The following is a summary of the “Home Sellers Guide” to obtaining a higher price for your house in less time. Should you wish to discuss it further in more detail, contact Kerry.
Buy & Sell
When to Sell
Negotiating and Accepting Offers
Real Estate Terms
The Role Of The Real Estate Consultant
The consultant acts as an objective, experienced market reporter who provides advice on what the market may pay for your home and the easiest and most effective ways of reaching buyers. Their advice is worth listening to, as a good consultant acts only for you and in your best interests. The additional money that you gain through obtaining a realistic price, implementing an effective marketing plan and selling your home sooner will generally well exceed the cost of employing an experienced consultant. Some of the services they will be able to offer will include:
- Providing a market appraisal
- Advising on the best method of sale
- Assisting you in developing the most effective marketing plan
- Implementing the marketing plan
- Advising on presentation of your home to the public
- Bringing the property before as many potential purchasers as possible
- Presenting all offers
- Negotiating the best price with the purchaser
- Ensuring that all requirements in the official sale of your home are fufilled.
Selecting the right Real Estate Consultant
Here are some points to consider when choosing a consultant to work on your behalf.
- Do they place importance on high ethical standards?
- Are they well-trained in sales skills, negotiation and marketing?
- Do they have a wide range of marketing options?
- Do they have a good knowledge of local and wider market places?
- Does their company have significant sales activity?
- Do they have the support of a larger network?
- Do they keep full and on-going records of the sale’s progress?
- Do they provide weekly sales progress reports?
- Do they have testimonials from satisifed customers?
- Do they provide a guarantee?
When to involve a Real Estate Consultant
Ideally, the best time to involve the consultant is when you are making the decision to sell your property. You do not have to sign with a consultant to take advantage of their advice. A good consultant has expertise and should be able to clarify your position with a few well-chosen pointers. Once you have made the decision to sell, the sooner you place your property on the market, the more opportunities you will have to sell. New buyers enter the market every day and yours may be just the home they are looking for, so having your chosen consultant working for you as soon as possible is extremly helpful.
Types Of Agreements
When you do decide on an agent, you will be asked to sign an Agency Agreement. You’ll find it will contain the fees you can expect to pay the agent when your home is sold.
Before you sign any agreement with an agent, you should read it carefully and make sure you understand it and your obligations.
There are several kinds of agreement and real estate agents will happily tailor one to meet your needs.
The main agreements are:
AUCTION: The Auction process provides you with a high profile marketing campaign culminating in a public auction on a pre-determined date where interested parties bid for the right to purchase your property unconditionally. The objective is to obtain the best possible price, in the least possible time, with the least amount of concern to you. Your property is marketed without a price prior to Auction.
TENDER: A tender is similar in most respects to an Auction, but instead of purchasers bidding for your property they submit sealed offers (tenders) which are opened on a pre-determined date. This method is very private and confidential as no one else knows the amount of the tenders. Offers may be conditional and you have the right to reject or accept any offer. Your property is marketed without a price prior to Tender.
EXCLUSIVE: It is essential that someone takes the responsiblity for the marketing of your property to achieve the result you want. Our tailor-made Exclusive Marketing Programmes offer you this opportunity. There are two options available: Marketing without a price or Marketing with a price.
In order to test the market your property can be offered for sale without a price. Purchaser responses will be conveyed to you in order to establish a true market value for your property, thus minimising the risk of underselling. Alternatively, we will provide you with a market analysis to establish a price range for your property so that you can select an appropriate price at which to market your property.
GENERAL: A general listing is where your property is listed with more than one agency and therefore no-one takes the responsibility for the marketing. Minimal advertising and feedback is offered, if any, and there is a possibility of underselling.
PRIVATE: You may wish to consider selling your property yourself, however surveys indicate that unless you are experienced in marketing and negotiating you run the risk of underselling – not to mention the stress and security risks involved.
Your Real Estate consultant can assist you in selecting the most suitable type of agreement.
What Is Your Property Worth?
This is one of the major decisions to be made, and it is vital that a sound strategy is used in setting a price that can assure you of two things:
Through expert local knowledge your agent can establish a realistic price for your home based on its location, age, size, features and market variables such as interest rates and the availability of financing.
Avoid the temptation to be influenced by the experiences other people have had in the sale of their homes. The sale price of your home should be based on prices achieved recently on similar properties within your neighbourhood.
Question the motives of anyone who may suggest that you could obtain a higher price. Remember the true value of your property will ultimately be determined by the purchaser.
Pricing for the Market: If your price is too high, you could shut off the most important ingredient of real estate selling – a constant flow of qualified prospective purchasers who are looking for homes in the price range you establish.
