by Grant Wakelin
From time-to-time we invest an hour or so on the Trade Me Real Estate message board reviewing and commenting (where appropriate) on the questions and dialogue. The theme of this series was selling privately, but we also looked at Council Valuations affecting asking price and what other online advertising options are available in addition to Trade Me.
Let's get straight into it.
How Hard is it to Sell Privately?
Selling your home yourself is not for the fainthearted, but it not impossible. Many people in fact do it - NZ real estate statistics are not the best but at a guess around 10-15% of sales each year are done privately(or at least outside traditional real estate agents). A timely question of course because we've just released our Private Sellers Guide. The point is to go into the process with a plan (we outline a 6 step sales process), do the job professionally, and know your own limitations (in time, skill sets and experience). It is the largest financial transaction most people undertake - it is worth treating with some caution. As a final plug, we had to end the answer with: If you want a complete guide on how to sell privately we have one available here. It's free.
On to the second chat session - moving on from selling privately to finding the right agent.
Find the Best Agent to Sell Your Home
Well we love this one of course. The chatter on the board was interesting, with various pieces of advice - including of course being TradeMe selling it privately. Our aim is also to provide objective advice - here is what we said: Look for the agent that best meets your requirements. Obviously decide on what those requirements are up front. Don't just go for the highest appraisal - someone buying your listing is not what you want. The best marketing plan, the best negotiator, the best services for a price you are prepared to pay.
Don't just look at traditional agents - there are hybrid people out there now too (obvious self plug - but not just us).
Or if you want to think about selling privately we have an almost 50 page guide here that may be of use.
The next interesting message session we came across was looking at agency terms and conditions - specifically whether someone should renew their exclusive agency or allow a general agency to continue.
General vs Exclusive Agency
Here is what we said to this question: The terms of any agency agreement are negotiable - you can require whatever services you wish to be included - for example open homes (whether or not it is general or exclusive). The agency doesn't want to do general - they prefer to focus on exclusive listing (called 'controlled" listings in the industry because you can't sell anywhere else). A general listing means they face the risk of advertising the property but someone else selling it.
Maybe it is time to have a look at other options as well.
Happy to chat directly if it is of use.
The message we were trying to conve here was that the agency agreement defined the services the agency will provide to you. It is not (certainly not at $20,000 a pop) a standard agreement where you have to just accept what is given. The REAA has been clear in its guide to agency agreements that the terms are negotiable.
For a breather we jumped into a marketing question - specifically where, besides TradeMe could an owner advertise their property for sale
Where Else Other than Trade Me?
This is a cattery/kennels for sale, currently listed as a residential home. As we have commented before your advertising always needs to be targeted to a specific buyer. Which is why we recommended they add it as a commercial option on TradeMe. Of course we added that "the other (agent only) site is www.realestate.co.nz - if they got professional pics done you could add Open2View's site which can be quite popular. Position the two options differently though - on TM lifestyle pitch it as a home first. On the commercial site focus it as a lifestyle business".
There are other places that you can advertise a property that are 'non-traditional'. It again requires you to consider exactly who the buyer is and look for where they are located. In this case we suggested that "the other option is cattery/kennel specific groups/sites. Get the fact you are selling into newsletters and/or websites specific to the industry. Google adwords are an option for that too - cost effective and targeted".
The next area we turned our attention to is the ongoing debate over CV's and whether they affect the price of a home.
The Effect of Council Valuations on House Prices
The answer to this, of course, is 'no it should not' affect the asking price, but the reality is whether you like it or not buyers look at CV. While a CV is calculated for the purposes of rating it is a market valuation at a specified point in time and is a consistent methodology applied across all houses in the District.
It is important to recognise that the relevance is not the CV itself, but what variance recent sales have to the CV. Are they on average selling 5% above, or below, or whatever. For this specific property we added "in general houses in Rotorua are not selling that far above CV. But that doesnt mean the one you are looking at wont. Maybe there has been improvements not yet reflected in the CV, or something else that was missed when it was calculated. The key is to understand the rationale for the difference. It is one datapoint to consider".
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