Tips for buyers and sellers
Whether you are a buyer, a seller, or both, here are some tips that will stand you in good stead.
BUYERS
Get your finance sorted
This is a highly competitive market. When you get the right opportunity you need to be able to act fast, whether you’re buying at auction or by negotiation. While it’s an easy trap to fall into, you really can’t afford to leave your loan approval until the last minute; it should be the first thing you do.
Become a local expert
Resist the temptation to search too wide. Pick three or four neighbouring suburbs and make it your mission to become an expert in the local property market. Before you are even ready to buy, go to LOTS of open homes. Get to know the local agents and follow up on what various homes sold for by texting the agents. You will soon be able to walk into an open home and make a surprisingly accurate assessment of its likely value.
How easy will it be to sell?
Even as you are walking into an open home you should be thinking about selling it, because one day you might have to. Is there anything special about it? A view, a cul-de-sac, close to a kindergarten, great local schools, access to beaches? Something for someone to fall in love with and make them want to buy it rather than another home nearby? If a home is just like all the others it becomes a commodity and the only way you will sell it quickly is by selling it cheaper than the others.
Think like an investor
Right now your priority may be finding the right lifestyle or the perfect place for your family, rather than viewing your home as a critical investment. Which is understandable, but it’s also important to remember that it will become a key asset, and you have to do everything possible to buy it at the best possible price and achieve the best possible capital appreciation. Negotiate hard and be ambitious about future capital gain.
Be philosophical
Whether you’re a first time buyer or an old hand, buying a home comes with a roller coaster of emotions. Try not to fall hopelessly in love with a home before it becomes yours, it just makes the disappointments harder. You may bid at multiple auctions, only to lose out to higher bidders paying well above the market price. Remember, there is always another home around the corner.
SELLERS
Decide whether to use an agent or sell privately
Know all the costs and options available to you. A full-service agency will typically charge three to four percent of the sales price plus GST for their fee. That’s up to $20,000 on a $500,000 house. There are other options; from cut-priced agents, to DIY selling. But be realistic about your own limitations. If you’re already far too busy as it is, open homes, following up on buyers enquiries and late night negotiations might just be a few responsibilities too many.
Choose an agent that is right for you and your home.
If you do decide to use an agent, pick one that would impress you if you were a buyer. Get recommendations from friends and family. Go to the websites of your local agents, read their individual profiles and see how they communicate and market themselves; they are going to be using those same skills to market your home. Shortlist three that strike you as people you could picture yourself working with, then see if you still feel that way after you have met with them.
Do your price homework before you call any agents.
Before you invite agents to appraise your home, try and have a go at it yourself. In other words, you need a ball park view of the value of your home, so you can question the varying price assessments that the individual agents might present. It’s well worth getting an e-valuer report from www.qv.co.nz or similar, to give you an approximate sales range. Beware an agent appraising your likely sales price much higher than the others, they may use that to win your listing, only to whittle your price down when it doesn’t attract appropriate offers.
Be aware of the pressure of auctions
Auction days are high-pressure affairs for all concerned. Sellers often don’t realise that agents can spend as much time persuading them to reduce their reserve price, as they do pushing buyers to increase their bids. If you really don’t want to lower your reserve, don’t attend the auction.
Be philosophical
Sometimes there’s no rhyme or reason to why buyers don’t seem to see the same value you do in your home. Maybe the wrong buyers are in the market, or you happen to be up against some stiff competition from other local homes for sale. Don’t take it personally, new buyers enter the market every day, and tomorrow is another day.
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This article is intended as a general discussion only. BNZ recommends the recipient get independent advice. The views expressed are the writer’s own and do not necessarily represent those of BNZ or its related entities.