Overpricing may give purchasers the wrong impression and they may look at your property with higher expectations. Others will quickly reject those they perceive to be overpriced, often not even bothering to inspect them.
While a prospect might submit a lower bid and give you a price to at least begin negotiations, this certainly won’t happen automatically. Many prospects are embarrased to make offers that are substantially below your asking price.
Buy & Sell
In any buyer/ seller relationship it’s normal for the seller to ask his or herself “I wonder if I could have asked for more?”. On the other hand the buyer may question whether he/she could have paid less.
The professional art of negotiating for the best price is a skill that your agent should have mastered. Knowing when the time is right to stand firm requires specialised experience. One key of obtaining a speedy, successful sale, of course, is starting with a realistic price in the first place.
Time is Money
When it comes to selling your home time is money.
Everyday a home does not sell because it is incorrectly priced, can mean extra expenses that the owner has to incur for repayments of principal, interest, taxes, insurance and maintenance, and a home that is on the market too long because of an uncompetitive price, sends out signals that ‘something must be wrong with it’.
Your agent shares your interest. Remember, like you, he/she has a keen interest in getting the best possible price for your home. Sound, up-to-the-minute market experience provided by the agent will help your home to sell!
Consultants can prepare a comparative market analysis of recent sales and, by comparing your home with similar properties, give a good indication of a fair market price.
First Impressions are Lasting
Keep it Clean:
From the moment the prospects arrive they should notice that the gardens and lawns are well presented. Garden rubbish should be disposed of and paths and porches kept clear and clean. Toys and garden tools should be stored away.
While you’re cleaning: Think about each room and what furniture really needs to be in it. Rooms look smaller when they’re crowded with excess furniture and general clutter. Clear out anything not needed to create a feeling of spaciousness. Do not forget your cupboards – keep them neat and not too full.
Get all minor repairs completed:
Sticking doors and windows, loose door knobs, faulty plumbing or peeling paint may contribute to a negative impression and affect your sale.
Let the sun shine in:
Plenty of light in your home adds instant appeal, with nothing improving atmosphere more than brightness. On a dull day, switch lights on prior to arrival of prospective purchasers, including warmth-adding lamps. Fresh flowers or indoor plants always brightern up a home.
Built for comfort:
A warm, comfortably heated home on cold days, particularly if you have an open fireplce, adds a feeling of cosiness; while on a hot day don’t forget to turn on the air conditioner or fan (or simply let the breeze flow through). You may like to set the dining table, have the coffee on, or maybe have someting like muffins baking in the oven, to give your property a cosy atmopshere.
Minimise the impact of music & pets:
It is advisable to turn off radios and television sets during inspections as they can be very distracting. However, relaxing music playing softly in the background can add atmosphere. Keep your pets out of the way (preferably out of the home). Disturbances can be very counter- productive as your prospective buyer and consultant discuss matters.
Inspections: Threes a crowd – avoid having too many people present during inspections.
Silence is Golden: Leave the consultant to do the talking unless a prosepctive purchaser asks you about the local area, schools etc.
Work as a team: You and your consultant should always work this way. If you feel your consultant has overlooked some important selling points, feel free to discuss them privately, perhaps over a phone call to the office.
When to sell
When Is The Best Time To Sell?
Any time you’re ready of course, but spring is often considered a time of optimism and with the weather clearing, more potential buyers will be out and about. The prospective purchasers will have greater choice with more vendors placing their property on the market. Winter usually presents fewer buyers, but those that are out there are goal-focused and traditionally there will be less choice and therefore less competition.
Would I Get More With Improvements?
Generally, while improvements may make your home more saleable, they will not necessarily achieve a better price.
Make Some Useful Lists
It’s a good idea to highlight the points about your property in list form that you feel are the key advantages.
This will assist in determing what’s for sale in and around your home and what’s not, For instance, inside the home, fittings and fixtures that are easily removed without damage such as decorative light fittings, wall units, ceiling fans, waste-disposal units, heaters and drapes need not necessarily be included in the sale, but if they add value, you may decide to include them. Outside, consider things such as TV aerials, barbeques, clotheslines, outdoor lighting and pool fixtures. When it comes to the appropriate time, your consultant can help make a checklist of the relevant features of your home.
It is important to make sure everyone is clear on what is included BEFORE your home is put on the market. Any exclusions need to be written into the contract.
Reaching Potential Buyers
Selecting the best marketing plan to ensure your home is exposed to the maximum number of buyers is important in achieving the best price.
