You’ve surely read about people who sold their house in Remuera (or Eastern Bays) within a week, or for a price beyond their wildest expectations. 100% above CV even!
For many following the Auckland property market (or just simply read the news), you are likely to have noticed that the real estate market cycle has changed. The gears have seemingly stepped down.
And you have found out first-hand about this ‘cold’ property market when your home is now listed on the market and no one seems to be interested. So what can you really do if you put your house up for sale and no one seems to want it?
So what should you do to sell successfully in a changing real estate market?
1. Talk to your real estate agent
If you’re in this situation, the first step is to have an honest conversation with your real estate agent.
Hopefully, you decided to trust them with selling your largest asset not because they gave you the highest appraisal. But because they have a strong marketing plan to draw the buyers in (in this buyer-scarce market).
You will notice immediately that I did not talk about ‘negotiating skills’. Without buyers, what’s there to negotiate? The starting point is therefore always about attracting buyers. If your property is not selling, looking at the number of buyers should be a good starting point.
Before you signed the agency agreement with them, they will have given you a written estimate of the sale price, based on current market conditions and sales of similar properties. I’d suggest checking in with your real estate agent about how changes in the property market may affect the desirability of your property. This includes:
- comparable SOLD properties – obviously this has the greatest impact on your pricing. Your neighbour just down the road or round the corner may have decided to accept a cut-price offer and buyers interested in your home are now anchored by the lower price.
- comparable properties CURRENTLY listed – these properties are your direct competition and buyers choose between them when deciding which ones to inquire, visit or put any offer in. This is also why (especially in this market) a strong marketing strategy is critical. If your property does not stand out because it suffers from mediocre (or mis-spelt) advertising, then buyers will choose to avoid it. If you are priced too high…then congratulations. You are the highest bidder on your property.
2. Consider switching to a real estate agent who has unique marketing strategies to maximise your chances in this market.
Now more than ever it is very important that you take the time to choose the best real estate agent for your sale.
Simply because houses no longer sell themselves. There’s of course constant debate around what constitutes the ‘best’ real estate agent. Is it that guy who sells the most houses or the one who extracts the most out for his vendors? The two types do not necessarily correlate. (And that’s if you can even scientifically measure “negotiating skills”.)
I’ve always taken the view that the best real estate agent is the one that’s most suitable for you in your circumstances and works best with you. And the most important part of our job lies in marketing your home. Simply because when a house is marketed well and fairly priced, the buyers will come and the resulting competition is the greatest factor in driving up prices. Who pays over the odds for a property when no one else is buying? Not me for sure. And not any of your buyers who have either placed low-ball offers or not even put in any offers.
As the old saying goes: you just can’t sell a secret. And today, with the amount of media (cat videos, funny memes etc) constantly being produced to entertain us in the same 24 hours we always had, your home has that few seconds of standing out in the sea of listings. You therefore need to ensure that your house is ‘in front’ of the greatest number of viewers to maximise your chances of success.
Get an agent who really have the expertise to do this. Agents who have strong online presence and working with a large pool of active buyers will not only be beneficial, but may be instrumental, to the success of your sale.
So, when you are interviewing new agents, consider asking the following questions around the marketing of your home:
- How is your marketing different from other agents and how can you make my house stand out in this crowd?
- Do you have your own website which is actively advertised and can showcase my home on it?
- Do you run your own Facebook ads and what sort of targeting options do you employ? (Don’t be surprised at the answer – “this is run by third parties so I am not too sure.”)
- Do you run remarketing campaigns to market my home to buyers who have gone through the open homes or seen the ad once? (Don’t be surprised if they do not know what this is or if they don’t do it.)
- Do you run any Google ads? (Again, don’t be surprised if the answer is no or “I don’t know.”)
- Will you be doing any print advertising? What is the rationale for it and do you have any data on the return on investment for print advertising?
- How will you market my property to active buyers who may not have come across it through their own search methods (for e.g. on TradeMe)? (This could be the agent’s personal databases or the office’s database.)
