There’s no denying that recent market conditions in many parts of Australia have proved quite favourable for property vendors.
Sydney home owners in particular have been delighting in frenzied bidding wars at weekend auctions, while listings have been consistently snapped up for well above guide prices right across the Harbour City for some time.
But as with everything, all good things will eventually come to an end. And if you believe the housing bubble hype, ‘the end’ in this instance might be a major price correction in some of today’s particularly heated housing sectors.
Aside from all that ‘doom and gloom’, even when conditions obviously support the seller, you still need to put your best foot forward in order to optimise your asset’s value to the market.
And in some instances, you’ll need to make your property stand out among a bubbling, noisy crowd of contenders.
In good times or bad, selling property can be a daunting prospect. Here are 9 key considerations that, when approached carefully, can make the process of selling your property a little less scary.
1. Appointing an agent
It’s advisable to interview at least three real estate agents, before making a final decision as to whom you’ll engage to manage the listing.
Narrow down your search by attending auctions and inspections in the local area and assessing the agents’ performance, much as a purchaser might interact with them.
It’s important that you’re comfortable with the agent, as they’re essentially representing you and your property within the marketplace. Obviously, you want them to make a very good first impression.
Once you choose an agent, you’ll be required to sign a Sales Authority, which will be bound by different terms and conditions, depending on whether you agree to a private treaty sale or auction.
2. Understanding the costs
Generally the selling agent will only take their fees once your property is sold. The agency will cover all marketing costs until settlement occurs, at which time advertising expenses are recovered from the transaction, along with an agreed percentage of the sale charged as commission.
Commissions structures can vary between agents, but generally will be quite similar within any given area, particularly where a lot of them are competing for your business.
Usually commissions will be around 2 to 3% of the sale price, or on higher end listings, may be staggered so that the agent receives an incremental bonus commission for achieving anything above list price. Some think this latter approach can encourage an agent to work harder for you.
You also need to consider things like legal and relocation costs, if you happen to be a homeowner selling your PPOR, or things like stamp duty and CGT as a property investor.
Then of course there’s the possible early discharge penalties charged by lenders if the property is still mortgaged.
If you account for selling costs in the vicinity of 5% or so of the sales price, you should be in fairly safe territory with the numbers.
3. Presentation perfect
You want your house to stand out from the crowd. Make it so inviting that people won’t want to leave on first inspection. Neat and tidy is the priority, along with organised, clutter free and welcoming.
Remember, the space needs to fit buyers’ expectations and needs, so try to cater for your market demographic in the soft furnishings and colours you use. This is one time where it can pay to read a Home Beautiful and try to be ‘on trend’ when it comes to your interior design skills.
And never neglect the interior for the exterior, or the other way around. Both the inside and outside of your property has to sell a way of life to potential buyers.
Added touches, like glossy photos of the suburb’s highlights on display at open houses, can really give people a sense of the experience the home promises.
4. Preparing for the campaign
A campaign typically commences about a week to ten days after the property is listed. This gives the agent time to prepare for marketing, with photography, copy and ‘For Sale’ board graphics arranged prior to the official launch.
At this point, you should appoint a solicitor to prepare the necessary legal documentation. In some states for instance, you can’t sell a property without a Vendor Statement or Section 32.
5. Launching the campaign
This is ‘go time’, where your property is all over the internet and local papers.
Auction campaigns are generally quite short and intense, with a lot of saturation advertising and multiple inspections within about a month, from start to auction day. While private sales campaigns will last for as long as the house remains on the market, or until the vendor withdraws it.
6. The early weeks
Real estate agents will tell you that the first ten days are generally the most telling when it comes to the question of whether or not a campaign will prove successful.
A new listing will usually generate immediate interest amongst others that have been around for a while. If that doesn’t happen, then something might be amiss with your strategy. Generally the first place you should look is the price.
At this stage, the agent should be communicating with you almost daily, or at least every second day, to report market interest, either by phone, email or in person.
Interested parties might request several inspections before putting in an offer, and agents should be pro-actively maintaining contact with prospective purchasers to encourage a mutually beneficial negotiation process.
7. The pointy end
Agents use the second half of the auction campaign to identify potential buyers and formulate a picture of what the ultimate outcome might look like.
At this time, you’ll also be required to advise the agent of your ideal reserve price, which should sit within their estimated price range as quoted throughout the campaign.
8. The auction
An increasing number of properties across Australia’s major cities are sold at weekend auctions. That’s because it’s generally held that auctions present the market with the most fair and reasonable opportunity to come up with a price it would be willing to pay.
Auction day can be an incredibly stressful time for not just nervous bidders hoping to secure your property, but also for you as the vendor. Vendors often rely on a good outcome because they’ve already bought elsewhere, or need to release equity for some other reason.
There’ll be one final inspection before the auction commences, at which time bidding can either kick off with gusto, or stall for some time as the auctioneer warms up his audience.
Either way, if competition pushes the price of the property up to reserve, bidding will pick up pace, as punters know the property is “on the market” and set to sell.
9. The deal is done
Or at least that’s the eternal hope of every anxious vendor waiting on an outcome, be it at auction or via private negotiations.
If you’re fortunate enough to sell your property and achieve your optimal outcome, then it’s time to prepare to move onwards and upwards, leaving your property in the loving hands of its new owners.