A good consultant will advise you of the right advertising mix, including the local newspapers and magazines to target areas which contain the most potential buyers for your type of property. Real estate magazines are another tool used by consultants – some will take space in an existing publication, while others may publish their own. Your consultant will probably suggest a letterbox campaign with cards or flyers of your property distributed to the appropriate areas.
Other Methods Of Getting Your Property Seen
An increasingly important medium is the internet. Potential buyers from anywhere in the country or the world can look at photographs of your property, sometimes inside and out, and decide whether it is of interest before contacting the consultant.
Lugton’s Real Estate has a website which has full search capabilities. This means that you can visit your Lugton’s office to view properties in all locations within your price range which include the features that meet your criteria, thus eliminating those properties which may be unsuitable.
Open homes are also a popular way of marketing your property. Your agent will invite inspection of your property for a limited period of time, usually on a weekend, and anyone interested can look over your home during the ‘open hours’.
Negotiating And Accepting An Offer
Always have the consultant handle the negotiations. If you are approached directly, then it is wise to politely redirect the prospective purchaser to your consultant, who will present all offers to you in writing, for you to either accept or counter at a price aceptable to you.
If the purchser does not wish to accept your ‘counter offer’ then they can withdraw their original offer.
When considering an offer, take the following into account:
- Suitability of the deposit
- Terms of finance (either cash or subject to finance being arranged
- Settlement date.
Accepting the offer
Once you have agreed on the price, the contract which had been initially drawn up can now be signed and normally a 10% deposit will be paid by the purchaser with the balance due on the settlement date agreed.
In the case of purchase at auction, the deposit must be paid and contract signed on the day of auction. The deposit will be held in trust by your agent.
The purchaser may wish to organise an inspection of the home by a valuer or a building consultant. This will be included in the contract. Once the contract is signed, it is a legally binding document. Normally a solictor will handle the sale, as they are experienced and knowledgable concerning this complex process.
If you don’t have an appropriate person to handle the sale, your agent will help to find one as they will have local contacts that they can recommend.
As part of the sale process, arrangements will be made for the balance of this deposit to be paid directly to you, or if you request, to your solictor. The agency will deduct the commission and, if applicable, any advertising costs. The balance of the settlement proceeds will be paid by the purchaser’s solictor to your solicitor.
Settlement day is the point at which the keys are handed over to the purchaser and the property becomes their responsibility. It is important to note that up until final date, the property is still legally yours and therefore matters such as insurance and property maintenance remain your responsibility.
Common Real Estate Terms
What you own.
Sale of a property in public to the highest bidder.
Breach of contract
Breaking the terms of a contract.
A system of building in which a structural timber frame is tied to a single brick external wall.
A short-term loan, usually at a higher rate of interest taken out by people who have bought a house while waiting for theirs to be sold, or when a normal mortgage and their savings fall below the asking price.
Designed to uphold the standards of public safety, health, and construction, these regulations are in place and have been formulated by local councils to control the quality of buildings.
Is a document any person with a legal interest in a property can lodge with the Titles Office to ensure the property is not sold without their knowledge.
Latin for ‘Let the Buyer Beware.’ This puts the burden onto the buyer to be satisfied with the item before purchasing a property.
Certificate of Title
Legal proof of ownership of a property, carrying the owner’s name and other information.
The removable items that come with your house, such as carpets, curtains, light fittings and sometimes furniture.
Fee payable to real estate agent for selling a property by the person authorising the sale. Usually a percentage of the sale price.
Areas in strata-title / unit title properties shared by all owners.
This title applies when owners of flats in a block form a company. Each has shares in the company which owns the land and buildings. The owner of the shares is entitled to exclusive occupation of a flat. However, if you want to alter occupancy in any way, you must have the company’s approval to do so. See your solicitor before buying.
An offer with conditions that must be met before everything becomes final. Both the buyer and the seller can put conditions, such as checking the Certificate of Title, getting finance or a building consultant’s report, for example.
Contract of Sale
Written agreement setting out the terms and conditions of a property sale.
Legal process of transferring the ownership of a property from one person to another.
Conditions affecting the use of land or property written into the title.
Cross Lease Title
This title gives you ownership of a piece of a larger property. You have a sole right to a particular unit and can normally sell or legally dispose of your unit as you desire. You also have an undivided share of any common land.
Usually 10% of the purchase price of a property placed in trust as evidence of intention to buy. The deposit goes towards the purchase price when the sale goes through.
A right held by someone to use land belonging to someone else for a specific purpose. Mains, drains, and water pipes are usually covered by an easement.
When a building overhangs someone else’s property, or a fence is built over the dividing line between two properties.
