It was bound to happen. As the brakes go on around major city housing markets, the fear mongering has commenced in earnest. But is it really all doom and gloom for sellers looking to offload housing assets in the “off season”? Or is it simply a matter of adjusting your approach accordingly?
Recent data from CoreLogic reveals that we’re currently seeing the biggest housing stock tsunami since 2012, with total capital city listings rising by 10.2 per cent over the last year. Not surprisingly, Sydney and Melbourne are largely responsible for the spike in supply, with an increase of close to 20 per cent across both major cities.
Head of Research for CoreLogic Tim lawless said of the substantial jump, “The rise in total listing numbers isn’t due to a panicked surge in new listings. This is more about less demand which is causing a rise in listings along with longer selling times and fewer successful sales at auction.”
In other words, it’s not necessarily a glut of new stock saturating the markets, but a slowdown in buyer demand. In essence, we’ve finally met the natural correction point in typical housing cycles that’s been a long time coming. At least when we remove all the panic speak and take a rational, level headed perspective.
As with anything, if you’re confident in your own position when it comes to cashflow and asset acquisition – that is, you’ve purchased well and maintained a balanced credit portfolio alongside your property portfolio – there’s no reason you shouldn’t be confident in offloading an asset or two at this time. Whether it’s your own home or an investment.
It’s just about knowing the market you’re selling in and meeting it accordingly. Here are 5 steps to successfully sell your home in the “off-season”…
1. Don’t get greedy
One of the biggest blunders sellers make in a market that’s slowing off the back of a significant frothy phase, is to set unreasonably high expectations when it comes to the asking price.
Don’t alienate your market by asking a price that in no way reflects the current conditions or owner-occupier opinion. The best way to accurately ascertain the most appropriate asking price for your property is to…
2. Seek professional advice, but be discerning
Have at least three agents visit the property to provide their expert opinion as to where it sits in the market of the day. Heed their counsel, but remain a healthy skeptic throughout this process.
Real estate is a competitive industry and it’s not unusual for agents to “groom” vendors in order to obtain a listing from the competition. This can mean quoting an unreasonably inflated asking price and then gradually conditioning you to accept a lower offer.
Ask to see the data their valuation is based on, in order to get a clearer understanding as to how they came to the figure suggested. Engage in a clear dialogue about what they’re basing their opinion on. Listen carefully and when you find the agent who seems the most knowledgeable on their market, be prepared to take their advice around things like pricing and presentation.
3. Perfect your presentation
The initial impression potential buyers have of your property will be via your chosen agent’s online marketing campaign. Professional photographers can generally make anything look good, but they can’t Photoshop out-of-control clutter or signs of neglect.
Maintain the property in a clean and tidy order for the duration of the marketing campaign, paying particular attention to readying it for the big photo shoot and creating that all-important ‘kerb appeal’.
De-clutter and keep your property picture perfect by packing away any personal belongings you don’t need to access, and stow boxes in an offsite storage unit.
Keep lawns maintained, garden beds weeded and the exterior looking its best. By minimising any potential for mess, you’ll have less cleaning to do at the drop of a hat and be able to…
And don’t be tempted to scrimp and save money when it comes to paying for professionals to style, photograph and promote your home from its very best angle.
4. Be responsive to the market
Potential buyers can’t always make it to a pre-scheduled OFI, so try to be flexible in allowing agents to arrange random, last minute viewings.
If you make arrangements for your agent to conduct inspections at your property when you’re not contactable to confirm arrangements beforehand, they should let you know about the prospect’s feedback in a timely manner.
Of course if you’re selling an investment that’s currently under a lease agreement, you’ll be required to provide notice to your tenants when it comes to arranging inspections in accordance with Residential Tenancies legislation.
5. Meet the market
Don’t be one of those vendors who receives a reasonable offer, reflective of current market conditions, only to stubbornly dig your heels in and ‘wait for more money’. You may end up having to accept an offer below your initial expectations after months of waiting anyway.
While you wait for bigger returns, the next property you could have been buying will likely have increased in price, thereby cancelling out any extra little cream you might manage to get on top of the deal you could’ve already done.
Be prepared to entertain all reasonable proposals, and make sure your agent knows how to play a very good negotiation game.