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There is a common misconception that properties sell themselves. Yes, they can, but generally for a lower price than can be achieved. If you want a great outcome and a seamless stress-free process, you require a smart hard work agent who always offers exemplary service regardless of circumstances or property type. What you need is a Real Estate Doctor. Throughout this website and my regular Newsletters, you will find many examples of an agent that always goes above and beyond.
When you decide it’s time to downsize your home, probably the first question that comes up will be “Do I buy my next home first, or sell this one first?” There is no one-size-fits-all answer – there are pros and cons to both strategies and it really comes down to your personal situation and there are many variables. In this series I will discuss various issues facing owners who are downsizing. Having downsized ourselves, and also helped many clients to downsize I have put together some information you may find informative and helpful in your own personal journey.
1) While not always obvious, you must firstly identify where you want to live and get consensus from your partner (or friends/family as the case may be). You can’t move into a new home and/or area without the key decision makers on board; that’s a recipe for selling again soon after you buy or worse still, separation. In my experience this is the hardest step for most, however one step that can’t be skipped over. This question is not just about the location but also about the type of property: do we build, buy a smaller house, large apartment all on one level, townhome, or 55+ complex – keep an open mind and certainly try (short term stay or Airbnb) before you buy in a specific location.
2) There is a saying that if you buy and sell in the same market the price differential is minimised, and largely this is true. However, if you are buying a property type that has a lower price growth rate (e.g., apartments in certain locations) than your house which may be enjoying good price growth, then selling your home and buying an apartment in these circumstances may be to your advantage.
3) Buy or sell first? This is usually the main focus for downsizers and for good reasons; it may have a huge financial and emotional impact on you if you don’t get it right. Let’s look at a couple of the issues. You sell first then can’t find the right property or the property you were looking at has been sold. In this case, you probably will have to pack up and move in with friends or family or rent a property for 6 -12 months until you find a suitable new home. This sometimes can be stressful because you have to move twice and you can’t really settle down and relax until you buy and move into your new home. The benefit however is you know how much cash you have to spend and you are in a good position to write a strong contract.
If you buy first, you may feel the pressure to sell sooner rather than later because you don’t want to service two properties due to the extra cost and time. In some circumstances you may also want to know ahead of time how much you will have in the hand once sold. This also has the advantages of ensuring you have the funds to buy the best new home possible.
The other common issue about buying first is that you may have to get relocation finance (it was previously called bridging loan) to enable you to buy the new property while maintaining the loan on your existing home. It is often thought that this option is expensive. Wrong! In the past bridging finance was always much more than standard home loans, not anymore. Right now, most people can get a relocation finance for almost the same cost as for your principal place of residence. Remember, not all banks are the same so please call me on 0432 00 33 55 so I can refer you to an experienced Loan Broker, who will find the best and most appropriate deal for your circumstances.
An experienced professional agent can help you weigh up the benefits and drawbacks of buying or selling your home first and guide you to a decision that will achieve the best outcome for you. I am always happy to share my life experiences, and expertise and market insight with homeowners thinking of downsizing. Call me for a no-obligation conversation about what you’d like to achieve with your next move.
Whether you have decided to sell or rent your own home, some of the steps are the same.
Firstly, you have to remove your clutter. This is probably the biggest challenge for most people especially if one party loves to collect and save almost everything. Never fear there is always a solution.
It’s best to start several months before you plan to move as decluttering is often a slow difficult job with lots of emotions. A good rule of thumb is only take with you what you are going to actually use or wear – there will not be room at the new place for excess (unless you are upsizing, as some clients decide to do). Don’t start with the mindset that you will store it. Some stuff has to be moved on, seriously.
Give excess pieces of furniture/clothing to friends, family, charity or sell it through an auction house like we did with some of our items. Large items that won’t fit into your new property or that you can’t bear to part with are better off in the safe hands of good friends or relatives – on permanent loan if you like. Long term storage of unused possessions is costly and often nothing happens with them for years later, if at all.