An easement, mortgage, or other liability on a property which impedes it’s use or transfer.
The money you yourself have in your home (it’s what you end up with if you sold your home and repaid any loans you owe on it).
One agent or agency has the exclusive rights to sell a property.
Fixtures and Fittings
Items that are considered part of your home because they are permanently attached in some way – by nails or wires for instance (such as the oven or built in cupboards or shelves).
Flat Interest Rate
Is calculated on the original amount of the mortgage for the whole term of the loan.
An owner’s interest in land where the property and the land on which it stands both belong to their owner indefinitely.
Loan on which interest only in paid periodically and the principal paid at the end of the term.
Lists of items occasionally included with a property for sale; such as appliances, furniture, furnishings and other removable items.
The purchase of an asset, such as real estate, with the ultimate goal of producing capital gain on the resale of the asset.
Joint Tenancy is the equal holding of property by two or more persons. If one person dies, their share passes to the survivor/s.
Land Information Memorandum (LIM)
When you are buying a home, you can get a report from your Local Authority which sets out everything they know about the property – things like consents, rates owing, drainage and problems with flooding or erosion.
A document granting possession of a property for a given period without conferring ownership. The lease document specifies the terms and conditions of occupancy by the tenant, including period of occupancy, rent payable, etc.
The interest in land of a person who owns a lease granted by a freeholder.
Your outstanding debts or what you owe.
The number of years it will take to repay a home loan completely.
The last day of the term of the home loan agreement. The home loan must then be paid in full or the home loan agreement renewed.
Legal agreement on the terms and conditions of a loan for the purpose of buying real estate. (A Mortgagee lends the money to a mortgagor, the borrower).
One who lends the money for the property.
One who borrows the money to purchase property.
Member Real Estate Institute of New Zealand – every real estate agent should be a member. The Institute provides training for agents and sets the rules and ethics they should operate by.
System of selling the property through many agents. The buyer pays only one commission, this goes to the agent who lists the property on an official multiple listing form for other agents (if the agents sells the property), or is shared between the first agent and the agent who actually finds the buyer.
Offer to purchase
A formal legal agreement which offers a specified price for a specified property. The offer may be firm (no conditions attached) or conditional (certain conditions apply).
Option to Buy
Legal agreement giving the buyer the right to purchase property at a certain time and price. Option fee, usually one percent of price, is payable and forfeited if buyer does not go through with the transaction.
Wall separating two adjoining properties and normally straddling the boundary.
This shows the house plan design, elevation of house, number and size of rooms, kitchen, bathrooms and laundry layout, position of the house on the land.
The actual amount of money that has been borrowed to buy a property.
The seller does not engage an estate agent but acts on his own behalf, dealing directly with the buyers.
Private Treaty Sale
Sale of property via an agent through private negotiation and contract.
Land, with or without improvements.
Requisition of Title
The process in which the buyer of a property asks for written information about the title to a property from the vendor in addition to that supplied in the Contract of Sale.
Price below which an owner is not prepared to sell at auction.
Right of Way
Right of access across a property.
Sale and Purchase Agreement
This is the contract between you and the person selling the house.
Property offered as backing for a loan. In the case of a home loan, any equity and the property itself usually acts as the security.
Two buildings joined by a common wall.
Completion of sale when balance of contract price is paid to the vendor and the buyer is legally entitled to take possession of the property.
Strata Title / Unit Title
Most commonly used for flats and units, this title gives you ownership for a small piece of a larger property including ‘air space’. You have sole right to a particular unit and can lease, sell or legally dispose of your unit as you desire. You also have an undivided share of the common land. You also become a member of the Body Corporate which controls maintenance.
Confirmation of the property boundaries and improvements.
Tenants in Common
Tenancy in Common is the holding of property by two or more persons, either equally shares or unequal shares. If one person dies, the property is dealt with in accordance with the law.
Sale of a property where the final sale price is private. Similar to auction but without a public auction.
The time length of a home loan.
The process of examining the land title to ensure the vendor has the right to sell and therefore transfer ownership. A title search details the names of the owners and other information about the property such as encumbrances or caveats on the title.
Document registered in the Land Titles Office recording change of ownership of a property.
Property free of covenants or other restrictions.
This means that when you get ownership of your home there will be no tenants living there, or leases giving someone else use of the property.
Assessment of the value of a property given in a written report by a registered valuer.
Variable rate loan
A home loan for which the interest rate changes as conditions remains the same for a specified period. However, the amount applied towards the principal changes according to change in interest rate.
Person offering a property for sale.
Control of the use of land exercised by local authorities or the responsible planning authority.