Is your property ready for sale?
You’ve made the decision to sell, but is your property ready? How can you, the owner, maximise the sales value of your property?
A property purchase is an emotional decision
People generally buy coastal property to enhance their lifestyle or for a “Sea-Change”. They are emotional decisions and first impressions will, in the majority of cases, usually decide whether they like the property or not. When looking to sell, you, the owner, have opportunities to enhance the emotional appeal – “the hook” – that will entice your buyers.
The first opportunity occurs at an external viewing of the property after they have viewed it on-line via your marketing which may or may not lead to the second opportunity – the inspection. There is a great deal that you can do to lead prospective buyers from viewing, to inspection, to offer.
However, the majority of prospective purchasers, if they are at the stage of making an appointment to inspect, have already formed some attachment to the property by viewing it on-line and having driven past to establish if their like the location prior to making the call . So when they inspect the property they are looking at two things: Does the property tick all their boxes and what would need to be changed to suite their requirements?
Preparing for external viewing
When a prospective buyer drives past your property or views it on the Internet, will he or she get an impression of care, or perhaps of neglect? What can you, the vendor, do to trigger the desire for a full inspection? Are there visible factors that might lead a prospective purchaser to think that the property needs some work? Will they be trying to assess how much this work might be likely to cost, instead of focusing on the positive aspects?
Walk outside and have a good, long, objective look at your property.
Outdoor Entertaining Area
- Is the decking sound or rotten?
- Do you need to replace a board or two?
- Big visual surfaces are usually what catch the eye first. Is the paint peeling and chipped? To repair and paint it can be a very effective and low cost means of enhancing first impressions of your property.
- Is your outdoor furniture showing signs of weathering and too much wear?
- Have you got an accumulation of outdoor clutter and how’s the Barbie? Try for a clean, spacious and inviting feel.
A well-maintained garden not only provides instant and eye-catching appeal but also suggests the degree of care with which the whole property has been tended. A neglected garden, a rundown fence, can trigger negative responses, discouraging potential buyers from investigating any further.
Roofing, downpipes and external paintwork
Again, do they send a clear message of good maintenance to onlookers or might they suggest a general lack of TLC? There are often low cost ways of creating impressive visual improvements. Talk to us.
At Mitchell’s Realty, it is part of the service we offer, advising our vendors on the best ways to send a positive signal during that all-important first impression.
Preparing for inspection
The following suggestions present simple, common-sense guidelines to ensure your property is at its best when prospective buyers arrive. Stand back a little in each room and look with an objective eye:
- Look at the arrangement, condition and choice of your furniture. Your artwork. Is the overall impression one of clutter, or space and light? If you aren’t sure, ask us.
- Could the paintwork do with a touch-up here and there? Are there blobs of blue-tack on the walls in the kids’ rooms? Wear and tear in the hallway?
- Do the carpets need a steam-clean? Is your eye drawn to stains and signs of wear? In some cases, you might consider low cost replacement. The visual enhancement that a new carpet lends to a room can make this more than worthwhile.
- Take a close look at the kitchen, bathroom, toilets and laundry. Any cracked, discoloured or broken glass and tiling should be replaced if possible. Change washers on those dripping taps. You don’t want a prospective purchaser to be visualising all the things that need to be done (and what that might cost), so take time to fix up those little things.
- Last but not least – is it clean? Really clean? Sparkling clean? What about spots of mildew around the bathroom fan? How are your other fan blades looking? A build-up of grease in hard-to-get-at kitchen areas? These small things can lose you the ‘hook’ of emotional appeal, and could lose you an offer. If necessary, consider hiring professional cleaners to get the results your property needs during a marketing campaign. Also, every house has its own unique fragrance, a small point but an important one. If necessary, consider using an unobtrusive room freshener, such as a light citrus or vanilla scent.
Open For Inspection
Pre-planning open houses and the inspection times of a property enables the seller to arrange their lives during the marketing campaign and helps ensure the property is presented in its best light at all times.
SETTING INSPECTION TIMES
Many factors need to be taken into consideration when setting times and days, such as the location of the property (for example, inspections of a property next door to a school most likely wouldn’t be too favourable at 3pm on a school day) and whether any views from the property are best seen at a certain time of the day.
