THE SALE IS ON
Many homes sell quickly
without a hitch while others seem to attract more than their share of
One of the most difficult
situations for vendors to deal with the Loss of their purchaser. By
the time vendors realise their sale is not proceeding they will have
already spent money with their solicitor and in many cases soil have
undertaken the purchase of another property with its associated costs
– loan applications, pest and building reports and so on.
It is rarely just “bad
luck” when a sale fall through. A professional and experienced
agent will handle the marketing and negotiations in such a way as to
minimise the risk factors.. Less professional agents are not so
careful or diligent.
A good real estate agent
should make sure a vendor is totally informed about a purchasers
Many agents ask for offers
from people who are not in a position to proceed – for example they
have not yet sold their own home, or they haven’t had their finance
approved. If the home the purchase is dependent upon doesn’t sell,
or the finance doesn’t eventuate, purchasers inevitably get cold feet
as the exchange date gets nearer. A common misconception is that an
agent using “hard sell” techniques soil get the sale through
“Hard sell” is a short
term fix which sometimes works to achieve on the spot commitment.
Purchases who are sick of hunting for their dream home are vulnerable
to pressure and sometimes end up making an offer on a house they’re
not 100% sold on. On the whole though, reluctant purchases pull out
when they’ve had time to reflect.”
More professional agents have
both the ethics and the expertise so that vendor’s don’t end up
on a wild goose chase with unqualified purchasers.
If you’re not confident your
agent is telling you everything you need to know, make sure you ask
for feedback after every inspection. Once someone is ready to make an
offer, you need to know whether they are in a position to put their
money where their mouth is.
POSTED ON 28/08/2017
THE PROPERTY SELLER’S CATCH 22
It is common practice to
inflate the projected selling price of a property by a small
percentage to allow for purchasers to negotiate. It also allows for
fluctuation in the market created by temporary surges in purchase
numbers. Unprecedented levels of competition at the time of releasing
the property onto the market sometimes result in a property selling
for the asking price.
Properties in a highly sought
alter category or in locations where there is a shortage of property
for sale usually have more room to inflate their asking prices.
However for most properties careful consideration should be given to
the amount of negotiating factor. If a property is more inflated than
other similar properties on the market, the listing agent will have
to “puff” the ad to attract purchasers to the property.
Over pricing is just the first
in a series of events that causes the property to become stale on the
It’s a Catch 22 situation, If
the ad is not as “puffed” as the price, the property will not
attract Inspections. On the other hand if the ad exaggerates the
property’s charms, purchasers will be disappointed when the reality
doesn’t match their expectation and the property will not sell.
In fact serious over pricing
targets entirely the wrong market and gives any interested party a
Purchasers feel they have
plenty a time to make up their mind because they know that the price
is putting most people off. Properties that stay on the market for a
long time at too high a figure often fail to attract offers.
Ironically, this very strategy which the less market aware vendor
uses to maximise the selling price ultimately lowers it.
The right negotiating factor
should make purchasers feel the need to get in before someone else
Astute pricing is crucial to
generating the kind of excitement and competition that will ensure
the house sells in the shortest possible time for the highest
POSTED ON 24/08/2017
CHOOSING AN AGENT – WHAT DO THE LOCALS SAY?
Many vendors say they find it hard to decide which agent to use to sell
their home. Choosing an agent is not very different from choosing a doctor
or any other service provider. If you were new to the area
and were looking for an accountant or a plumber, you would ask
local residents to make recommendations based on their
experiences. The best source of first-hand information
about local agents is someone who has recently bought or sold
a house in your local area.
If you don’t know anyone who
has recently bought or sold, searching the internet as well for
testimonials and references or reviews on local agents & agencies
is also a good way to assist you. Websites like Rate My Agent” are
ideal to get independent reviews from agents past clients.
The obvious question on every
prospective vendor’s lips is whether the agent in question sold the
house for the best price in a reasonable time. But research shows
that an issue seldom raised at the start of marketing becomes the
main cause for concern when things go wrong: lack of feedback.
