Insights

Tools, tips, industry knowledge & market trends.

Selling for more in less time

When selling a property, most people have two conflicting emotions. They desire a quick sale, but if that is achieved, they fear that the property may have been undersold. Given that you will only sell your property once, it is imperative to get the highest possible price in the market. Is time on market the key to getting the highest possible sale price though?

The search for a new family home can be a lengthy, gruelling process. Even more so when it comes to interpreting the rubbery prices agents quote to buyers in the lead up to the auction. Many a buyer has been to an auction recently in the hope that their property search is about to end with the impending purchase. Hearts are broken when the opening bid is well above the buyer’s maximum price. Even more confusing, the opening bid is also well above what the agent quoted during the opening inspection. What is really happening in these (very common) instances?

At an auction, the property cannot be sold until the bidding reaches the sellers reserve price. Many sellers that sign up for an auction are comforted by the fact that the reserve price will protect them against underselling. The reserve price is usually set prior to the auction in a non threatening, low pressure environment. This first reserve is then given to the auctioneer in writing on auction day.

If the auction stalls below the reserve price, which is happening in many instances at present, the auctioneer and agent will then focus on the second reserve price.

Conditioning is one of the real estate industry’s favourite tricks used to get home sellers to lower their price expectations. If you are aware of it happening, you can protect yourself against it. But if you don’t realise that you are being conditioned, you can make decisions that you come to regret.

What is conditioning? It’s when the agent praises your home prior to listing and then continually points out the negatives after it is on the market.

How to get a rapid market response to your home

To put a property on the market takes effort. There is the effort in selecting the agent and marketingstrategy, the effort to prepare and present the property and then the effort to keep the presentation A1 throughout the campaign. It is demoralising when you go to all this effort and don’t even get an offer. 

If the seller's price expectations are out of line with the current market, agents have an abundance of tricks to cure the seller of their wishful thinking. Some of the tricks designed to drive the price down are obvious, such as conditioning where you are bombarded with negative feedback on your home, so that you emotionally detach from it and drop your price to ensure a quick sale.

The phantom buyer tactic is far more subtle than constant conditioning. It is the low offer from a buyer, a buyer that does not actually exist. 

There is another buyer...

Competition increases value. Agents know it, and they use it to achieve a better price. That's their job after all.

What is harrowing as a buyer is trying to work out the legitimacy of the agents often made claim that "there is another buyer".

As a buyer, if you swallow the "we have another buyer" message hook, line and sinker, it can cause you to react irrationally and potentially overpay. To dismiss the threat entirely can cause you to miss out on your dream home.

Neglected or maintained?

Owning a quality investment property over a number of years can do wonders for building your wealth. As capital growth and rental returns inevitably increase, the pain of owning an investment property begins to reap the desired return for landlords. The financial pain of transactions costs and establishing the investment property are behind you. Future capital gains and increasing rental returns are fruits to be enjoyed by the landlord. 

It was only a few years ago that bedrooms were being transformed into home offices and study areas were considered important as people began to work longer hours and have fewer children. The advent of the Internet made working from home popular too. 

Today, because the number of portable electronic devices utilising a wireless internet connection continues to grow, the need for a designated home office is declining. Free access to the internet in cafes, along with wireless hot spotting, has reduced the demand for 'dial up' and 'cable' connections in the home.

As a seller and a buyer

Knowing what constitutes a good agent, as both a vendor and purchaser, will assist you in achieving the best outcome for your sale or purchase of real estate in a stress free manner. Make no mistake; the wrong agent can turn a stressful situation into a downright dreadful situation. But a good agent can make a stressful situation tolerable and sometimes even enjoyable.

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