Create the Right First Impression

Tuesday, July 28th, 2009

A wise person has said, “There are no second chances at a first impression”. From the time potential buyers view your advertising, look at the pictures of your house, they will be forming a judgment about it. It will be hard to change that view later on – if the impression is somewhat negative the potential customer will have moved on to consider other properties, even if yours COULD have been a great one for them.

So before you put your property on the market, clean it up – concentrating first on the things that are easy to do which make it look better to people when they first come to see it. I don’t necessarily say do a big renovation project.  If its a rental property and the tenants have left, consider spending some money to get it looking better. Of course this all depends on your own needs and the market conditions at the time. But let me tell you why putting a little bit of effort in at first will help you, if you are not desperate for a quick sale.

One common strategy for property buyers and investors is to buy a house that is structurally sound and in a good location, but dirty and poorly presented – for a LOW price of course, and then to tidy it up over a few weeks and sell it for a quick profit if possible, or at least to rent it for better money and hold for long term gains. They say the profit is made when you BUY not when you sell. SO, if you are a seller, don’t be the one that OTHERS make a quick profit from. You could provide the service of offering a more polished product and thereby keep the profit yourself. Present your property properly and realise the proper value of your property when you sell. People don’t want to pay for potential – they will pay for a finished product.

Some Rules Here

If you need to do some renovations for best results, concentrate your efforts on COSMETIC renovations – not on structural ones. Make sure the walls are at least CLEAN – by washing them. If need be, paint them – preferable a neutral off-white colour for that clean new look.

Go for HIGH IMPACT lower costing changes wherever possible. It is possible to spend big money for things which won’t make much difference to the price the buyer is willing to pay.

Before Having the House Shown

Make sure the lawn (if any) is mowed and the ground whipper-snipped recently. Keep any bushes trimmed. Don’t let the garden be overgrown.  It might cost money or time to do these things, but if  you don’t, you’ll be losing more than twice the amount in the negotiations when you go to contract.

ALSO: Consider using a home staging company. Home stagers can make your home look super elegant by the way they present it. It can result in a significant difference to your sale price.

REMEMBER: Make your first impression count. You don’t get a second chance at a first impression. Its amazing how not only buyers, but also valuers are moved by the first impression they have of a property when they see it.

Tags: presentation, renovation
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Common Mistakes Made by Property Sellers

Friday, July 3rd, 2009

When selling your home or investment property, there are some common traps that many people fall into. To help you to get the best price for your property, we list some common mistakes that will cost you dearly.

Mistake #1. Pricing your Property Too High

Naturally as a seller you want to get the best possible price for your property. What happens if you set a very “optimistic” price on your property when you list? You do it with the best of intentions, thinking that no matter what price you list at, people will offer lower than that. But there ARE problems with this.

a. Buyers that might have been interested in your property otherwise will now think it is overpriced. Rather than make an initial enquiry, they will call about some other property. Many people will lose interest in your property before they even see it. If they had seen it, they just might have “fallen in love with it” and been willing to offer a premium on it over the true market value.

b. Your property may go “stale”. After a couple of months, buyers will notice your property has not sold. Many will be thinking “there is something wrong with this property”. This will only make it harder to sell.

c. Buyers usually ask, “How long has it been on the market?” We can’t lie about this. Think about how you would think if you heard that the property YOU wanted to buy had been on the market for 6 months! Would you offer close to the listing price? Of course not! You might well think, “For six months no one in the world has been willing to offer this kind of money for this property, and neither will I!”

d. When people DO come to see your overpriced property, they will have high expectations. If they are disappointed, they won’t be likely to buy. Again this works against you.

e. Agents will use the high price on YOUR property to sell OTHER PROPERTIES that they are listing. So you end up helping other people sell, while your property stays unsold.