One of the key question
vendors should ask their sources is whether their agent stayed in
constant communication and provided regular feedback at every stage
of the marketing process. Knowing what is going on every step of the
way reduces vendor stress and contributes to the successful sale of
the property. It can help the property sell faster and for a higher price.
Said that if your checks reveal that an agent has a first class reputation
in terms of service, feedback and results there is no need to look any further.
Above all, vendors should take their time when selecting an agent and
not let themselves be put on the spot by pressure selling techniques
designed to get them to sign up now!
After all, for 97% of local home owners, their family home represents their
single greatest asset and as such their most significant financial transaction.
Everyone has heard the three
most important criteria for choosing a house to buy “Location!
Location! And Location!” and choosing an agent can be summed up in
a similar way – “Reputation! Reputation! And Reputation!”
POSTED ON 12/08/2017
Exploding The Myth That Auctions Always Bring The Best Price
Auctioning a property to achieve the best possible
price is a long held myth that does not hold up against reality.
Whenever you have the fortunate situation of more
than one buyer trying to buy your home, the worst thing the agent could do is
disclose the competing offers to each of the interested buyers – which is
exactly what happens at a public auction.
In such circumstances, the respective buyers focus
becomes outbidding the competing buyers by $1,000, as opposed to offering their
highest price for the property. When you are selling your home, you want the
eventual buyer to have paid their maximum price for it.
To win an auction, the buyer does not need to pay
their maximum price, they just need to be the highest bidder. Selling to the
highest bidder as opposed to the buyer whom offers the highest price is why
auctions fail to achieve the best price for home sellers.
If one buyer is prepared to pay $1.1 million to buy
your home and the under bidder is only prepared to pay $1 million, it is
mathematically impossible that a public auction will attain the best price.
Home sellers are often told that the auction
deadline pressures the buyers. As the auction deadline draws closer, the
pressure is often transferred onto the seller to come down in price. Agents
call it “meeting the market”. The pressure is increased on the seller to come
down should the auction fail to reach the reserve price.
It damages the price of your home if the property
is passed in to a bargain hunter on auction day. Any chance of a high price is
destroyed when your home passes in for a low price at the auction, in front of
a big crowd.
Buyers will wonder what is wrong with your home
when it fails at auction. The home is often not the problem though. The selling
process failed the owner.
Further evidence that auctions don’t get the best
price can be found in observing properties that have passed in. It is extremely
common for a property to be passed in at auction and then sell for a higher
price after the auction during a negotiated process. If auctions really did get
the best price, it would be common for owners who decided against selling on
auction day to sell for a lower price in the subsequent marketing period.
Many countries only use public auction as a last
ditch means to unload a property with disregard for the price. In such
circumstances, the bank has foreclosed and it is merely interested in a sale to
reclaim monies owed with little interest in achieving the best possible market
price for the property.
Properties With No Asking Price Deter Buyers
Properties marketed with no fixed asking price are
negatively affecting the pool of potential buyers, according to a poll by
Three quarters of respondents (75 per cent) were
“greatly deterred” by properties which didn’t reveal a fixed asking price and
often overlooked those properties during the search for a new home.
The survey found 20 per cent were “slightly
deterred” by a property without a selling price, while only 2.5 per cent were
“definitely not deterred”. The remaining respondents (2.5 per cent) admitted
they were “unsure”.
The poll, which was conducted during the entire
month of March, attracted 450 respondents from across Australia.
PRDnationwide research director Aaron Maskrey said
some agents and sellers listed properties without a selling price – which, the
results suggest, could usefully be avoided. “Ultimately you could be missing
out on potential purchasers by not advertising a selling price,” he said. “Typically
sales activity across the market is still well below the longer term average
and every effort should be made to be ‘seen’ by the most number of house
hunters,” he said.
“According to the poll, stating a sale price
ensures every opportunity to maximise viewings and competition.”
Mr Maskrey said there were several alternatives to
fixed price marketing, including price on application and buyer feedback
ranging, which both avoid fixed prices.
Real Estate Business.