If you can be disciplined, you will achieve a refreshing new beginning.
1) Before selling, should I spend on home improvements or not, and if so, how much? This is a huge question with several different answers and depending on your circumstances and also the type of property. As a general rule never spend money if you are not certain you will recoup your expenses in a higher sale price. This is one good reason why it’s a good idea to speak with an experienced real estate agent who can guide you. The other factor in this equation is how long will the home improvements take. TIME = MONEY. What I can say which is true for the vast majority of sales is the need to spend a small amount to tidy up the yard and do some minor landscaping. Painting is not always necessary however does provide a refreshing new look. These are all inviting factors that influence the buyer’s decision.
2) To style or not to style a property. The truth is most people can’t visualise what their furniture will look like in the house. Some smart buyers bring measuring tapes with them so they know exactly whether their lounge or king bed will fit. From my perspective, firstly, styling quickly shows buyers how certain living or workspaces can function – it takes away most of the uncertainly which can sometimes delay buyer’s decision making, and secondly, it demonstrates to buyers what their new home could look like. They can also share the photos with friends and family. If styling secures the buyer more quickly and creates competition between buyers than you are more likely to secure a higher sale price than otherwise possible.
3) In some seller’s minds styling a property can be expensive and out of their reach. As an alternative the professional photographer can insert virtual furniture into the photos at a fraction of the price. This has the effect of getting buyers to come an inspect the property. Those buyers that do not inspection the property are not buyers. We need them to view the property. Think about it. Photos with no furniture in them are not as inviting as photos with stylist furniture.
4) What are simultaneous settlements? This is where your home is settled (money changes hands) the same day as you settle your new property. Think about it. If you have a contract on your home and then once you are comfortable with the sale you can purchase another home and then line-up the settlements such that they settle on the same day. No living with relatives or in a motel until your new home settles. No storage costs. No relocation finance. Talk to an experience real estate agent to understand how this can be achieved.
An experienced professional agent can help you weigh up the benefits and drawbacks of buying or selling your home first and guide you to a decision that will achieve the best outcome for you. I am always happy to share my life experiences, expertise and market insight with homeowners thinking of downsizing. Call me for a no-obligation conversation about what you’d like to achieve with your next move. Just call me on 0432 00 33 55.
I hope you have enjoyed reading my mini-series on downsizing as much I enjoyed writing about it. As always, I am happy to talk further and expand on the thoughts and ideas contained in these articles. Just call me on 0432 00 33 55.
Competition creator strategies is a huge topic and I have covered many aspects of this topic previously under different headings. Last time I talked about how an agent can create competition from buyers if the seller ultimately decides that auction is not the method of sale for them. Here I briefly talk about why the Auction Method of sale is the best method to achieve the best possible sale price.
What are the Benefits of Selling Your Property by Auction?
I am often ask what is the best method to sell my property. My short answer is that Auction is the best method of sale because it removes the price from the equation and creates competition from buyers, thereby pushing up the price and achieving a sale price at or above market value.
Features of an Auction
1) There is no advertised price.
2) There is a set advertising and marketing timeline (3-5 weeks).
3) Auction day is sale day. Buyers need to decide by auction day.
4) No conditions e.g., no finance or building and pest inspection clauses.
5) Auction in-rooms or onsite? There are positives and negatives to onsite versus in-room auctions and that is a discussion for another time.
6) Auction sends a message to buyers that the owners are serious sellers.
The above is just a sample of the key points. For a more detailed discussion, call me on 0432 00 33 55.
I live and execute competition creator strategies for my sellers every day of the week. Read what my sellers have to say
Despite what you may have heard about auctions there are many benefits to selling and buying a property at auction. For one, it provides a clear and transparent process for both buyer and seller. I will expand on these points in future newsletters, however today the focus of this article is on buyers under the auction method of sale.