f. The MOST interest for your property comes AT THE BEGINNING of the marketing campaign, when the listing is fresh and new. Everyone who wants to buy in that area and who has been scouring the major real estate portals will see that there is a new property. You want to make the most of that. The price needs to be attractive enough to get people calling up. Wait too long to list close to a fair market price, and your buyers have bought elsewhere, or they may have made a decision to ignore your property. Ideally, you want a bidding war on your property. This is easier to achieve if you start with a lower asking price, and many people are attracted to check out your property. Properties can be sold ABOVE the initial listing price too! Remember, too, that you don’t have to sign offers that buyers bring to you via your agent, even if they are at full list price!

g. If there are similar properties to yours listed for less, it is those properties that will be looked at first. Put yourself in the buyer’s shoes. Remember, real buyers are intelligent people also, who have gotten to the point where they can evaluate what represents value for money to them.

h. In a soft or falling market, if you list too high, you might be chasing the market down. If you really want to sell, eventually you will drop your price some. But by then, others have dropped their price even further. It would have been better for you to get realistic and professional advice from the start, and being guided by it.

In order to help our sellers price their properties correctly, we will provide a comparative market analysis showing past sales of similar properties in your area, and also taking a look at the listing prices of similar properties that are currently for sale. This will greatly help in providing you, the seller, with an informed opinion based on facts.

Mistake #2. Failing to Prepare your Home Properly

a. To achieve a great price, your home needs to be clean and attractively presented to all potential customers. If your property looks dirty or uncared for, you could EASILY lose thousands of dollars on the deal.

Make sure the lawn (if any) is mowed and trimmed, the garden is weeded, the floors, windows and walls are clean, the house is uncluttered and so on.

b. Make sure that the house is in good repair. If there are obvious problems, have them fixed. People will pay a premium for a property in which there is “nothing left to do”.

c. Always consider giving your house a fresh coat of paint on the inside before selling, if it may need it. Don’t leave that one for a home renovator to do – it is a relatively easy job, and one that can add many thousands of dollars of value to a home easily.

b. Smart vendors are using the services of professional HOME STAGERS. These people are experts in decking out your property with little finishing touches that make it look really classy and valuable. These services cost money, but can return much more to you.

Mistake #3: Dealing with Unqualified Buyers

If someone doesn’t have the finance to buy your property at a price acceptable to you, and is not likely to be able to get it, then they may be “lookers” but not “buyers”. Don’t make the mistake of signing a contract with someone who is unlikely to get the finance through. That would take your property off the market at a time when QUALIFIED buyers may have been willing to see it and make good offers on it.

Mistake #4: Believing everything Agents Tell You

I wish I could say that all agents are honest people who have your best interest at heart, but time has shown that this is not the case. Of course, there ARE many good agents out there. But you can’t go on first impressions and branding alone. Because lots of money is involved, some agents will allow themselves to BE DECEIVED (by their franchise trainers), so that they can DECEIVE others more convincingly.

a. You need to be careful when considering listing with an agent that he is not attempting to “buy the listing” by over-quoting you on the value of your property. If you fall for it, you will pay later, please see Mistake #1.

b. If agents want you to spend a lot on newspaper or magazine advertising, ask them what percentage of properties that they have sold were sold to buyers who came through such means. Sometimes a modest newspaper advertising campaign advertising OFIs or a small display ad can be useful. At other times the sole beneficiary of such advertising is the agent.

c. Beware of auctions. Unless it is a crazy rising sellers market, auctions can be expensive (the advertising costs and high agents commissions) and disappointing. They don’t always get a result either. At the time of writing, the auction clearance rate in Queensland is around 39%. For auctions to work, there needs to be more than one person quite keen on your property who is fully prepared to bid, with finance and building/pest issues already resolved in advance. That will limit the number of potential buyers who can go for your property. With less buyers competing, the result can be a lower sale price.

d. Some agents will tell you “We have a buyer for your property” in order to get the listing. Amazing! They have a buyer who has not even seen your property! Often all the agent means by saying “we have a buyer” is that they have a buyer’s database of people who want to buy in your suburb within a certain price range. And by the way, that database may be well out of date. Usually a proper internet marketing campaign on realestate.com.au and domain.com.au at the right price can attract a buyer. So it can be a case of “fake it til you make it”. If an agent says he has a buyer right now at a price you can accept, and you feel good about the agent, test him or her by offering just a 3 day exclusive agency agreement. Why should they object to that if they REALLY have a buyer for YOUR property right now?

