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Where to from here? Buying and selling property in 2020.

Where to from here? Buying and selling property in 2020.

It is no illusion that local and offshore financial commentary has been pointing toward another probable global recession, with 2020 being in the crosshairs for such a widely anticipated event. Another ‘correction’, similar to the 2008 GFC with many renditions of the effect this may have.

However, it seems we were all looking the wrong way on this occasion with an unquantified player stepping onto the court unannounced. Covid-19 will undoubtedly have its own agenda for our planet in its own right and must surely be an unwanted catalyst for fuelling any prior predictions, regardless.

Let’s keep it real from the get-go.

This situation will not have a favourable outcome in many ways, property matters included. Human loss from a global viral pandemic has not been a significant factor in prophetic economic forecasting. It had not been a consideration within our current speculation mentioned above, or in 2008; nor was a simultaneous catastrophic global business failure, mass global unemployment, or international country isolation – on a biblical scale.

Our immediate situation will not be business as usual. For anyone to bounce around in the ‘this will come right before Christmas’, or ‘it will all be OK next year’ is just heading towards mega disappointment at great speed.

We know this. We lived through the GFC aftermath from 2008.

In addition, Cantabrians know only too well what additional effects an untimely ‘rogue’ component has on a recovering economy from the 2010 – 2016 earthquakes in this region. Confronting the brutal reality of your own situation is vitally important at this time, making a plan and rigorously implementing it to survive each day; mentally, emotionally, and physically must be an immediate priority.

The full fallout has not arrived yet, there is rough water ahead. It is unavoidable. This is not the first time we have had an uncertain property market and it will not be the last.

To be fully prepared, the worst outcome has to be at the forefront of any practical thinking.

Should selling your property becomes a consideration for any reason, do not delay in getting an assessment on where the current market value may sit. Time will be a significant factor in this unpredictable climate, do not underestimate this. Be decisive.

Our expertise is in facilitating the successful sale and purchase of a property. We have parties lined up for site viewings of our stock in this coming ‘level 3’ week. Getting a real flavour for how the market is going to react first-hand, will provide an opportunity to verify the conditions we may be about to experience. As a Professional Consultancy, (not just a sales office), we will not be sugar-coating anything that would otherwise benefit our agency at the expense of our clients’ wellbeing. Understanding any immediate or foreseeable market shift will determine how we progress.

Dividing realistic fact from idealistic fiction has never been more important. This is a minefield, let’s avoid stepping on any.

Call us today for a confidential conversation on your property situation; an impartial, honest discussion without manipulation or ulterior motive.

Is that ‘motivated seller’ really just a ‘motivated agent’?

Is that ‘motivated seller’ really just a ‘motivated agent’?

Selling your home? Let’s not make it too personal.

It’s not right to use a vendor’s personal circumstances as a means of selling a house.

Divorce, financial difficulties, poor health, whatever the reason for selling, they are the vendor’s reasons and should not be put out into the world. They should not be used as a marketing tool. It seems many agents will disagree with us.

It is common practice to make the listing all about the seller and what is going on in their lives, instead of the property.

The tell-tale signs are in phrases like “Separation Dictates Immediate Sale!” or “Urgent Sale – Vendor Already Relocated”. Yes, those sorts of slogans are on the more extreme end but are often found when marketing a property. More commonplace slogans like “Motivated Vendor” or “All Offers Considered” have the same devastating outcome by giving away the vendor’s position.

They indicate that personal issues are being exploited to promote a quick sale, and we’re dead set against it for the following reasons:

  • Ethically and morally it is not ok to broadcast a vendor’s personal issues to make a quick sale.
  • It can adversely affect the sale price.
  • It takes the focus off the property itself and places it on the vendor.
  • It’s actually none of the purchaser’s business why the house is for sale.
  • It’s lazy.

Every buyer wants the best deal, and if they get a whiff of desperation from you through your agent, how do you think they’ll react? While they might have sympathy for the personal circumstances that force you to sell your home, they’re not going to pay over the odds to do you a favour. Instead, they’ll seek to take advantage of the situation and make an offer well short of what your property
deserves. When you’re faced with having to choose from a host of mediocre offers, you’re never going to get the price your property deserves. Purchasers are savvier and have access to more information than ever before. Many use the leverage of what the agent says against the vendor knowing the agent won’t get paid if their offer isn’t accepted.

In real life, that “motivated seller” is more likely to be a “motivated agent”.

They might be anxious to offload the listing because they know if they don’t sell it, they don’t get paid! The commission payable on $500,000.00 is a lot more than the commission paid on $0. If the property is worth more, their motivation to sell doesn’t increase as much as their motivation to not have the property withdrawn. They want to sell before the vendor asks another agent to take on the listing, no matter the price.

The last thing you want to show is desperation. That’s why we never play the sympathy card on behalf of our clients. We think it’s vital to always show confidence in the selling power of the property instead of hanging out some sort of begging bowl. Besides, we’d never want to let the world know about a client’s personal situation. We’re in the business of selling houses, not peddling misery.

Many agents are just too lazy to persevere and get a fair price. Is that the sort of agent you want working for you?

