Having made the decision to sell your property, you will want to maximise your returns. Here is Your Investment Property’s comprehensive rundown on what to do to ensure the best possible sale.
So you have made the decision to sell your property… It should be a relatively easy process – right? Wrong. While the steps involved in selling a property might seem straightforward, there are hidden traps awaiting the unwary, or novice, vendor. And falling into one of these traps can have a big impact on the returns a property earns.
To start with, it is not a good idea to tackle the sale yourself. It is one of the biggest financial transactions most people make in their lifetimes, so getting the right advice on marketing, pricing and presentation will help achieve the best outcome.
Don’t DIY a property sale – go through an agency, Results Mentoring coach Brendan Kelly warns. “It costs, but agents can negotiate better than most vendors. There is always a risk that the buyer could be a good negotiator and things might not work out in your favour. If you have got a good agent, that sort of problem is not an issue. And the costs to you for doing so might well save on your commission.”
Selecting an agent
Once potential vendors have accepted that paying an agent is the most effective way to go, they then have to select the right agent. Making this decision is crucial. Select an underperforming agent and it could have a significant impact on the outcome of, and profits from, your sale.
There are two types of agents – one works for the seller, while the other works for the buyer, Kelly says. “You want the first type, someone who is an advocate for you as the seller. You also want someone who is hungry for a sale for you.”
It is often worth selecting one of the major players in the area because more clients will go to that agent and that means more potential buyers, he continues. “Selling effectively is like a funnel… The more people who see the property being advertised, the more there are likely to visit and be interested in buying. So you want to create that funnel.”
He also suggests treating agents in a “serial monogamy relationship sort of way” – by which he means that vendors should opt to sign short-term contracts, not longer-term ones, with agents. “A good agent should be able to sell a property in about six weeks, so you don’t need a contract that is longer than that. Relisting a property with a different agent can often work well for a seller.”
If you want to get the best bang for your buck, don’t use emotion to choose your agent, Renovating for Profit CEO Cherie Barber says. “Many people select their agents because they are friendly. This is a big mistake. It is a business decision. You shouldn’t want someone to be your best friend – you should want someone who can sell your property for the best price.”
Rather than relying on personal feelings, when selecting an agent think about key issues like the number of active buyers they have on their database and how many properties they have sold in the street and in the suburb, she says. “You have to sift through the agents who say they are great and talk themselves up, and select an agent who will actually deliver. Too many people oversell themselves, so do due diligence to establish the effective agents in an area.”
Listing at the right time
Another key early consideration for a vendor is deciding when to put their property on the market. Getting the timing right is crucial because if a property stays on the market for over eight weeks it reflects badly on the property itself. While many people realise that selling in a ‘boom’ market is a good idea, many don’t realise that different times of the year can have a positive or negative impact on a sale.
For example, it is generally accepted wisdom that it is a bad idea to put a property on the market in the weeks leading up to Christmas. This is because potential buyers are busy with the Christmas season itself, which means house-viewing traffic drops off radically.
Kelly recommends taking a property off the market over the Christmas period. “Instead aim to sell around the back end of winter, just moving into spring. That is when more buyers are around, but many sellers are still hibernating. The demand is higher around July than at other times in the year.”
If you have just renovated a property, you need to think about seasonal peaks and troughs, Barber agrees. “Maybe don’t put the property on the market right away if you finish it towards the end of the year. Because if a property lingers on the market, then it attracts a ‘lemon’ tag, which you don’t want: people assume you are desperate; they will haggle, and you won’t get the best possible price for the property.”
Setting a realistic price
Working out a realistic selling price for their property is the next step for a vendor. This involves conducting significant research on the area the property is in. Factors like location, aspect, noise, traffic, proximity to amenities, neighbours, school district and the current state of the local market all need to be considered. A thorough and pragmatic assessment of the property itself should also be involved.
Setting a price based on emotional attachment to a property is wrong, Kelly says. “Just because you think your property is amazing and the best in the area, it doesn’t necessarily mean that it is. That’s why it is essential to know what the market actually sees your property as worth.”