Mistake #5: Failing to Negotiate a Fair Agent Commission

Is is written in Part 7 of the Form 22a official PAMD listing document:

The Property Agents and Motor Dealers Regulation 2001 sets a maximum amount of commission chargeable by your agent for residential property.

You have a right to negotiate an amount lower than this amount of commission. In any other transaction, other than residential, the fees and services are not regulated.

Did the last agent you spoke with about listing your property show you that clause. Do you remember reading it? Its worth taking into account.

Once your property is listed at a fair price, and put on the right websites, it can sell fairly easily. You don’t need to pay top dollar to agents if all they will do is dress nicely and open the door for potential customers. The difference between a capped commission agent and a full priced franchise agent can range from $3000 to $15000 or more! Make sure you are getting value. Value means obtaining a price higher than what you would have gotten yourself, or saving yourself valuable time by means of letting the agent handle the sale for a reasonable fee.

Now I am of the view that agents may well deserve the maximum allowable commission in certain cases. Where the property is in some sense unique, or high end, or difficult to value, an experienced and knowledgeable agent may well be worth even MORE than he is allowed to be paid under the Act. The results are what counts. But in many cases, where properties are of a similar nature, I don’t believe you need to be paying that maximum rate.

If you pay the maximum allowable commission simply because the agent you are dealing with is part of a big franchise group, you may well just be GIVING AWAY money. And somewhere in that hefty commission there may be the difference between a deal going through and a deal NOT going through.

Happening Real Estate is happy in most cases to work for a flat fee of $5500 or less including marketing, when we get an Exclusive Agency. In some cases, we will accept a higher commission when the value offered to the client is significantly greater. We are generally willing to conjunct with other agents also in such cases also.

Tags: auctions, property selling
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Things to Consider Before Buying a Home

Friday, July 3rd, 2009

Buying a home is an important event, it might be the biggest financial event in your life. You want to make sure you are well informed before making your decision.

Having bought and sold our own homes and investment properties in the past, as well as running a real estate agency, we would like to share from our experience with you.

We understand how difficult this decision can be, in scanning the market for days and months to find the right property, choosing the right finance, negotiating the best deal for yourself and going through all the paper work hassle. But if you are well informed in advance, it could be one of the best experiences of your life.

Buying your own home to live in

Buying your own home for your family can be a rather emotional experience, since it impacts on many aspects of your life. You have to consider many aspects:

Choosing the best area to live in

Ask yourself:

How far is it from your workplace?

How long will it take to travel to work every day and back?

How is the traffic in the area? Are there any freeways or motorways in close proximity?

How good is the public transport network in the area?

How far is it from places you are more likely to spend your time in (how close is it to where your family and friends live with whom you want to be in regular contact)

Are there any good childcare centres in the area? (for families with small children)

Are there any good schools in the area for your children?

Are there good facilities in the area (shops, parks, hospitals, etc)

What are the characteristics and the demographics of your neighbourhood which will impact on your possible future friendships and those of your children

What are the growth prospects in terms of capital growth for the particular area?

Choosing the Right House

Should I buy an established house or should I buy a new house and land package?

New houses might cost a little more at the beginning but they involve less maintenance and expense over the long term. They also mean less work on the house after hours. You need to weigh up the pros and cons.
What type of house to buy (lowset, highset, brick and tile, queenslander, old or new, how many bedrooms, bathrooms, land size, etc.)