Buyers you need to be well prepared
Whether you have bought at auction previously or are a first-time buyer at an auction you need to be well prepared. What does that mean? Firstly, when you buy at auction it is not subject to finance approval, nor subject to building and pest inspection, and the five-day cooling off period does not apply. So, come auction day, you have to be ready to commit to a contract. It is worth noting that more than 50% of loans now go through loan brokers as they can generally get you a better deal than the banks are offering and can also advise you which particular financial institution best suits your particular set of circumstances. Interest rates vary considerably from lender to lender. You often are able to borrow more from some lenders than others which may be the difference between securing a property or not, on the day. This is a specialised topic. If you need advice from an experienced loan broker, send me a message and I will provide you with some options.
If you encounter any hurdles with your preferred lender or mortgage broker then be sure to talk to the agent. While the agent is working for the seller, he/she is also there to help buyers secure the property.
Do you know the terms of the auction?
This is very important, because if you require say 60 days settlement and the seller wants to sell in 30 days then you are never going to buy this property. Similarly, if you have a maximum of $15,000 available for the deposit and the seller is asking for $50,000, you will also not be able to buy the property. The key message here is to ask the agent what the seller’s terms of the auction are in respect to settlement and the deposit. If they are different than you can provide then simply ask the agent to ask the seller if they would consider a variation in the terms of the auction. More often than not, the seller will accommodate the buyer’s requests. There are several important situations that can arise in respect to the settlement period and the deposit, so my advice is to always talk to the agent, because they are there to help you buy the property.
Whether to pre-register or not?
Never take anything for granted when it comes to auction day because there are so many circumstances that can and do arise. A common one is that two names are to appear on the contract, but only one of the parties is present at the auction. In this case, the absent party needs to provide their consent to enable another to bid on their behalf. Can I bid by phone? Yes, you can. Again, be sure you have completed the necessary documentation that will legally allow you to bid by this method. Can a friend, buyer’s agent, or family member bid on your behalf? Yes, they can, however again you need to have all the documentation completed before the auction commences. All buyers whether present or not need to be registered to bid at an auction. Can I register just before the auction? Yes, you can, providing you have all the appropriate material, like photo identification, to enable you to complete the documentation. It’s wise to talk to the agent prior to the auction to either pre-register or find out exactly what documentation you need to register just prior to auction.
In the most simplistic terms, you need to have four prices in your head. Your
1) cartwheel price,
2) market value price,
3) push comes to shove price, and
4) walk away price.
The above message is self-explanatory; however, it is certainly not the definitive “how to” guide for buyers looking to purchase a property at auction. As always, talk to your agent so you fully understand the process to allow you the best possible opportunity to buy a fantastic property at auction.
I am available essentially 24/7 to answer your questions so don’t hesitate to call or email me to get some advice on how you can achieve a great outcome.
I live the above work ethic and strategies every day for my sellers and buyers (see testimonials elsewhere on this website) because everyone deserves the best possible real estate agent service and experience.
If you have bought and/or sold many properties then there is a good chance you will have encountered the use of the Multiple Offer Form. Whether or not you have previously been exposed to the use of this form, I am going to explain this form in more detail below.
It should be said up front that while the use of the Multiple Offer Form is not a legal requirement, it is considered to be “Best Practice”. In simplistic terms, the Multiple Offer Form provides all interested buyers, for a particular property, a fair and equal opportunity to purchase the property while simultaneously reassuring sellers that they are getting the best possible price for their property. I view it as a win-win situation for both buyers and sellers.
Let me demonstrate its use with an example then provide you with a completed Multiple Offer Form as it would be used in a real-life situation.
