The peak Spring selling season for property has almost finished and it’s been a reality check… particularly in Sydney and, to a lesser extent, in Melbourne.
There were plenty of signs of the slowdown in residential property values… falling auction clearance rates and softer prices.
If you’re thinking of selling in 2018 (or your sale is being carried over from this year) you need to be a lot savvier in the way you sell. For buyers, the turning of the tide in their favour looks likely to continue.
We’ve known this slowdown has been coming for sometime through leading economic indicators but now buyers and sellers need to get their “minds” around the new property environment. Let’s face it, property buying and selling is all about psychology. Those who understand the new environment will be the ones who benefit most.
The saddest situation are those sellers who think good times never go away. They wait so long for an imaginary “fairy godbuyer” that financiers get nervous and individual stress levels rise enormously.
The facts of life are that property does fall, or stagnate, in value. Like every other investment, residential property moves in a cycle up and down. Sure you only crystallise a loss if you have to sell, but that’s no different to any other investment either. So whether you’re buying or selling, here are our tips on how to navigate the current climate.
The key to selling is meeting the market price. The value of any investment is only what a buyer is prepared to pay.
So how do you improve your chances of selling in this market?
. Never, ever buy before you sell
In this market, it’s just crazy and will add to the pressure to sell your existing property quickly and cheaply.
We have a mate who came across a “bargain” in the next street selling for the same price it was 4 years ago. He snapped it up and is now finding his existing house isn’t getting the interest or the offers he was expecting. He’s starting to sweat. He needs a buyer.
. Set a realistic price
Take the time to research what similar homes, on similar blocks, have been selling for in your area.
Set the maximum price you expect your house to go for. In these times buyers are looking for a bargain and want to start negotiating way below the asking price.
We know it can be a bitter pill to swallow but if you’re trading in the same market you’ll probably pick up a bargain on the other side.
Look at the auctions results over the last couple months for similar standard properties in your area and take advice from local agents. Don’t forget to take in to account the condition of the property as well. Buyers in a soft market will still appreciate a nice renovated kitchen but make it’d done well.
Use the online property websites like realestate.com.au for your research and groups like SQM Research which sell reports on sales in your area which can be worth the price.Buyers are smart and in the end you’ll be beaten down to its correct market value, so avoid all the heartache and get the pricing right to start with.
. Choose a good agent
Speak to friends, neighbours and family in your area and see who they recommend. You want someone who is going to take a real interest in your property and put a big emphasis on marketing. Find out what their commission is, where they plan to advertise, and how much extra ads will cost you.
Most of all you wathe an agent to be honest and realistic. So many agents will agree with the value you want for the property so they can sign you up and get the business.
Then they come back with some excuse to cut the price (usually to the true market value) to get the sale.
You want an honest assessment right from the start so you don’t have unrealistic expectations which lead to disappointment and heartache.
. Prepare your property better
First impressions are so important. If the outside of a house looks attractive when people drive by it will encourage them to come inside. The key is the front yard.
Give your home a thorough clean to enhance its appeal. Clean the windows, scrub the bathroom, get rid of any mould patches, and wash grubby curtains or cushion covers.
Pay the most attention to the kitchen, family room, bathroom and master bedroom. They’re the most important rooms to prospective homebuyers.
Faded walls and worn woodwork can kill a sale, a paint job can work wonders. Cracks in the plaster can make the house look rundown. A bit of filler and paint will make a huge difference. The same goes for watermarks on the walls or ceiling where a previous leak has been fixed but the tell-tale signs remain.
. Do your research
Just as sellers are trawling the property websites to judge the sales in particular areas, so should buyers. Also try and go to as many auctions of properties in your target area to get a gauge off activity.
. Get you financing pre-approved
For many sellers under stress, a buyer prepared to settle quickly can be a huge attraction.
It is a huge bargaining chip in a slow market to settle quickly if the price is attractive.
. Don’t get emotionally attached
Easy to say, but we know, hard to enforce. For most of us it does get emotional when we fall in love with a property to live in.
But the property pendulum has swung back in favour if buyers and you need to take advantage of it… you’d be a mug not to.
So drive a hard bargain, be prepared to walk away from the deal… but be realistic.