What are my ‘must have’, my ‘would be nice’ and ‘I could do without’ features that I am looking for in a home?

Last, but not least: is it the kind of house that can be easily sold if we have to sell it in the future?

After viewing a number of houses:

Which house is meeting all my ‘must have’ and some of my ‘want’ features?

How does it compare price-wise with other similar properties listed in the area?

What is the best price to offer that would best suit my interests and also lead to an accepted offer?

What terms do I want to be included in the contract of sale:

- in how many days should I settle on the house?
- what are the fixtures that should remain on the property after the sale?
- what things I would like to ask to be left on the property after the sale?
- how many days should I request for finance approval?
- what other special conditions should be included in the contract?

We recommend raising all the above issues with your solicitor.

Choosing the best finance for you

Ask yourself:

Should I go directly to a bank or should I choose a mortgage broker? In many cases using a mortgage broker is a better choice, unless you have a special relationship with your bank manager, and are self-employed. Only use a mortgage broker who is paid entirely by the lender – you should not have to pay any fees yourself for the services of the mortgage broker. Good mortgage brokers are motivated to get the loan approved, and also should know which lender is best for you. It can make a huge difference.

Do I want a fixed rate or a variable rate? When they start raising fixed rates, its often a good time to fix. If they have been reducing fixed rates recently, its usually best to go for a variable rate in most cases. Talk with a financial advisor about this, don’t take what we say here as financial advice.

Should I pay off my house or should I only pay the interest? Normally its best to pay off your own residence as fast as you can because the interest is not tax deductible. Again, talk with your accountant or financial advisor.

If you are interested in us helping you find a property based on your particular needs, please see our BUYERS ADVOCACY service offer.

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Interest Rates fall in April ‘09

Friday, July 3rd, 2009

We’re all glad to know that the Reserve Bank has slashed interest rates again – this time by 1%. In talking with finance brokers and looking around I notice that there is now plenty of interest for properties under $400,000. Some of thee guys are starting to write a lot of business whereas a few months ago it was really dead.

It is again possible to purchase positively geared real estate in Queensland. If you are interested in engaging us as buyer’s agents to find you good deals which won’t put you out of pocket on a weekly basis, contact us using the link above and let’s talk.

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Falling Interest Rates Take the Pressure Off

Friday, July 3rd, 2009

We’re happy to note that the Reserve Bank of Australia has slashed interest rates yet again – this time by 1%.

On Monday 2nd December, 2008, The Reserve Bank cut one percentage point from its key cash rate to 4.25% in its latest bid to avert a recession. The move brought the cuts since September to three full percentage points, as the RBA changed tack.

According to an article on the Sydney Morning Herald, investors are “pricing in a further cut of about 75 basis points when the RBA’s board next meets in February, according to Credit Suisse figures”.

This is very good news for existing homeowners who may have been struggling to make repayments. It means we are less likely to see a wave of foreclosures across the markets, such as has been happening in the United States. I think people who own properties in capital cities are a lot safer than people who own expensive real estate in regional towns and areas which could end up being hit badly if the mining sector slows down due to an across the board fall in commodity prices.

What we are observing here in Queensland is that there is a good level of buying interest for properties under $450,000, and especially those under $350,000. But buyers are still a bit “spooked” and while interest is picking up, people don’t yet feel a strong urgency to buy “before the prices rise”. As rents have continued to rise while the cost of home ownership has come down significantly, we can expect that the levels of investor interest will start to pick up. Within a few months I expect that investors will be actively scanning the market for good buying opportunities and taking them.

If you are looking to upgrade or downgrade its a good time to act, because as long as you are buying and selling in the same market, it should make little difference WHEN you do it.

No one can say for sure which direction property prices will go in the next year. But if you are an investor, think about avoiding regions which depend on just 1 or 2 industries. If those industries go down, property will be hard to sell for a good price around them. I would say, all other things being equal, you are better off buying in Brisbane than any other place in the current economic climate.

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