It’s a fascinating time to be in real estate.
After 5 or so booming years the market has moved to the next stage of the proeprty cycle, and in many parts of Australia we’ve moved from a seller’s market to a buyer’s market.
And with interest rates set to remain enticingly low, meaning a greater number of punters will see mortgages as a manageable prospect, making home ownership more appealing.
If your’e thinking of selling your home here are 7 key considerations that could make all the difference when it comes to achieving top dollar for your property at sale time.
1. Appointing an agent
Choosing an agent can be a daunting prospect.
After all, you have to work closely with them throughout the campaign and so good communication is essential.
A great way to narrow your list of prospective real estate agents down to the one you eventually appoint is to attend a number of inspections and auctions before you put your own house up for sale.
This way you can see the type of approach they have to potential buyers and how they ‘sell’ their listings.
Once you narrow the field, reduce it down further by selecting say, three candidates and interviewing each.
Ask questions about their fees and charges, as well as how they manage various aspects of the sales campaign, only signing any type of authority on your property when you feel certain that they’re the best person for the job.
2. The costs
Selling property is not a cheap proposition and depending on the value of your home, can cost tens of thousands in agent’s fees and marketing expenses.
Advertising costs can be anywhere from $2,000 to $20,000, according to the type of property and necessary level of ‘glitz’ required from the campaign to produce an acceptable sales price.
Beware of agencies that ask for any upfront payment, with commission generally charged only once the sale becomes unconditional and settles.
The agent’s commission is usually between 2.0 to 2.5% of the final contract price, but this is something you’ll need to negotiate with them directly.
Just don’t be too tight when it comes to rewarding your real state agent for their efforts.
They’re more likely to give up weekends to open your home for inspection and take people on late night viewings if you’re offering a reasonable rate of reimbursement.
You can also add a little extra incentive when working out the commission structure.
For instance, if the agent estimates a sales price of $500,000 for your property, you might offer them a 2.5% commission up to that figure, and then an additional 5% for anything it fetches over and above that amount.
This could make them work that little bit harder for a potentially bigger reward.
Remember…the cheapest agent is the one who gets you the best price for your property.
3. Campaign preparation
A campaign usually kicks off about ten days after you sign an exclusive and/or auction authority with your chosen agent.
At this stage, you’ll need to appoint a solicitor to handle the legal aspects of your property sale, such as title transfers and payment adjustments.
Meanwhile, your agent should be arranging:
- photographs of the premises,
- online listings through all the big property portals
- print ads as agreed in your marketing campaign
- erection of a ‘For Sale’ board
Now is a good time to get any odd jobs done that you may have been putting off.
Make sure your home is presented in tiptop shape and if you’re not sure about something, ask your agent.
You might need to freshen things up with a lick of paint here, or a new light fitting there and give your gardens a good going over to maximise your property’s curb appeal.
4. The launch
This is where it gets exciting and a little nerve wracking too, because it’s suddenly all very real and your property is officially ‘on the market’.
Auction campaigns typically last for a month or so, with saturation type marketing and OFI’s occurring throughout the entire period.
The key is to kick off with a bang and be noticed immediately.
Go loud or go home, as they say!
Private treaty campaigns often commence with a lot of noise as well, but then tend to become more slow and steady, with some houses remaining on the market for up to two to three months, or longer.
5. The early days
Agents like to see a lot of action around new listings in the first one to two weeks.
They’ll attempt to generate hype and interest in your property at the outset, but don’t be alarmed when the hoards start to dwindle into a few inspections here or there.
Your agent should communicate with you regularly about the level of interest your property is generating in the market, and whether they believe any changes are required to the campaign, including the advertised price range.
6. The second half of the campaign
Things are in full swing now and agents should be using the latter part of your campaign to get a better handle on any genuine prospects.
This is a critical period for auction sales in particular, when agents will speak with and qualify potential bidders to formulate an idea around who might eventually be the new owner of your home.
At this time you should be talking to your agent to firm up a reserve price if your property’s going under the hammer.
Remember, setting a reserve should be based on the market, not your own personal expectations or needs.
7. The auction
While auctions undoubtedly arouse nerves in wannabe buyers vying for ownership of your property, there’s little doubt that the person feeling the most pressure is you – the vendor.
After all, buyers can walk away and find another home, but for the seller your entire future direction hinges on the outcome of this one day.
Your agent will erect auction flags and boards around the neighbourhood, alerting people to the event, and should have a good list of genuinely interested parties who plan to put a bid in.
There’ll be another inspection just before the auction, before proceedings kick off with the auctioneer asking for an opening bid.
During the inspection your agent must make sure formal documentation relevant to the proceedings, including the Section 32 or Vendor’s Statement in Victoria, is available for viewing
The agent might kick up the pace of a slower auction where people are reluctant to bid by using their discretionary vendor’s bid.
As things proceed – sometimes at a torturously slow pace and at other times, much quicker – your agent will come to speak with you about how it’s going.
They’ll confirm your reserve, because this is the point where the auctioneer can announce that your property’s ‘on the market’.
As soon as you hear those magical words from the auctioneer, you can sit back and relax, knowing that the fall of the hammer is just moments away and you’ll be free to move on to the next exciting chapter in your life.
If you want to read more about the auction process in particular, check out this First time bidders ‘how to’ guide by Will Hampson. He provides some great tips and insights as a professional auctioneer in the busy Sydney market.
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