In my real estate business, every buyer who considers making an offer on a property is very important to me, regardless of their terms and conditions, and/or their price. I often say to sellers it’s not where the offer starts but where it finishes. As a matter of process, I always bring offers to sellers in contract form because that is the real proof that someone wants to buy their property. It is also very important to keep all buyers and the seller fully informed when you begin to have solid evidence that more than one buyer wants to buy the property. What works well is if you have several offers over a short period of time then the Real Estate agent should produce the “Multiple Offer Form”. Best Practice is for each buyer to sign a form to acknowledge that they are in a multiple offer situation and that they need to submit their best and final offer because they may not have another opportunity to make another offer. This is strong evidence to the seller that the best possible price has been obtained from the marketplace at that particular point in time. If your Real Estate agent follows the process carefully and diligently this provides a great outcome for the seller while also ensuring that all buyers have been given an equal opportunity to purchase the property.
Let’s look at the form itself. There are two key sentences in this one-page form which read as follows:
It is hereby acknowledged by: (the buyers names)
That the Real Estate Agent has made me/us aware that there is another offer to purchase existing on the above property.
I/we further acknowledge that I/we have been advised to submit our best and final offer and I/we have been made aware that I/we may not have an opportunity to make a further offer.
An example of the completed Multiple Offer Form
I have been involved in numerous situations where the Multiple Offer form has been used and to good effect. In many ways it’s a positive outcome for both buyers and sellers. As you can see, I live the above work ethic and strategies every day for my sellers and buyers (see testimonials elsewhere in this website) because they deserve the best possible real estate service that I can physically deliver.
So, when you need a healthy real estate outcome, call the Real Estate Doctor.
What great agents do differently to achieve higher sale prices?
This article builds on the full-service agent theme by exploring one of the many frameworks great agents use to achieve higher sale prices for their sellers.
The Seller/Buyer Price Paradox (see diagram below).
The green price arrow represents the seller’s expectation of price and the blue price arrow is where buyer’s see value. In the majority of situations, but not all, there is some common price level for both Seller and Buyer (the red arrow section). In about 90% of cases the Seller’s price expectation exceeds the Buyer’s maximum price where they see value. There is, however, a range of price points at which the Seller is willing to sell the property and the Buyer is willing to pay. Where great agents stand out is in their ability to work with the Buyer and Seller to advance the price to the maximum a Buyer is willing to pay to own the property.
As with all negotiations, it’s the skill and expertise of the agent that advances the Buyer to the maximum level they are willing to pay to buy the property. So how is this achieved? In short, an exceptional agent has a range of tools that he/she uses to maximise the outcome. Let’s explore this a little further.
Strategies and Good Processes
All good agents have a suite of smart strategies that they employ to suit the market environment, the property type and timeframe in which the Seller would like an outcome. Some of the key strategies are:
• Significant thought up front on who the target market for the property is, with advertising and marketing directed towards that target market. For example, drone photos and video of the property highlighting key places of interest, the most desirable attributes highlighted at the beginning of the advertisement.
• Multiple open homes per week to ensure buyers have the best possible opportunity to view the property. This also creates a sense of urgency, as does the auction method of sale.
• Always try your best to accommodate viewing times for buyers who can’t see the property at the scheduled open home times. Sunday open home times are also very effective – particularly for busy families and those Buyers who work on Saturdays.
• Post short videos and property links on Facebook and other social media platforms. Boost the post to reach more Buyers.
• The auction method of sale and the use of the “Multiple Offer Form” create competition between Buyers and find the maximum price a buyer is prepared to pay to own the property.
Strong Work Ethic
A strong work ethic goes hand-in-hand with delivering on the smart strategies and good processes discussed above. Clearly if the agent doesn’t have the right attitude and is not willing to work at any hour of the day to advance a sale and close the deal, then the outcome may not necessarily be the best possible one in the marketplace.
As a highly professional real estate agent, I want you to get a great outcome the first time around. My success rate in selling first time around is currently 89% (industry average ~75%). And I am constantly striving to improve that outcome for all my clients (see testimonials throughout this website or read about them in my Testimonial eBooklet).
I live the above work ethic and strategies every day for my sellers and buyers (see testimonials below) because they deserve the best possible real estate agent experience.
