a property is a process that can become difficult. It is also a process where
people can make mistakes, sell too cheaply and be taken for a ride by unscrupulous
people and real estate agents.
is very important to do this properly and seek advice from experienced professional
people to ensure that you are satisfied with the result.
information is produced by the Real Estate Industry Association Inc to assist
people PLAN the sale of their property prior to commencing.
· LOCATE A PURCHASER
you have a purchaser already identified who would like to purchase your property
then you have made a good start. If you have not yet found a purchaser and you
would like to find one then you can obtain the assistance of a real estate agent.
You can ask any real estate agent to help you however we would recommend that
you use a member of the Real Estate Industry Association because he has pledged
to abide by the Code of Ethics of the Association. A copy of the Code of Ethics
is available on request from any member's office. Once you have selected a real
estate agent he will assisit you with marketing your property. There are several
ways of marketing a property. Your real estate agent will advise you on the best
method for your specific circumstances. You can use more than one agent if you
CHECK THE VALUE
sure that the asking price for your property is reasonable. If you are using a
real estate agent ask him if the price is reasonable. If you are unsure if the
asking price is reasonable then request a valuation of the property to be done
by a registered valuer. Your real estate agent can arrange this for you. A valuer
will charge a fee for doing a valuation but you will receive a certificate which
will show how much the valuer believes the market value of the property is. If
the valuation shows that the asking price is fair then you can proceed. If it
doesn't then you should reconsider your asking price. The real estate agent can
help you here.
you have a purchaser you must engage a lawyer to act for you and look after your
interests. Your lawyer will prepare the Contract for Sale. You will be required
to pay your lawyer's fee. Your lawyer will be able to give you a quote for his
fees before he starts to act for you. Ask for your quote in writing.
· SOLE AGENCY
real estate agents will require you to fill in a form giving them permission to
sell your property. Sometimes this is an agreement giving the real estate agent
SOLE RIGHTS to market your property for an agreed period of time. If you do agree
to this then you cannot use another agent. You do not have to give sole agency
to any specific agent. If you want to use more than one agent then do not sign
a sole agency agreement. Request a multi agency agreement.
· FEES / COMMISSIONS
agency agreement should specify the fees that the agent will charge. The standard
base fee in PNG is
% on the first K100,000
3.5 % on the next K100,000
3 % on the next K100,000
2.5 % on the balance.
your agent is GST registered then you may be required to pay GST on the fee. You
can negotiate a higher or lesser fee than the one above if you and the agent agree.
· PLACE A DEPOSIT
purchaser will be required to lodge a deposit on the purchase with the real estate
agent or the lawyer acting for you. The deposit is usually 10% of the purchase
the improvements located on properties are subject to GST. You should check if
the property that you wish to sell is subject to GST before you commence marketing
your property. You may be required to collect the GST and pay it to the IRC.
may be required to pay for advertising or other costs. You should have your agent
specify these in the agency agreement.
where there is a sole agency agreement in place real estate agents will work together
to sell a property. This is called conjuncting on a sale. If this is the case
then you are not required to pay the other agent. It is up to the agent with whom
you have the sole agency agreement to pay the conjuncting agent.
an agent will advise selling a property by auction. This is a very simple system
for marketing a property. The costs and fees for selling a property by auction
are usually the same as for a standard sale.
lawyer will arrange the settlement of the sale of your property.
If you have any further queries please contact a Real
Estate Industry Association Member or your lawyer.