Deadline Sale, Auction, Tender, Price by Negotiation (PBN), Set Sale Date, Buyer interest above $400,000 – What on earth does all of this mean?! Sometimes as agents, we forget that the terminology we use can often be very foreign to people. In this article we will briefly explain these sales methods.
Selling your home is not as simple as getting an opinion on a possible sale price and then putting it on the market if you really wish to get the best money you can. After all, you’ve probably worked very hard to earn the money to be able to invest in your home or investment property. Why would you sell yourself short and give someone else a portion of your nest egg - who’s probably not even related to you. It’s your money, and it is important you get the right advice to ensure you achieve the best possible price.
Selling a property is a marketing exercise first and foremost. The price you achieve often depends on the marketing method, and, the skills of the agent. Different movements in the market can also have a huge effect on the final result.
In an active market like we currently have in Hamilton, Sale by Deadline Treaty or Set Sale Date is definitely worthy of consideration. This is a lot like a Tender, where the agent sets a date and time in which all offers will be presented to the Vendor. Offers can be conditional or unconditional. The timeframe is somewhere between 7 to 20 days before the deadline closes. This often allows ample time for purchasers to do things such as getting their builders through, consulting with their lawyer, getting a LIM, sort their finance or even just get a family member to have a look. In my experience we often see a large variance in prices and conditions on the deadline day. The great thing about deadline sales and Tenders is, no one knows what the other is willing to pay, so often the variance between the highest and lowest offer can be quite substantial. I recently had 13 offers on a property where the difference between the highest and lowest offer was a remarkable $121,000.
If you have a definite date you need to sell by and you’re prepared to ‘meet the market’, an Auction is likely to be a good option. I do believe agent competence has a huge influence on the outcome of an Auction. If you choose to sell by Auction, don’t be afraid to ask your agent if this is something that they feel completely confident about doing. The idea of an Auction is to create competition and in doing so; push the price up. If there is competition, people tend to bid a little higher than they intended – they get caught up in the moment. If your reserve is met on the Auction floor – you’ve SOLD - because all bids are unconditional, cash bids.
Price by negotiation: I personally feel this is always the worst method to use. If you don’t want to Auction or have a Deadline Sale, put a price on it. In my experience of nearly 20 years in the industry ‘By Neg or offers’ attracts far less buyer enquiry than any other sales method.
Putting a price on it: This is a very traditional sales method – How can you be sure that you are getting the best price for your hard-earned asset? If you do price it in this hyped market – price it with a slight premium. If it is priced right and is a property that is likely to have a wide buyer pool, it is very likely you will achieve multiple offers. We are receiving multi offers on almost all priced listings at the moment.
The cost of selling (commission) differs between companies. At the end of the day, we compete for listings and all offer different deals. With an asset as big as a property, we always tell our prospective vendors to choose their agent based on who they 'gel' with (who feels right for them). We suggest listing with an agent who you feel you can be open, honest and comfortable with. Choosing the right agent can make all of the difference between a positive and negative real estate experience.
The method of marketing can often incur an extra fee over and above the commission payable, but these are always optional costs. This can be for extras like newspaper advertising, photography, internet feature ads, flyers, and perhaps a charge for an Auctioneer if you choose to Auction. These are often much more inexpensive than most people think they will be and, well worth the ‘spend’ to lift your property above your competitors. We currently have an incredibly special package for Deadline sale and Auction listings. Jess and I are more than happy for you to give us a call to give you a guideline on what you would expect to pay if you are considering selling. We are always happy to chat.
Buying or selling an investment property can have a lot of impact on your financial lifestyle, both current and future. If you buy the wrong property, or, buy or sell at the wrong time – there is a chance you will make the best decision you will ever regret! Done with a bit of planning, property investing can make a huge difference to your financial health.
The most important thing is to decide is what type of investor you are. Looking for the best returns only, can often lead you in to a great deal of strife if other personal criteria are not met. I will briefly run through some of my pearls of wisdom (I like to think they will be of value) which I have gained from being in property sales and having investment properties for over 20 years.
1) The Long term hands off investor: Do you want to keep your investment until you retire, which will then provide you with a weekly income, or have a property that you can sell easily if a serious event happens in your life? If this is what you have in mind, I suggest you look at low risk properties, which are often brick and tile and generally have the lowest return but tend to be the least problematic. Consider using a Property manager to take care of the property also.
2) The Short term do up and on-sell investor: Are you someone who is trying to quickly build wealth through property? Often people entering in to retirement are also looking for something to do. This is often a ‘hands on job’ or one where you need to take expenses of hiring tradesmen in to account and purchase if there is enough profit left after expenses and taxes are paid. This is where you look at do-ups, or new builds.