- How else do you acquire buyers? (I acquire buyers from running my own ads on platforms where the buyers are. Without giving away too much, I have a large active list of buyers (sorry, not some old outdated ‘past buyers’ list) whom I can call upon for any type of property at any time.)
Hopefully, you can get a satisfactory answer. As with many things in life, the devil is really in the details so do not be afraid to probe and ask more of your real estate agent about such marketing. After all, you are likely to be paying for it so why would you not want the best possible return?
But I feel bad for my real estate agent who has spent time and effort on my home!
Well, there really isn’t a need to. You owe yourself and your family to get your home sold for the best possible price under those circumstances.
Real estate agents are paid by commission and smart agents would have fully expected that they do not sell everything. If your current real estate agent is always ‘talking you down’ significantly from the originally appraised price, then why should you feel sorry for them? They are likely to have ‘bought your listing’ and gave you positive reasons to sign a listing with them. And they would have used your listing to look for new clients too – many often complain that effort has dropped off after they sign the listing agreement.
So do what’s right for yourself and your family. It’s not about how ‘hard’ the agent has worked. You are paying for the right results so you deserve them.
Should I take my house off the market and relist with the same agent later?
You should consider the benefits in doing this. What exactly are you hoping for that will be different the next time? Is your real estate agent going to miraculously pick up new marketing strategies to find those buyers or have a network of different buyers? I’ve seen sold listings that have used the same agent three times – without any success before giving up and trying a new agency and finally selling. Patience is a virtue – but not when you have a house to sell.
Be careful about commissions when you are changing agents
If you are concerned that your agent is not the right person to sell your property, then you can change your real estate agent once your current agency agreement ends. Typically, there’s a 90-day sole agency period.
Remember to check the conditions of your agency agreement carefully before doing this – you don’t want to be in a position where you have to pay two real estate agents if the property sells.
3. Think about your pricing strategy. Is your Remuera, Kohimarama, Orakei, St Heliers, Glendowie or Mission Bay home priced too high?
Ask your agent if they think your price expectations need to be adjusted. In fact, this is something your agent would have been actively communicating with you and he/she should be keeping you up to date on your competition.
When a property isn’t selling, there are 3 key ‘P”s to consider: POSITION, PRICE AND PRESENTATION.
You can’t change your property’s location. But you can certainly consider adjusting your price expectations. Like I mentioned, you don’t want to be the highest bidder on your own property.
If you’re serious about selling, there is no point reminiscing about the market that once was (aka the good old days). The market and the current buyers have no memories. It’s unlikely that the buyers looking now were even around during the boom years of 2012 to 2017. And if they were waiting that long, they are not particularly motivated and would take this opportunity to eke out a bargain at your expense.
Holding out for a dream buyer who is looking to pay over the odds (when compared to surrounding properties) can be very risky. Time on the property market is not your friend – stale listings lose more money eventually compared to those who sell early and realistically. You can always eke out a bargain when you are looking to buy unconditionally, having sold successfully.
Also consider whether your property is out of step with what people want; if you have a large family home with extensive grounds (like many sprawling estates on Victoria Avenue or Upland Road) and high CVs, but the majority of would-be buyers are looking for smaller properties, there’s really not much you can do to change their minds or their price limits.
4. View your home as a ‘critical buyer’ and do what’s necessary to sell it
I mentioned “Presentation” above as one of the 3 “P”s.
If you and your real estate agent are in agreement that the asking price is still right after spending some time on the market, there may be other levers you can pull to boost buyer interest.
It can be therefore helpful to view your home as a critical buyer.
Have you received honest feedback from people who have viewed the property about what they think the faults are? Have you talked about this with your real estate agent? This may be your dream home but it’s also likely that you’re oblivious to the issues that are putting people off your property.
Should I fix issues then?