So, when you need a healthy real estate outcome, call the Doctor.
In several articles I explain with real world examples what exemplary service (Full-Service) actually looks like. Several different topics will be covered and these will be in no particular order.
Part 1. Creating Buyer Competition Without an Auction Method of Sale
1) Buyers must inspect the property if they are to be considered a “buyer”. Don’t give buyers an excuse not to see a property. Have multiple opens each week, including two on the weekend in some cases. Always have a mid-week open. From the buyer’s perspective, 30-minute opens are too short because they are looking at multiple properties. Saturdays are very busy for serious buyers; however, Sunday opens can also be very effective. Always try to accommodate the buyer’s schedule – e.g., they may be flying in on Thursday to look at property Friday and Saturday. Respond to their requests. Sellers’ also need to be flexible. Always invite buyers back for a second inspection to the open you may be having later that day or tomorrow – does that suit them?
2) You need professional photography (and floor plan) of the property and have a script that draws buyers’ attention to act and come and inspect the property. Change the photos and script slightly each week. Where possible have multiple ways your buyer can find the property; online, in print media, from a photo signboard, letterbox invitations, and especially important, an agent walk-through video. Not every buyer will find your property online – think of the number of apartments for sale. The property has to stand out and it’s the agent’s job to achieve the best stand out profile for your property based on the seller’s investment in advertising and marketing available. These costs can also be detailed. Don’t be afraid to ask.
3) Every buyer who considers making an offer is VERY IMPORTANT regardless of their terms and conditions, and price being offered. It’s not where the offer starts but where it finishes. Always ask your real estate agent to bring you all offers to the seller in a contract form, more the better, because this demonstrates the willingness of buyers to buy the property. Always keep the buyers and sellers fully informed when you begin to have several offers. What works well is if you have several offers over a short period of time and this leads to a situation of “Multiple Offers”. Best Practice is for each buyer to sign a form to acknowledge that they are in a multiple offer situation and that they need to submit their best and final offer because they may not have another opportunity to make another offer. A very powerful way to generate maximum price for the seller. This is a lot of work for the Real Estate agent, so be sure that this do it.
I live the above work ethic and strategies every day for my sellers and buyers (see testimonials below) because they deserve the best possible real estate agent service that I can physically deliver.
So, when you need a healthy real estate outcome, call the Real Estate Doctor.
No doubt you have heard this before. Property values double every seven years. You might have achieved better than that or no my property didn’t double in seven years. Just say you are considering selling next year. Hypothetically, say you bought your house in 2014 for $500,000. Next year you will have owned it for seven years, so I am expecting I will sell for $1,000,000. How realistic is $1,000,000? Now let’s look at some of the influencing factors and consider why many properties do double their value every seven years and others don’t. As always, it’s not that simple.
Firstly, the average (or medium) price growth in a particular suburb is calculated by the number of sales (and their average sale price) in that year, compared with the average (or medium) price in the previous 12-month period. Now let’s look at a couple of influencing factors. Just say seven houses in your street had significant renovations in the past 2 years, with an average spend of say $150,000. Furthermore, there was one old house that was removed and replaced with a new home. Your property is still in original condition apart from regular maintenance. Now in 2020, five houses were sold in the street, one in original condition and a further four which had been significantly renovated. The significantly renovated homes and the new one will have significantly increased the value of properties sold in your street in 2020. Now if a similar scenario occurred everywhere in your suburb then the average sale price compared with previous years may have been skewed disproportionately towards higher growth. The short answer is everything needs to be taken in context. As a general rule, it’s the land value that increases in value whereas the building on that land decreases in value, just like a car depreciates. However, the price of the house itself can be altered by injecting capital, as renovations, as shown in the example above. Because there is less land value associated with apartments this is part of the reason why apartments don’t appreciate in value as much as houses.
In short, always seek the advice of a real estate professional when considering selling your property and ask them for their professional opinion.