Listing a property for sale is quite a complex process these days with a vast amount of information needing to be communicated both ways between agent and client. First and foremost, the agent is required to provide the homeowner with written marketing information in support of their suggested selling range. It is important from the outset that both the agent and the homeowner have a common expectation in regard to a likely sale price, rather than having conflicting opinions and expectations when offers are being considered.
Our agent also has a commitment to discuss issues such as the vendor’s disclosure obligations; a topic that calls for open and honest communication between the homeowner and the agent. This covers any aspect pertaining to the property that may impact on the buying decision of a potential buyer and could cover such matters as weather-tightness issues, compliance certification for any works that have been carried out on the property and any outstanding issues with council such as rates arrears. In fact, any matters that may affect the smooth transfer of the property to a new owner should be openly discussed. In addition there are comprehensive requirements in place and disclosures that must be made to comply with the Anti-Money Laundering (AML) legislation.
These provide examples of why an experienced agent, and the input of a solicitor, are advisable when listing a property for sale. This is a process that should only be carried out by an experienced and licensed agent – and in fact there are very clear guidelines to be observed in this regard. Agents with less than six months experience have rigid rules about what they can and can’t do without close supervision.
One of the most important considerations when selling though is the method of sale; in this issue we will cover the main options that are available. Most agents will make a recommendation in this regard but the final decision must be yours, the homeowner, and you should feel comfortable with your final decision.
Sale by Auction:
More popular in Auckland, Hamilton, Tauranga and Christchurch but less favoured in Wellington and elsewhere. An auction works best where there are multiple cashed-up buyers. It can produce a quick, finite result but affords little privacy for homeowners or for those bidding at auction. Auction outcomes are often determined by the strength of the under bidder. The Real Estate Institute of NZ recently reported than in the month of August, auctions were used in 10.9% of all sales across the country with 647 properties selling under the hammer. Tommy’s are licensed auctioneers but this is not our favoured method of sale.
Sale by Negotiation:
The property is open for sale by negotiation at any time. This is a strategy that forces a buyer to establish their own opinion of what a property is worth. It can be a useful option when the property is unique or there is little to compare it with. Sale by negotiation is not often recommended by Tommy’s as a preferred method of sale.
Sale by Tender:
There are two options under this method of sale. A closed tender runs through until a specified time and date whereas with an open tender, the vendor reserves the right to sell prior to that date should a suitable offer be forthcoming. In our view, a sale by tender has all the advantages of an auction sale but also offers a greater ability to negotiate the price in a manner that is completely confidential to the parties concerned. It also gives both parties more time to consider their positions before committing to a sale or purchase. A sale by tender is the method recommended by Tommy’s in most instances and has proved successful over a long period of time.
Marketing With or Without a Price Range:
The firm belief at Tommy’s is that buyers generally prefer to see homes advertised with a price guide. If no price guide is given, buyers are left to guess, or to assume the RV is a relevant indicator of price but particularly in a moving market, the RV can be significantly out of line with market value. Providing an enquiry range also encourages the right people to view the property and can save buyers time if the property is outside their buying range. Pricing property is an inexact science. A buyer’s perception of value can be based on emotion, the fear of missing out, and in many cases the enthusiasm and encouragement of a good salesperson. A semi-conservative price guide will encourage interest and offers but does not set a ceiling or limit the price that may ultimately be achieved by a skilled negotiator.
One of the most important functions of a real estate agent is getting the listing and price setting process right. We may not always tell homeowners what they want to hear, but we will give an honest assessment based on factual market data as to where your property sits in the pricing structure. If you are in the market now, or contemplating a sale in the coming months, we invite you to call a member of our sales team.