3) The family or friend investor: Are you considering buying to house a family member so that you can provide them some security? I have seen people often purchase a property for a child, sibling, parent or grandparent. This can be a lovely gesture but do talk this through with an independent party (an agent you trust, a lawyer or, a friend who is good at talking this through objectively). Often properties like this are purchased to help someone out, and sadly more often than not, that person ends up moving on and you may be stuck with an investment not ideally suited to you. There is no definite type of property here – but make sure it is one you are happy to have if your friend/family member moves on.
4) The naïve or wrongly advised investor: Sadly, this is a person who purchases the completely wrong property and sells it for a loss and has a stressful investment. Ultimately they never buy another and warn everyone against it, based on the unhappy experience. The unfortunate thing here is that if this person had been given the right advice and perhaps took just a little more time, they possibly would have been someone who would have eventually built a large portfolio because they were not risk adverse – which opens one to look at all opportunities.
5) Lastly the ‘have a go at anything' or the 'seasoned' investor: These people typically have a certain type of property they target. However they are open to opportunities including keeping a property short or long term, doing up and on-selling, or, adding ancillary dwellings or subdividing. These people typically end up with a large portfolio because they are always on the hunt!
It is really important to talk to someone who understands property investing. An agent who has investment properties themselves have learned from their own mistakes (if they’ve had any) and therefore they will not be risking your money by practicing on your investment. I own a number of investment properties and am more than happy to talk with you to establish what type of property may suit you best before you buy.
You can contact us at the office on 07 839 7060, Kim at email@example.com or 027 247 6564 and Jess at firstname.lastname@example.org or 027 821 0998.
When you decide to sell your house using a Real Estate companies services, it is very important that you make the right decision on which one to use. The wrong choice may not only leave you with a sour taste in your mouth, but it could also cost you a significant amount of money. So, how does one know who to choose? Before we get started; the difference between a salesperson and an agent is the qualification. An agent is the more qualified of the two. I will use the word salesperson throughout this article because it can incorporate both. The company or agency is the Real Estate Company (i.e. Ray White) that the salesperson represents.
I have been selling property for 20 years, and the way that people select their agent hasn’t changed. I would be bold enough to say that recommendations are at the top of the list – either someone who has a friend or is related to a salesperson, or, has had a pleasant experience and wishes to ‘promote the agent’
Let’s discuss a few ways to select your Real Estate Salesperson
Firstly – choosing a company to market your property is completely different to choosing a salesperson. Whilst selecting a reputable company is important, the service you ultimately receive can vary largely depending on the salesperson. Think about your favorite shops; the experience you get is dependent on who serves you. Real Estate is no different. If you simply phone a company to sell your property without requesting a specific person, you will be put through to a ‘duty agent’. It’s important YOU select your salesperson, don’t settle for a random selection… this is ‘big money’ you’re about to spend – protect it by making informed decisions.
A recommended salesperson: This is a great way to select your salesperson, but only if it’s a recommendation from someone who has used that particular salesperson in the past. DON’T feel obligated just because someone is a family friend. They may not have the skills or personality that you are looking for – remember this is a huge financial asset – you need to employ someone you feel can truly protect your investment.
A salesperson who has a high profile and a lot of listings: They may be very skilled, but more often than not, have other people working for them. If they have too many listings, it’s not always physically possible for them to always show purchasers your home or do your open homes every time, so they use another salesperson. If it’s the personal touch you’re after, ask the salesperson if they will always be the one who will be dealing with you and not someone else you didn’t select. It is your right to expect to work with the person you choose.
A salesperson who is experienced, new or young: Someone new isn’t necessarily a bad option as they are often extremely enthusiastic and must be supervised for the first 6 months of their career, so you receive the benefit of someone experienced working with them as well. Young people are very savvy when it comes to the internet. Salespeople who have been in the industry for a long time have great experience and knowledge, but being in the industry for a long time doesn’t necessarily make them good!
Going through open homes: I believe this is one of the best ways to choose your salesperson – you can see how they ‘perform’ on behalf of their client, this includes how professional, friendly and approachable they are. Observe how they present themselves … this may be your property next! It is important to remember however – a skilled salesperson will identify someone who is genuinely interested in a property, so don’t necessarily judge them solely on their follow-up – their skills may help them to recognize that the property you viewed was not for you.
Most importantly, find a Salesperson you like and trust – If you like them, your buyers probably will too. You have to feel that you can trust and confide in them. You will need to have confidence in any advice they give. The right salesperson will take a long-term view and ALWAYS put your interests first.
Jess and I are a mix of 'old and new'. I have 23 years’ experience and Jess is in her fifth year in the industry after being awarded the ‘Rookie of the Year’ in her first year. We pride ourselves on being very approachable and we genuinely care about the level of service we give our clients.
Please feel free to give us a call to discuss selling your home, or call in on us anonymously at an open home! Don’t forget our 10% super gold cardholder discount on fees for those over the age of 65.