Choosing The Real Estate Agency That Responds To ‘Hot’ Callers
Most homes for sale are easy to spot because they have a ‘For Sale’ sign out the front. This is because – even in the days of Internet in their pockets – prospective home sellers often like to drive around an area to get a feel for it as part of preparing themselves to buy. Some are specifically looking for streets or houses in which they would like to live. It is usual for the sign to have a phone number so prospective buyers can call and get information about the property. But this is only useful if the agent is ready to strike while the purchaser is hot.
If you are thinking of selecting an agent, try ringing a phone number from a signboard as if you were about to organize an inspection. Signs are great at generating such phone calls, and while many of these calls never result in a ‘sold’ sign it is worth being sure that the agent you are about to choose can respond to an eager caller wanting to look at the property ‘now’. While no agent can be expected to drop tools and come and show the property on the spot every time, it is worth knowing how your potential buyers will be treated when they make the call; does a live person answer the phone or does the call go to a voicemail or recorder?
It is important that someone answers the phone while the caller is “hot”, especially if they are ringing from outside the house. Many buyers are put off a property altogether if their enthusiasm turns to frustration when they are faced with ‘on hold’ messages and prompts to press numbers.
The Trusted Advisor – Help Or Hindrance, Competent Or Not?
Whenever you embark on a real estate transaction,
it is likely you will inherit advisors.
Whether you are buying or selling, many people will
offer their advice unsolicited. Some of this unsolicited advice will be sound,
some will be well meaning and some may be completely ignorant of the facts.
Buying or selling real estate is usually the
largest transaction that many will ever make. The misinformation and vested
interest that is pumped into the marketplace makes it even trickier to tread a
safe path. A real estate angel helping you through the process offering
guidance and grounded advice is an enormous benefit.
Identifying the right people to guide you is the
key though. It is quality advisors not a quantity of advisors that will ensure
you successfully transact. One thing is for certain, you need to put advisors
into two categories quickly, lest you turn your thinking inside out or upside
down. Are the advisors that pass on their real estate wisdom well meaning or
are they competent professionals? Well meaning advisors will offer advice but are
not paid to do so. Furthermore, they often don’t have to live with the
consequences of their advice.
The well meaning advisor can be a friend at work
who “bought a bargain last year” or neighbour that says “you’d be crazy to sell at that price”. It is easy for a
well meaning advisor to say “reject the offer, it’s too low”. It is easy for
them to say this because they are not the ones that could potentially sell for
less down the track. The well meaning advisor won’t be found for love nor money
if they tell you to reject an offer that ultimately proves to be the best offer. To enlist someone as an unpaid trusted advisor,
you need to look for a track record of success from this person, not a
fortunate one off transaction in the past.
For one swallow does not make a spring. An unpaid
well meaning advisor is either an asset or a liability, dependent purely on
their experience and competence.
The more advisors you inherit, the more likely they
are to conflict each other and confuse your decision making process. Competent
professionals whom are emotionally detached from the outcome are your greatest
ally when transacting real estate.
Whilst you can feel way out of your depth talking a
different language to everyone else, professionals are the voice of reason. The
competent professional has seen it all before. They won’t necessarily tell you
what you must do in every circumstance. The best professionals will often point
out issues, details or points of consideration that you may not have thought of. Through experience, competent professionals open your eyes
and ears where naivety could have easily ruled the day.
These people include solicitors (use a real estate
solicitor), family friends with a track record of success, parents, building
inspectors, independent valuers (not one from the bank), accountants or
financial advisors. Each of these people, if chosen correctly, will be devoid of emotion. Emotion is what so often rules the real
estate transaction, sometimes causing people to regret their decisions in the
cold light of day.
Is the trusted advisor independent? A neighbour whom thinks you should reject the offer seems independent. But on closer inspection, their
independence is questioned when it becomes apparent they want your apartment to
be worth more, so that theirs is also. After all they say, “the bank valued
ours for more, and they are always conservative”.
Real estate agents can be a wonderful source of
knowledge. But if they are the agent handling the sale, only in the rarest of
situations should they moonlight as your trusted advisor. Your trusted advisor
reserves the right to encourage you to act, but more importantly the right to
encourage you to pull back. This second point is in conflict with the agent’s
main motive of achieving a sale.