The next time you read a listing with words like “motivated seller” or “all offers considered”, think about who is actually the motivated one, or who is the one open to all offers. It might be the agent themselves. If that’s the case, they’re not the sort of person you want on your team when it’s time to sell.

Money for nothing? The downside of commission-based selling.

Money for nothing? The downside of commission-based selling.

Many real estate agents don’t see you as a client.

They see you as an easy commission.

They can make a lot of money by doing very little to sell your home.

It’s true. Especially in a buoyant market where well-presented properties sell within days.

How do you feel about that? How do you feel about forking out a hefty commission for little effort? Let’s crunch a few numbers to see how much you’re paying.

For this exercise we’ll follow normal real estate practice, with the following fees based on the first $350,000 at either 2.5% or 3.5%. Anything over and above $350,000 is based on 2%.

350,000 sale price – 2.5% commission = 8,750 & 3.5% commission = 12,250
550,000 sale price – 2.5% commission = 12,750 & 3.5% commission = 16,250
750,000 sale price – 2.5% commission = 16,750 & 3.5% commission = 20,250
950,000 sale price – 2.5% commission = 20,750 & 3.5% commission = 24,250
1.5M sale price – 2.5% commission = 31,750 & 3.5% commission = 35,250

Don’t forget the other expenses you’ll pay, such as marketing and administration costs, plus auction fees. Put them all together, and you’ll see that selling your home in this way isn’t cheap. And, a lot of the time, it isn’t fair.

Just because it has always been done this way in the industry, that doesn’t mean it is right. But many real estate companies will charge the same amount of commission regardless of the calibre of the agent selling the property, or how much effort and time they have to put into it. We don’t like doing business that way. In fact, we refuse to do business that way.

We prefer to act as a real estate consultant that follows professional practice of time & attendance plus disbursements without variation or fee escalation based on the value of the property. If the way we charge sounds familiar then you’d be right. Doctors, consulting engineers and architects all operate under the same principle, so why shouldn’t we?

We have moved away from the ‘no win, no fee’ arena. We ask our clients to pay for what we actually do. It’s fair, and it saves our clients money. Here’s an example:

We recently sold a home for $530,000. It was in market for five days, and we billed for 5.9 hours. We charged $2, 360 plus marketing and GST. Now, if we’d charged 2.5% commission, we would have made around $12,000. If we had charged 3.5% commission, we’d have banked just under $16,000. Compare $2, 360 to $12,000, or $16,000…what would you rather pay?

This example is real, and checkable. It reflects the way we do things, and also the unfairness of the commission-based system. Paying an agent around $16,000, plus other costs, to sell a home that was on the market for a whole five days??? As far as easy commissions go, that one is a doozy!

Be an empowered, sophisticated purchaser, not a lone buyer.

Be an empowered, sophisticated purchaser, not a lone buyer.

Caveat Emptor –‘let the buyer beware’. For most people, buying a property is likely to be one of the biggest transactions they will ever undertake, maybe only once in their lives, or maybe more. We understand how disadvantaged a lone acting buyer really is in this process, sadly most do not.

We think that acting alone as a purchaser, comparatively unsupported, under resourced and in unfamiliar territory in many respects, is not a good idea. So we’ve done something about it.

We present a unique proposition for buying property that simply makes sense, and the results are staggering.

 

Imagine if you, the buyer, had your own Real Estate Professional working for you exclusively, in the same way the seller has. Levelling up on the playing field can have a profound positive impact on your outcome.

Would you turn up alone to defend yourself at a court hearing, or worse still, take advice on the day on how to present your case from the complainants’ lawyer?

Because that’s what you are doing!

 

Our Process

 

  • We start with a consultation to establish why you are buying. There are usually only two reasons; to solve a problem, or to seize an opportunity. Whatever your story is, it’s safe with us.

  • We explain the cost for service and demonstrate the advantages of our understanding and experience in the process of securing your property purchase. We operate from the universally trusted Professional Practice of time & attendance plus disbursements. It’s the same way that doctors, consulting engineers or architects work, without prejudice.

  • Our engagement is by way of an Agency Authority. On this basis, we work for you and only you, not the seller or their agent.

  • If we agree to work together, we treat you as a valued long-term client, not just a means to grab a ‘sneaky portion’ of the seller’s salesperson’s commission. (Often up to 40%)

  • We coach you on how to recognise and search for the best properties, how to conduct your initial viewings, what not to say or do when on site, what questions to ask and how to answer any if asked. Your conversation (if any) must be short and vague.

  • We discuss your findings and assess any property of further interest you have selected for additional examination. This includes all information provided by the seller plus our own instinctive investigation and observations on any matters. We establish the probable market property price using the same methods practised by Registered Valuation Consultants, regardless of the vendors expectation and agree on the terms & conditions of any offer we may put forward.

  • Our reporting and recommendations to you are rigorous and factual, we make no excuses for that. You’d expect nothing less from your Professional Consultant.

  • Our negotiation skills are our craft, we stay with this phase until we achieve an accepted offer by both parties, or we walk away, that’s what we are engaged for.

  • We secure property at a realistic price, on terms & conditions that suit you, the buyer – Guaranteed!

Be inspired, not manipulated. It’s our values that set us apart in this industry