In the current property market, buyers aren’t willing to pay a premium for a home if they see that it requires serious refurbishment and therefore they are taking on significant deferred maintenance. Maintenance is not capital improvement at all. In a boom market, escalating land prices hide the cost of the work required and buyers often pay over the odds to bet on capital gains (i.e. the price of land going up). (By way of historical background, they used to have depreciation for buildings which tells you all you need to know about the value of buildings.)
When the market softens, and the FOMO (fear of missing out) disappears amongst buyers, buyers look for reasons not to offer or to beat you down in price. And guess what? They certainly will exaggerate (either to you or in their minds) the amount that they need to spend in bringing the property up to standard.
Therefore you should consider whether it’s worth it to be fixing these issues (click here to see how you can renovate on a budget) and if your agent is highlighting to new and old buyers about such fixes? It’s always nice as owners to hear positive, glowing feedback from real estate agents on your home. But if you are not receiving any offers, then is your property really that ‘perfect’? Do you only want to hear the good stuff, or are you serious about selling your house after putting in that much effort?
More thought also needs to be given to the pre-market preparation, discussions and marketing approach (as outlined above).
Take the time to prepare your home for your target market. Basics involve having a good street appeal (first impressions!), a well-groomed section and clean, clutter free surfaces. This all works wonders when it comes to making people fall in love with your home. But don’t let your hard work go to waste.
And unfortunately, these days, getting it wrong upfront (i.e. picking the wrong salesperson for the wrong reasons (for e.g. friendship, ‘letter drops’)) could be the difference between selling, sitting on the market for long or not selling at all.
Consider your advertising copy and budget
And in this current property market, a lot of thought needs to be given to advertising copy. The advertising of your home makes a world of difference between a buyer coming to view and make an offer, or not coming at all. You will want top notch photography that can flag the key features, a well-considered photo sequence and solidly-written advertising copy that is bereft of grammatical errors. Unfortunately, many agents do not bother (or lack the expertise/ability) to change online advertising as this is controlled by third parties.
Throwing money at the problem (aka spending thousands on The New Zealand Herald or Property Press – sounds familiar?) also doesn’t guarantee anything – when not properly integrated with online advertising or the return on investment is ill-considered, these advertising mediums are more or less money pits.
5. Go to nearby open homes in Glendowie, Mission Bay, St Heliers, Orakei, Kohimarama and Remuera
Going to open homes of comparable homes can be a good way to see what you’re up against. This has implications on your pricing strategy.
For example, if comparable houses in your price range all feature new carpet and fresh paint, but your place is sporting the same décor it had in 1971, buyers will see your home as dated. You would then expect your home to fetch less.
You will also need to consider the nearby amenities and location, along with views. Views of Rangitoto and the sea will often command a premium, all things being equal.
Similarly, if nearby new homes are selling for a certain price, and your property that is dated is priced way above their asking prices, then you would expect buyers to be put off unless there’s something unique.
Sure, your land might be bigger but are you selling to a homeowner or a developer? Developers (who are retreating and cautious in this market) are unlikely to be appreciative of land with steep slopes or narrow driveways as that restricts the development potential. Homeowners on the other hand may overlook these, but are still not that keen on that big piece of garden that’s unruly and difficult to deal with. In short, do not just assume that your property deserves more because it has a big piece of land – usability of that land matters.
To recap, here are some points to consider if your house isn’t selling:
- Have an honest conversation with your real estate agent
- Consider switching agents once your current agency agreement ends – evaluate your next one based on their merits and the approach they take towards marketing
- Think about your pricing strategy
- View your home as a critical buyer to try and understand what’s putting people off your property
- Go to open homes to check out your direct competition
Hopefully with these tips, you can get your home sold.
Albert Einstein once said: “The definition of insanity is doing the same thing over and over again, but expecting different results.”
Don’t be guilt-tripped by your current real estate agent and keep doing the same thing, hoping for a different result.
Found this post useful and have more questions?
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Short commentary on Eastern Suburbs’ market statistics for October 2018
Updated 9 April 2019Disclaimer: the views expressed in this article …