By all means, elicit and absorb all the advice the
agent has to offer. But reflect on it in your own time independently of the
agent and the persuasiveness they bring to an issue. If your partner has strong or differing views to you, listen to their perspective
prior to the decision being made. It is no good working out they were correct
after the fact.
Working with your advisor:
When you want your advisors advice, ask for it. But don’t tell the advisor what
you think upfront and ask them to shoot your thinking down. The advisor is not
there to debate against your emotion. If you have been sold on a persuasive
argument by a salesperson or a speaker (spruiker) at a seminar, pass the pitch
onto your advisor and ask for their thoughts – totally independent of any you
Keep in mind that your advisor is not involved to
tell you what you want to hear. They are there to tell you what you need to
hear. The more you push your thought pattern onto the advisor, the less you
hear their reasoning. After discussions, you may go against what your trusted
advisor suggests, but you do so with knowledge of the downside not just the
Often salespeople and spruikers are very good at
focusing their pitch on the upside. In the 80s when Donald Trump was flying
high, he would always ask himself “what is the worst that can happen in
this transaction?” before committing to a deal. When things went bad for Trump
in the 90s, by his own admission, it was because he failed to take his own
Rarely is a decision slanted 100% one-way and 0%
the other. There are often risks and considerations regardless of what
direction you decide upon. The trusted advisor is truly an asset to you, if
they can put you in a position to act with all of the unemotional facts before
Source: Harris Partners Property News.
The Price is Right
Have you ever wondered why some families and buyers are confidently choosing to upgrade their homes in the current market? Even though it is down!
Did you know the slowdown in the property market is in fact financially advantageous for homeowners and property investors who want to upgrade their homes or buy investments properties?
Everyone knows that properties are drastically cheaper today than they were just a few years ago. Because of this, today’s property owners have the opportunity to trade up to a larger and a better quality home at a more affordable change over price than they could in the past.
The fall in prices provides these property owners who wish to upgrade an excellent opportunity to trade up to a better home with a smaller changeover cost. The gap in price difference between a more expensive home and a cheaper one is much smaller today than it was two, three or four years ago. We are also currently experiencing increased demand for lower priced houses and this provides a great opportunity to pay an even smaller changeover cost.
With the market currently bouncing around what I believe is to be the bottom of the property cycle, an increasing number of homeowners are realising that this is the best possible environment to upgrade their existing home to one that might have been out of reach a few years ago.
Undoubtedly when market prices are down people who understand this concept and upgrade their homes are the real Winners. When the market turns – and it has too sooner or later – property owners who have made the move and bought bigger and better quality homes in better locations will not only enjoy an immediate improved lifestyle but will also benefit from the increase in capital growth that will inevitably follow.
‘Inside Secrets’ Of Real Estate
by Peter Lees
Open homes, auctions and vendor paid advertising, are a great benefit to real estate agents but of very little benefit to home sellers and buyers. These add on’s are part of the up-selling technique, a little like the ‘do you want fries with that?” of the real estate industry.
Take for example, Vendor Paid Advertising. Vendor Paid Advertising is worth millions of dollars to the real estate industry. A look at the profit and loss statement of some real estate companies would show that ‘advertising’ appears as an income item not (as most consumers would believe) as an ‘expense’ item.
When I first started in real estate, the concept of an owner paying the cost of advertising and still paying a commission was to say the least, highly unusual. Industry trainers however, discovered that if you could convince a seller to go to auction and also convince them that open homes were somehow needed, that maybe you could make an argument that advertising was needed and then – who was to pay?
It is interesting to look back on those days. When agents were paying for newspaper advertising, ads were only a single column and photographs were rare. Now that sellers are paying, ads are HUGE. Do a larger percentage of these houses get sold? Of course not!
More and more sellers are waking up to the reality that newspaper advertising is unnecessary. I wonder if we will see many companies closing down that have become reliant on the income for selling advertising rather than their income for selling houses?
And who needs to advertise in the newspaper when 9 out of 10 buyers use the internet to search for a property to buy?*
Take this as a prediction: A home owner paying for advertising in the newspaper and also paying a commission will cease to be common practice in the very near future.
* Australian Property Report, Nielson Online, 2008