|
'PROPERTY FOCUS' wi
th Peter Cox, co-principal of
Raine & Horne Kawana Waters
Need Advice?
Email your real estate related question to Peter at
pcox.kawana@rhq.com.au
and he'll anwser it in an upcoming edition of 'The Weekender' magazine
.
Below are some recent questions . . .
ISSUE 463
Q:
We’ve heard that our ‘first’ offer may be our best one. Is this true or false?
A: Any reputable agent will agree that your first offer should be treated with the utmost consideration. It’s important to understand that while your property may be a relatively new listing, the potential buyer might have been searching for the ‘right’ property for an extended period of time (sometimes weeks or even months).
Hence, when a new listing comes onto the market, they are quick to make an offer because they don’t want to miss the opportunity to secure your property. Generally these offers are considered to be at a price level normally referred to as the ‘fair market value’.
Unfortunately, many property owners reject these initial offers because they think that if they get an offer straight away, then surely there must be plenty of other buyers out there. It's disappointing to admit that I have witnessed many situations where they ended up selling several months later for amounts less than they were initially offered.
ISSUE 462
Q: Why do agents always suggest selling property by auction?
A: Quite possibly this is because the auction process has the highest success rate (approximately 80%) of all the various methods of selling.
By removing the ‘asking price’ it is common for a much broader range of buyers to inspect the property being sold. For example, you will attract those whose budget is below the anticipated sale price as well as those above it.
It is important to remember that Auctions aren’t just for selling property, they are utilised in many fields. In fact, any item of value, more notably artwork, memorabilia and race horses, are universally sold by the auction method.
The ultimate goal of an auction is to extract the highest possible price out of the buyer. When multiple buyers try to outbid each other, the item being auctioned can often be sold above the reserve price.
If you are thinking of selling your property, have an agent explain the Pro’s & Con’s of auctioning, because it can help you make a more informed decision.
ISSUE 461
Q: Does advertising the sale of my property really work?
A: Ever heard the phrase “You can’t sell a secret”? The basic premise of any type of advertising is that it provides the best known method to show the saleable features of the product to a specific or target market.
By actively promoting your property you are better placed to attract the attention and interest of prospective purchasers.
Selling real estate is often referred to as a ‘numbers game’. Put simply, the more buyers you attract to your home, the greater chance you have of getting a higher sale price. Advertising gives you a better chance in the numbers game.
The other advantage of advertising your home is that you can highlight special features such as pools, backyards & entertaining areas, that aren’t visible from the street. This is especially important if there are dozens of other houses on the market at the same time.
Lastly, it’s no good having the best priced property in town if no-one knows about it.
ISSUE 459
Q: My house has been listed for nearly two months without success; should I reduce my asking price?
A: Ideally, if you hadn’t experienced a positive response from potential buyers within the initial 2-3 weeks, this would have been the optimum time to address the price situation.
When a home is initially listed ‘for sale’ it is common for every prospective buyer in that price bracket to make an enquiry about it within the first few weeks. Our statistics show that the Buyer Activity Levels peak within this time frame before starting to rapidly decline around week 4-5. Persisting after this time with the same asking price is likely to work against you, rather than for you, as the initial momentum has been lost.
Therefore, in order to catch the attention of the buyers again, you need to formulate a plan. A successful plan should incorporate a price reduction as well as undertaking a marketing campaign to re-educate those who may have previously seen it at the higher price.
ISSUE 458
Q: What does your job involve?
A: My role as a real estate agent is to successfully match buyers to properties that are For Sale. It sounds deceptively simple, but you end up having to wear many hats in any one day.
One of our main tasks is to accumulate listings (properties); because without finding houses, units or land to sell we won’t attract any buyers. Building a proven track record is extremely beneficial in creating opportunities to ‘list’ properties, but the majority of agents find this to be the hardest requirement due to the length of time it can take to achieve.
As our industry is heavily regulated by the Office of Fair Trading, agents need to be professional, ethical and well versed in all aspects of the Property Agents & Motor Dealers Act. Throughout the day we can be found taking photos of properties; copy writing for advertisements; communicating with client databases; conducting on-site inspections with potential buyers; preparing contracts and most importantly, negotiating offers.
ISSUE 441 Q: What are the main differences between exclusive and open listings? A: The main difference is the number of agents you have engaged to do the job of selling your property. An exclusive agency runs for a maximum of 60 days and involves one agent being directly responsible for the sale. An open listing can continue for a much longer period (up to 12 months) and implies that you have instructed several agents to sell your property, or you can even sell it yourself. Whilst it is often perceived that more agents means more buyers, the statistics collected by the Real Estate Institute indicate that this is a common misconception. In fact, you are almost three times more likely to sell your home via an exclusive listing than an open listing. As a result, many agents tend to regard open listings as a lower priority whilst preferring to concentrate on exclusive listings. ISSUE 439 Q: How can I ensure that I select a good agent to sell my property? A: My first recommendation would be to start by asking your family and friends for advice or references, otherwise seek out experienced agents with a proven track record in your local area. You may choose to short list two to three, and then interview each of them when they appraise your property. When entrusting an agent to handle the sale of what’s typically your most valuable asset, you need to be confident in their ability to get the desired result. Therefore, ask them to list their real estate experience; request to see some testimonials from previous clients; and find out what sales strategies they will employ. It should also be worth noting that it’s not wise to select an agent based purely on their opinion of your property’s value. Quite often the agent that quotes the highest price has the least amount of experience, so get them to justify their opinion of value against recent sales from your immediate neighbourhood. ISSUE 437 Q: How do you find your buyers? A: Agents tend to source their buyers from a variety of areas which include: office databases, internet sites, newspaper advertising, sign boards, office window displays, etc. We start by identifying the ‘target market’ for a particular property (i.e. first home buyers, renovators, investors, etc) which then allows us to determine the best type of selling strategy to utilise. Quite often these incorporate a combination of the above mentioned mediums to attract potential buyers. We never actually know exactly where the buyer will originate from, so it is imperative that we pursue all avenues of opportunity. This will ensure that we find the one particular buyer that will pay the best price. A typical breakdown of our office sales indicates that approximately 20% of these come from our internal buyer database; another 25% from property internet sites; 40% from newspaper advertisements; and 15% from other sources (i.e. past clients, office window display, neighbouring property owners, etc). |