Sometimes you have to sell a property.
Maybe you bought a dud property, or it could be that your life circumstances have changed and you now have to sell a property.
Sometimes you can’t choose the timing, the circumstances or the market when you sell.
So what do you do?
In this week’s Real Estate Talk show I asked real estate guru John McGrath for his suggestions of what you should do if you’re going to sell in a flat or an oversupplied market?
Here’s a transcript of the interview:
Kevin: Thank you very much for your time, John. No doubt in your career, you’ve seen this happen from time to time?
John: It can happen quite a bit.
This happens when people are forced to sell by personal circumstances, which can be anything from tragedy to divorce to financial issues, and as you’ve just mentioned in the introduction, you don’t always get the luxury of choosing the right time to sell your property.
Kevin: So what can someone who is in that position do to make the most of a bad situation?
John: Kevin, I think what you have to do is follow the formula that you would follow at any time, but there is less room for error because, obviously, if you’re in a critical or a dire situation, you probably need to liquidate your property quickly.
The first thing I always say to people is the one thing that sells or doesn’t sell property is price.
That sounds obvious, but still people go to market often with an inflated view on their property’s value.
They don’t really do any objective research.
They’ll call in three or four agents, they’ll talk to a couple of neighbors, and they’ll just pick a figure that’s the highest figure they’ve heard.
That’s not the right way to go to market, especially if you’re forced to sell and you need to sell quickly.
Price is critical. Try to be objective.
Consider either getting a valuation, getting a few agents in, but don’t just go for the agent who gives you the highest price because unfortunately, there are agents who either get it wrong or they actually have a strategy of telling vendors high prices to get the property listed.
That might work for them because eventually they’ll probably get a sale, but if you’re there for a quick sale, you need to be very realistic on price.
Kevin: A valuation is an excellent suggestion. Do you think you should tell the valuer the situation, or wouldn’t that make any difference?
John: I don’t think it’s critical, Kevin. I just think a valuer is objective.
They don’t have any commitment to the sale. They’re not going to get the sale. They’re not going to buy the property. They aren’t competing for it.
They’re just going to give you an objective valuation, and if there’s a good, local valuer with good, local knowledge, I think that’s a really good starting point because it takes the emotion out.
Even with agents who don’t have a strategy to over-value your property, they sometimes get excited.
They look at all the good points of a property and they’re there talking to you, wanting the business.
That often leads to the disaster situation where they go in and tell you a price that’s actually achievable.
The key thing is the first 30 days is when you get the best price almost every time, so if you don’t price it to sell it in the first 30 days, not only do you miss a sale; you are you going to discount the property down the track to get a sale.
Kevin: Of course we’re talking about a listed price or an expectation in the event of going to auction. Is an auction the way to go in this scenario?
John: I think an auction is effective for most properties in most markets.
It seems to be a rapidly preferred way of selling in most parts of Australia nowadays.
It gives the market the signal that you’re serious.
It says there’s going to be a decision made on a date in the next few weeks, and that does bring people to the party.
Especially if you do have either a unique property that’s hard to value or if you do need a timely sale in the next few weeks, an auction is often a good way to go.
Kevin: How do you make the property stand out?
We’ve seen you’ve been on a number of television shows where the presentation of the property is very, very important, but in a scenario like this, you might not have the money to do professional staging.
What are some of your thoughts on that area, John?
John: A couple of things, Kevin.
I think presentation goes beyond a bit of paint and fluffy cushions.
I think you have to start with working out are there any issues with your property that may put buyers off, whatever they could be?
You might have a timber home. It might have some old termite infestation. The first thing I’d do would be get a pest company back to give it a clean bill of health because you don’t want to put any buyers off.
You could have some issues with regard to the structure of the property.
Again, get a builder in to give you a clean bill of health or at least a quote as to how to shore the property up.
You have to think about what are the things that are going to concern people and how can I make them better?
Then you go to presentation.
If you’re going to sell a car this weekend, you’d go and have it detailed. Do the same to your house.
Either you can do it yourself if you have the time and ability or get someone in to give it a thorough detailing. Get a gardener in.
Again, these things might cost you a little bit of money but they’ll probably make you a lot more money than they’ll cost you.
Most people have the ability to tidy up the garden.
Do a spring clean. Present your property properly.
If there are any issues within the decoration of the home, if there is any mold somewhere, get in, get it washed off, get the wall repainted.
Most of the decorative tips that I give people are either things that you can do yourself or things that can be done by a handyman at low cost.
I’m not talking about any major renovation, but make the home look as good as you can.
Kevin: John, great advice. It’s always good talking to you. Thank you very much for your time.
John: Pleasure, Kevin.
Listen to the full show at RealEstateTalk.com.au and while you’re there subscribe and receive our weekly podcast (or the transcripts) where I interview Australia’s leading property experts.