Selecting your selling agent
The term selling agent refers to the real estate agent who acts on behalf of a vendor in respect of the sale.
Your choice of selling agent will be of critical importance to the success of your sale as he or she will, amongst other things, provide you with an estimate of the likely selling price of your property, advise you on current market conditions, devise a marketing campaign to promote your sale, advise you on the appropriate method of sale, and negotiate with prospective purchasers on your behalf.
In our opinion the main points to consider in choosing an agent are:
- the quality of the marketing
- the skill of the negotiator, and above all else
- the trust and confidence you have in your agent
At Residential Real Estate Agents our marketing is first class courtesy of our in-house graphic design studio, Aqua Creative; our sales team are experienced and skilled negotiators; and we are committed to our clients so you can be confident that we will act in your best interests to minimise your stress levels and to maximise your sale price.
If you are considering selling a property please contact us on 02 9999 4499 to organise an obligation free market appraisal in the strictest confidence.
Timing of your sale
The real estate market like the share market moves up and down in market cycles. These movements are caused by the interplay of numerous macro economic forces such as the international economy, international trade, exchange rates, interest rates, employment, levels of supply of and demand for property, consumer confidence, and so forth.
As individuals we have no control over these movements in the market. What we might be able to do however is choose when to buy and sell property to maximise our financial gains. For example, it is desirable to sell at or near the top of the market cycle, and buy at or near the bottom of the market.
The long-term growth rates for residential property suggest that property prices in Australia double on average every 8 to 10 years. This situation may change in the future but the past suggests that whilst the market rises and falls, over time property values continue to rise.
When making a decision to buy or sell property where possible you should have regard to prevailing market conditions. In that regard you should carry out as much research as you can and speak to as many people as possible as everybody will have a different opinion on what the market is about to do.
Another market force that impacts property prices is the seasonality of consumer demand.
For example, on the Northern Beaches of Sydney consumer demand is greatest in the warmer months. This is in part because peoples’ minds turn to the beach in summer as the winter hibernation comes to an end. However, as many people take extended summer vacations the market goes relatively quiet by the middle of December and does not pick up again until mid to late January.
Market seasonality will differ between regions and even suburbs. For example, peak selling periods for regional coastal holiday locations coincide with school holidays, especially the summer vacation, which is contrary to the example already provided.
As the majority of vendors realise that there is greater demand for property during these seasonal peaks they tend to list their properties for sale at these times. Therefore, during seasonal peaks there will be a greater supply of properties for sale.
As there are more properties to choose from during these times some people will argue that this extra competition makes this an undesirable time to sell. These people advocate that it is better to sell when there is less demand during seasonal troughs, as there will be less properties for purchasers to choose from.
In addition to giving consideration to market cycles and seasonality it is also of great importance to consider your own personal circumstances.
This includes the need to assess both financial and non-financial considerations.
Sometimes there is a financial necessity to sell brought on by a change in personal circumstances, such as the loss of a job that had been supporting a big mortgage; a divorce where both parties want to sell the family home and cut ties; a deceased estate, where the beneficiaries wish to receive their share of the proceeds of sale.
And then there are situations where needs change, such as a growing family’s need for more living space; and the empty nesters’ need for less living space and a low maintenance home.
Whilst it is desirable to sell during the right months of the year, and at the top of a market cycle, it is not always possible to do so when you take all of your personal circumstances into consideration.
Deciding on when to sell a property is an exercise in considering and balancing market conditions, seasonality and all of the elements of your personal circumstances.
If you are forced to sell because of personal circumstances at what appears to be a less than opportune moment remember that quality properties that are marketed well and accurately priced will sell all year around.
Method of sale
Each of the following methods of sale has its own advantages and disadvantages.
The appropriate method of sale should be determined after careful consideration of a number of factors including the prevailing market conditions, the nature of the property to be sold, and the personal circumstances of the vendor.
Public auction is widely regarded as being an appropriate method of sale of residential property in circumstances where one or more of the following factors are present:
- The market is hot and properties are selling in response to strong consumer demand
- The property is unique and difficult to value
- A lack of comparable sales from which to estimate the likely selling price
- The vendors are comfortable with the attendant pressures of auctions
The theory behind the desirability of auctions is that where there exists more than one qualified purchaser for a property spirited bidding will occur between the parties at the auction and drive up the eventual sale price.
The other major argument in favour of auctions is that it provides a timeframe to the sales process, thereby focusing the attention of the market on the subject property and creating a sense of urgency amongst prospective purchasers.
Private Treaty (For sale)
When vendors place their property “For sale” they are selling by way of private treaty.
Private treaty sales can be marketed in a number of ways. The usual method is to set an asking price. Alternatively some selling agents will advertise a price range, or call for offers over a certain price, or expressions of interest without nominating a price.
Those who advocate this method of sale suggest:
- Many prospective purchasers are uncomfortable attending auctions
- Many vendors are not suited to the auction process
- It is possible to market the property more cost-effectively
- It is relatively easy to estimate the likely selling price of most properties
Buying and selling residential property is an emotional activity. The presentation of your property is a critical factor in the sales process if you want to achieve the highest possible price.