DON’T PLAY HOST
Agents will often encourage sellers to not be present during inspections in order to allow prospective buyers the freedom of inspecting the property, without feeling like they are ‘intruding’ in someone else’s home.
TAKE THE PETS FOR A WALK
If pets are kept on the property, perhaps consider taking them away when open houses or inspections take place.
Your property – your agent
So, you’ve completed all the preparation. Now:
How do you determine the current market value of your property?
Why should you sell your property under an Exclusive Agency Agreement?
Current market price
It is often the case that an owner has a higher opinion of the value of his or her property than that indicated by the property buying market. Unless this view is balanced by the varied factors that influence the market, an owner may set an inflated price on the property. This can cause potential buyers to not inspect which leads to your property being on sale for an extended period. Property market reactions to this single factor are usually: That place is still for sale; wonder what’s wrong with it? Result: You lose the opportunity to create competitive momentum amongst buyers. This is especially evident with Internet marketing. It is a new listing for a week and then it starts to slide down the list.
Factors that influence current market price include;
- recent sales of comparable properties;
- the current sales environment in the region;
- the buoyancy or otherwise of the property market and economic trends;
- the prospect of further development;
- Does the property have a feature that will really appeal to the market? An ocean view? Beach access? A tennis court? Games’ room or pool? Peace and seclusion? Generous accommodation and architect design?
Exclusive Agency Agreement
An Exclusive Agency Agreement guarantees you, the vendor, a higher level of service and commitment than a general listing (appointing multiple agents) would achieve. Firstly, someone needs to be accountable to you, the vendor, for the performance of the property once it goes onto the market. They need to have a plan and execute it, while keeping you advised through the process. Under a general agency, no one takes direct responsibility and no one needs to be accountable. The perception can be, more agents, more exposure. Given that all agents use similar mediums to advertise their properties, it is simply not the reality in the market place. Secondly, what business will offer a five-star focus on your needs if there is a chance that no payment will be received?
You need to appoint an agent that you feel comfortable with, that has a plan and has a demonstrated track record of negotiating successful outcomes. An Exclusive Agency Agreement with Mitchells Realty ensures all this.
Further, other real estate agencies can confidently contact Great Ocean Properties to propose a conjoint arrangement if they have a client with an interest in the property. Generally though, buyers follow properties not agents.
As a vendor/seller, it is important that you understand the legal requirements of selling a property. What follows is a basic guide from the Real Estate Institute of Queensland (http://www.reiq.com). If you have any concerns or queries, please do not hesitate to contact Scott Mitchell, principal licensee Mitchell’s Realty Hervey Bay – 0428 484 499
Comparative market analysis
If a seller asks an agent for an opinion of the current market price of a property, the agent must provide the seller with a Comparative Market Analysis (CMA).
The minimum CMA criterion an agent must meet is to provide information on three properties, of a similar nature and style that have sold within five kilometres of the subject property within the last six months. If a CMA cannot be produced (due to factors such as no recent sales), the agent must provide a written explanation outlining how they arrived at the suggested market price for the property.
BEWARE OF OVERPRICING
Setting a realistic price can assist with generating greater buyer interest and achieving a sale more promptly than if a property is overpriced. Sellers who set too high a price on their properties can damage their prospects of a quicker sale and risk the property becoming ‘stale’ in the marketplace.
An agent must market the property at the listing price set by the seller.
For example, if the property is listed at $359,000, the agent must market the property as such, not “$300,000 plus buyers invited.”
ADJUSTING YOUR PRICE
At any stage through the marketing of a property, the seller can choose to amend the listing price of a property; however, this instruction should be clearly given to the agent in writing. An agent cannot change any marketing or advertising of a property until they have received clear written instruction from a seller.
A Form 6 – appointment of a property agent must be completed in writing, with agreement from both parties to the terms prior to signing. Details to be agreed upon include: agent’s fee, marketing expenses, type of the appointment i.e. exclusive, pricing strategy and whether the property is to be sold subject to vacant possession, or with tenants in place etc.