To establish this, he recommends talking to local agents as both a vendor and as a potential buyer. Agents will oversell to vendors but undersell to buyers, he says. “So take the agent feedback received from both lines of enquiry and then work out the average price from the information as a whole.”
Before listing and marketing their properties, vendors also need to decide whether to sell in an auction or via private treaty or negotiation. According to Kelly, auctions create a sense of urgency and intensity around the sale. “They force decisions to be made and increase the level of emotional buying, so they can increase the price a property sells for.”
However, he adds that if a property doesn’t sell at auction it can create the impression that there is a problem with the property. “For this reason, vendors should opt for a private sale if they are not in a hurry to sell.”
Creating an impression
Ensuring a property is presented in a way that shows off its features is a key element of the sales process. First impressions count for a lot with potential buyers, so vendors should do all they can to make their property stand out – in a good way.
First of all, make sure your property is spick and span, and that any renovations are complete, Renovating for Profit CEO Cherie Barber says. “Don’t leave anything unfinished or untidy-looking. It is unnecessary and will put a dent in your returns. Properties should be completed in their entirety. Make sure that everything needing to be done is actually finished.”
It might sound obvious, but this includes minor repairs as well as major ones. This means doing things like fixing leaking taps, oiling hinges on doors, and putting fresh paint on scuffed woodwork. It also means attending to any land connected to a property, so weeding the garden or sweeping up leaves, for example.
The essentials: styling and communication
Property styling is essential because it creates an illusion that people want to buy, Barber says. “While you should declutter a property, it is a big mistake to show an empty house when you are hoping for a sale. People like to be able to visualise things. It is too hard to arouse emotion in potential buyers if you show empty rooms.”
Further, if a property is empty and unstyled, potential buyers are going to look at what is actually there, be it walls or fittings, she continues. “There is nothing there to distract them, so they are more likely to see any possible defects, even small ones, that are there. It is near impossible to get any property perfect – especially older ones – so you don’t want that.”
Always bring in a professional to do the styling for you, Barber emphasises. “You simply can’t do it as well as a professional stylist. They have that special knack which brings a property to life. Also, without styling, properties take longer to sell and go for a lower price. So styling does end up paying for itself.”
Finally, she says it is a mistake to assume your agent will tell potential buyers about every single aspect of your property, even though you expect them to. Her solution? Provide laminated ‘selling cards’ that detail the features and renovations of every room.
“It makes potential buyers feel like they are getting full disclosure and real bang for their buck,” she says. “Plus it is something for them to remember, and understand, about your property as opposed to others. Essentially, it is about good information and communication.”
Once a property is styled and ready to go, it is crucial for the vendor to market it effectively to generate as much interest as possible, says Jacque Parker, president of the Real Estate Buyers’ Agents Association of Australia. “The number one way to do so is via internet advertising. Up to 90% of buyers use RealEstate.com.au and Domain.com.au to look at real estate.”
However, she believes it is also worthwhile to run a print campaign of sorts. “For example, flyer campaigns targeting streets surrounding the property can still be very effective. There is often a high level of interest among neighbours.”
Websites are the most common resource employed by potential buyers to find properties, says Arthur Charlaftis, general manager of sales and operations at RealEstate.com.au. There are three things he advises agents and vendors to think about to optimise their online listings.
“First, ensure your listing stands out from the crowd. Second, include an indicative price range: 66% of consumers say they overlook listings without a price. And third, have plenty of high-quality professional images.”
Photos are integral to drawing potential buyers in and getting them interested in your property, Charlaftis adds. “Make sure the shots you use are professionally staged and shot and, if necessary, add more throughout your online campaign to keep buyers interested.”
It is also essential to spend time getting the copy accompanying the pictures right, according to Brendan Kelly. “You need good marketing copy written by who really can write. Pay someone if necessary because you want words that convey and reflect the ambience, joy, and warmth of your property and the lifestyle that comes with it.”