Whilst we all strive to be objective in our assessment of a property even the most objective of purchasers will respond more favourably to a well-presented property. An obviously neglected property sends out 'warning signals' to prospective purchasers, and unnecessarily provides them with a list of objections with which to negotiate the price down.
At a very minimum every property should be thoroughly cleaned and tidied by removing all rubbish and minimising clutter. Those vendors who feel overwhelmed by this task should seek the help of family and friends, or if necessary employ cleaners and/or gardeners to get the place in order. It will pay dividends come sale time.
Minor repairs should be completed before placing a property on the market.
An obviously neglected property sends out 'warning signals' to prospective purchasers, and unnecessarily provides them with a list of objections with which to negotiate the price down.
Things such as flaking paint, doors that don’t close properly, cracked glass, broken roof tiles, lights that don’t work, and so forth, are not costly to fix, but if left unattended they will have a negative impact on prospective purchasers and the ultimate selling price.
There are many home renovation shows on television these days offering the basic suggestion that you can profit from renovating your property before putting it up for sale.
An appropriate renovation plan, skilfully carried out, can no doubt improve the value of a property. The reality is however that after the sale it is very difficult, if not impossible to know for certain whether the plan worked. All of these renovation plans are based on anticipated selling prices, which are notional not actual amounts. Who really knows for certain what the place would have sold for if the renovations had not been carried out?
Renovating a home requires a degree of expertise, and the time and money to do the job properly. If the renovation is not a good one it might well cost the vendor money in the long run.
Some people argue against major renovations on the basis that many purchasers will want to renovate the property to their own needs and tastes. The belief is that these purchasers would prefer the blank canvass upon which to paint, rather than buy a painting that they don’t quite like.
Both arguments have validity and should be considered by vendors when making their decision to renovate, or not.
Building and pest inspection report
As some defects are difficult to detect it is an option to obtain a building and pest inspection report from a company specialising in this service. This will allow you to have necessary repair work done prior to the marketing of your property. A favourable building and pest inspection report can be a useful negotiating tool during the sales process.
Once the defects are known then it is a matter of retaining the appropriate trades people to carry out the repairs.
On the day
When your property is shown to prospective purchasers a number of cost-effective steps can be taken to maximise the appeal of your property. These may include:
- A thorough clean and tidy inside and out
- Lawns mown, gardens weeded and paths swept
- Eliminate animal odours by taking pet beds outside
- Turn on lights in dark rooms
- Open windows in damp or musty rooms
- Close windows and doors fronting busy roads
- Have some fresh flowers on display
The contract of sale should be prepared by your solicitor or conveyancer and include all of the essential terms and conditions. A contract of sale is a complex legal document and it takes an experienced legal expert to properly advise you in respect of your sale.
In New South Wales the law requires that a contract be available for inspection before the property is offered for sale.
The contract of sale does much more than just deal with the price, deposit and settlement of your sale.
The contract performs many complex functions such as clearly defining the exact identity and location of the land; the nature of the legal title you are selling (e.g. Is it Torrens title, strata title, company title etc); the zoning of the property (i.e. what uses are permissible, such as residential, commercial, industrial etc); the improvements on the land (such as houses, garages etc); any tenancies affecting the property; any encumbrances affecting the land, and so forth.
It is important to provide your solicitor/conveyancer and selling agent with a list of everything that will remain with the property after completion of your sale. This list will form the basis of the list of inclusions to be contained in the contract. This is a matter of negotiation as between the parties, however standard inclusions include light fittings, floor coverings, curtains and blinds. These can also be excluded from the sale if you prefer, and if so it should be clearly noted in the contract.
A certificate of compliance should be obtained from the Local Council if you have recently undertaken major building works.
It is advisable to have a survey of the land and buildings available when selling a property.
If the premises are leased and there is a current lease, check the expiry date of the lease and termination requirements if you intend to sell the property with vacant possession, and advise your solicitor/conveyancer accordingly.
There are many legal issues to consider, certainly too numerous to mention here, so it is advisable to consult your solicitor/conveyancer.
A registered valuer is qualified to provide you with a valuation of your property.
Real estate agents can only provide a market appraisal, which is an estimate of the likely selling price of your property.
The important difference to note is that valuers get paid for providing you with the valuation, whereas real estate agents only get paid if they sell your property. A valuation is normally a more comprehensive document than a market appraisal, prepared by an expert specialising in estimating the value of properties.
In most cases real estate agents who make it their business to know the values of properties in your area will have a pretty accurate idea of the likely selling price of a property, and the extra expense of a valuation is not warranted.
However, in some circumstances it might be worth obtaining a valuation of your property prior to appointing a selling agent. For example, if there are significant discrepancies between the market appraisals provided by the real estate agents you interview an independent valuation might provide a clearer idea as to the likely selling price of your property.
After having read through the selling information provided above you might care to use the following pre-sale check-list to help you prepare for sale:
- Consult your accountant/financial advisor on your plan to sell
- Appoint a selling agent to advise you and conduct the sale on your behalf
- Consider obtaining a building and pest report to avoid any ‘surprises’
- Prepare the property for sale by carrying out any necessary repairs
- Obtain a certificate of compliance from the Local Council
- Instruct your solicitor to prepare a contract for sale and note any inclusions
- Prepare/style your property in readiness for photography and purchaser inspections