When selling a property, you have several methods of sale to choose from. The three predominant methods of sale are through exclusive listing, open listing, and auction.
The REIQ recommends the exclusive agency method, where the sale of a property is in the hands of only one agency, rather than an open listing.
An exclusive agency is advantageous to the seller as the appointed agent will be dedicated to selling the property. This saves the seller the confusion of having to liaise with more than one agent.
Furthermore, this method will save the seller the time and money involved in advertising and marketing costs when a number of agents are trying to sell the property.
Real estate agents have an obligation to submit all offers in accordance with the seller’s instructions. Exceptions may occur when, for example, the seller instructs their agent not to submit offers under a certain dollar value.
Offer and acceptance
Sellers should not tell their agent a figure they are willing to accept (if it is lower than the list price) as agents have a legal obligation to attempt to get the highest possible price for a seller. An important thing to remember is that an offer should not be considered solely on the purchase price offered.
Some sellers may consider accepting a lower price if the offer is unconditional or has minimal conditions, rather than take the risk on a higher priced offer with more conditions that may not proceed to settlement.
In the case of an auction, it is the seller’s right to set the reserve price (if any) prior to the auction. The seller should consult with their agent and auctioneer when setting the reserve, as they will be familiar with recent sales in the area which are comparable to the subject property. The agent should also provide the seller with regular feedback from prospective buyers through the entire marketing campaign.
A RECOMMENDATION FROM REIQ
The REIQ recommends sellers do not disclose or discuss their reserve price with anyone but the marketing agent and auctioneer.
Sellers should remember to be realistic when considering an offer or setting a reserve, keep the age old principal of supply and demand in mind, and also factor in other general market conditions.
Contract of Sale
Contracts of sale cover all the details of the agreed sale, including property identification, purchaser’s full names, agreed price, deposit, settlement date and terms of sale, including special conditions, inclusions and chattels.
Most often, it will be the buyer who makes the initial offer by signing contract documentation, which is then presented to the seller by the agent. If the seller wants to make a counter offer and change the terms or offered price, the changes are made on this contract of sale, initialled by the seller and presented back to the buyer by the agent for further negotiation.
BIND THE CONTRACT
When both parties agree on the offered price and the terms of the offer, all parties must sign and initial any changes that have been made to the document and a binding contract is then created.
There are key steps that must be taken to ensure a contract is legally binding on all parties including:
- All initials and signatures of the buyer and seller are on the contract, and the contract is then dated
- Acceptance has been relayed to all parties.
- Agents should ensure that all parties to a contract receive a fully signed copy of the contract as soon as the above steps have been taken.
Transfer of property ownership is properly handled by a solicitor or conveyor and is termed conveyancing. We recommend that legal advice is always sought. Settlement means that the balance of the purchase price has been paid to the vendor and the physical possession of the property passes to the purchaser, subject to the terms of any existing lease. Settlement date is set out in the Contract of Sale and may be altered if both parties are in agreement. It is usual for a legal representative to attend to settlement on your behalf and keys may be obtained from the selling agent immediately after settlement has occurred.
Please note: From 1 December 2014, commission in Queensland for real estate transactions is deregulated. This means that there is no ‘standard’ or recommended commission rate. The agent is required to ensure that commission is clearly expressed and the client fully understands the likely amount and when it is payable. Agents may choose to express the commission payable in a variety of ways which may include a flat fee commission (irrespective of the sale price); a percentage commission or a combination of the two (i.e. a flat fee up to a certain amount and a percentage thereafter).
The commission payable for a residential sale is generally paid on settlement from the proceeds of the sale. It is advisable for sellers to instruct their solicitors to pay this commission from the proceeds of the sale on settlement.
Selling your property can incur costs which need to be taken into consideration.
The REIQ recommends sellers take into account advertising and marketing costs, a valuation report, pest and building inspection reports, as well as legal and financial fees when selling their property.
The above advice should be taken as a guide only and in no way replaces qualified legal advice from a solicitor. Mitchell’s Realty Hervey Bay Pty Ltd takes no responsibility for the accuracy of the information and would urge that people selling their property obtain professional legal advice for all legal matters.