicitors, and avoiding emotionally driven decisions.
Real Stats
- 32 days - Median time on the market for properties in Sydney as of September 2023 (Source: Domain House Price Report).
- 27 days - Average time to sell properties in metropolitan areas of NSW (Source: REINSW).
- 90 days - Average time to sell properties in regional areas of NSW (Source: REINSW).
- 2x more likely - Properties priced within 5% of market value are twice as likely to sell within 30 days (Source: CoreLogic, 2022).
- 73% faster - Staged homes sell 73% faster than non-staged homes (Source: Real Estate Staging Association, 2021).
- 5 business days - Standard cooling-off period for property sales in NSW (Source: NSW Government Fair Trading).
- 4-6 weeks - Typical settlement period for property sales in NSW (Source: NSW Government Fair Trading).
- $65,000 - Legal costs incurred by the Smiths in Smith v. Brown (2019) NSWDC 874 (Source: Case Study).
- $1.5 million - Final sale price of the property in Smith v. Brown (2019) NSWDC 874 (Source: Case Study).
- $2.2 million vs. $1.7 million - Initial asking price vs. estimated market value in Smith v. Brown (2019) NSWDC 874 (Source: Case Study).
References
Government Resources
- NSW Government – Fair Trading: Property Sale Process
https://www.fairtrading.nsw.gov.au/housing-and-property/buying-and-selling-property/selling-property - NSW Government – Conveyancing and Property Law
https://www.lawsociety.com.au/practising-law-in-NSW/conveyancing - NSW Supreme Court – Probate
https://www.supremecourt.justice.nsw.gov.au/Pages/sco2_probate/probate.aspx - NSW Government – Property Reports
https://www.service.nsw.gov.au/services/property - CoreLogic – Market Trends
https://www.corelogic.com.au/reports/market-trends
Non-Profit Organisations
- Justice Connect – Legal Help for Property Sellers
https://justiceconnect.org.au/resources/selling-property - The Law Society of New South Wales – Property Law Resources
https://www.lawsociety.com.au/legal-help/buying-and-selling-property - Shelter NSW – Housing Market Information
https://shelternsw.org.au/research-and-policy/housing-market - Consumer Advocacy Centre – Real Estate Advice
https://www.consumeradvocacycentre.org.au/real-estate-advice - Real Estate Staging Association – Property Selling Tips
https://www.realestatestagingassociation.com.au/selling-tips
