One of the greatest things about being a real estate agent is the fact that no 2 transactions are the same. This means that every day there are different things that arise with different transactions which makes it virtually impossible that a “dull” day exists in the real estate profession. While this is one of the greatest things about being a real estate agent, that does not mean this is great for buyers and sellers.
When selling a home, there are many different challenges that can arise throughout the transaction and even before you’ve listed your home for sale. These challengers are more common than others and will be explored in this article so that you are well prepared to deal with them, especially in the current COVID-19 climate.
1. Local Market Conditions In Orakei, Mission Bay, Kohimarama, St Heliers, Glendowie, Remuera, Meadowbank
Before you sign an agency agreement with a local real estate agent, there are challenges that need to be overcome. The local real estate market conditions (read here for the latest market updates) in the Eastern Bays (Orakei, Mission Bay, Kohimarama, St Heliers, Glendowie) and Remuera/Meadowbank suburbs can play a huge role in whether a home sells or not, provided you are in a position to consider the real estate market conditions.
Buyer’s Market, Seller’s Market, or Neither?
Most people would have heard the terms “buyer’s market” or “seller’s market.”
- A buyer’s real estate market is one in which the home buyers who are in the marketplace have an advantage over the sellers.
- A seller’s real estate market is the opposite.
When selling a home, you should know what type of real estate market place exists in your area. If your local real estate market is flooded with listings, also known as your competition, and they are not selling quickly, the probability is that your area is experiencing a buyer’s market.
This gives the home buyers in the market place the opportunity to be more selective of the homes they want to look at which means there is a greater probability that your home will not be looked at. This obviously is not the goal when selling a home. In a seller’s market, obviously that is reversed and properties are flying out the door and high sale prices are consistently achieved.
The possibility also exists that neither a buyer’s or seller’s market exists. This is when the supply and demand for housing is relatively balanced with one another. This means there are a good amount of homes available for sale and also a good amount of buyer’s in the marketplace. That is a stable market.
In our current real estate market with COVID-19 hanging around, we are entering into unchartered territory. Some believe the market will crash because the economy is going to suffer with many people losing their jobs and businesses being able to operate profitably with border restrictions. Others believe that the market will remain stable because interest rates are at a historic low and real estate market becomes a better place to invest your money in. Then there are some who think that the market will bounce back quickly because the way New Zealand has handled the pandemic demonstrates that we are a great country to be in and this will attract all those returning Kiwis home.
So is it going to be a buyer’s market or seller’s market? Well, it’s anyone’s guess and time will tell. If lots of sellers do not have to sell, then it might be neither. There will simply be less transactions as prices neither increase nor fall.
Time Of Year
Every local real estate market is different. The time of the year when a home is listed can make a huge difference. When investigating the local market conditions, the time of the year you decide to sell your home is one challenge that needs to be overcome.
For example, generally speaking, the best time of the year to sell a home in the Eastern Bays (Orakei, Mission Bay, Kohimarama, St Heliers, Glendowie) and Remuera/Meadowbank real estate market are the spring and summer months (Jan, February, March, September, October, November).
The challenge of deciding when the best time to sell your home is one that is greatly impacted by your local real estate market. There are some situations that exist where it may be that the best to sell your home during the fall and winter months and not wait until spring. This could be because your home, given that it has all the modern comforts, is more likely to stand out as warm and comfortable in the cold winter months.
What If You Can’t Wait?
Unfortunately, some people do not have the luxury to time the sale of their home. Some people need to sell because of financial pressures or want to sell because they are keen to move onto the next stage of their life. And therefore for these people, whether it is a buyers’ market or sellers’ market, whether it’s winter or summer, the key is that you aim to sell and buy in the same market, so that you fully take advantage of the market conditions.
This means that if you sell at a lower price because the market is not doing well, then you can also buy at a lower price and essentially your loss is not as great as you perceive. And sometimes that ability to move on to the next stage of life is more important that the small amount of loss you are going to suffer, because the market conditions might not improve in the next couple of years.
2. Handling Emotions
If you didn’t know that selling a home can be emotional, now you’ve been forewarned. This is because home is where you have created memories with your family and has been your safe haven for many years.
There are many emotions that can come with selling a home. Excitement, uncertainty, nervousness, and stress are just a handful of emotions that challenge home owners when selling a home, and that is inevitable given that the house is often a major asset in any family.
In order to reduce stress that our vendors face, we often produce a timeline of events so that owners know exactly what the next steps are. Not only are they aware what we, as real estate agents, are doing, they also know which task they need to complete. By taking things step by step and focusing on the present, that can greatly reduce the stress and pressure of selling your home.
When receiving offers, homeowners may sometimes also get emotional because this is their home it concerns, and that is very understandable.
However, we always advise our sellers to try to detach themselves from the situation and focus on their next steps. That way, by looking at it as a business decision, you are less likely to make hasty decisions.
3. Choosing A Real Estate Agent
In every real estate market there are hundreds or thousands of real estate agents. A challenge that home owners face when selling their home is choosing a Real Estate Agent. In every real estate market there are lots of real estate agents who are average, some that are terrible, and usually only a handful of top real estate agents. In many real estate markets the statistic is that 85-90% of the business is done by 10-15% of the real estate agents. That is a lot of business being done by a small number of professionals.
So how can you overcome the challenge of choosing a top real estate agent when selling a home? One of the most important things you should be educated on before choosing a Real Estate Agent is ‘how to choose the best real estate agent for myself“.
Knowing the importance of not choosing a real estate agent who offers to list your home for the most amount of money or just choosing a real estate agent because he/she sells a lot in the area is very important in the process of overcoming the challenge of choosing a real estate agent. You need to make sure your real estate agent is not a “list and pray” agent and that is extremely critical in the current Covid-19 climate.
Another key to help overcome the challenge of choosing a real estate agent who is a superstar is knowing how to properly interview prospective agents. The fact is that some sellers will skip this step all together because they are friends with a particular agent or their mum/dad who sold years ago used that agent, which can truly be a serious mistake.
There are other home owners who do not know how to interview a Real Estate Agent when selling a home. If you’re properly educated on how to interview prospective real estate agents when selling your home, this home selling challenge will be an easy one to overcome.
Take care not to choose a real estate agent just because he/she gives you a high market appraisal – we all know that it’s not worth much when the ultimate value is dependent on how much a buyer is willing to pay for your home after an outstanding campaign using unique marketing strategies.
Choosing a real estate agent who is a “dud” can make the home selling process a monumental task. Choosing a top notch real estate agent and taking their advice and guidance can make the other 7 challenges seem extremely easy to overcome and may not be challenges at all throughout the home selling process. Just be careful that you are choosing a real estate agent who will produce results for you and not just for themselves — that is a key difference.
4. Pricing The Home
Pricing real estate is a science that takes experience and practice to “master,” even though it never can be truly “mastered.” Unfortunately when selling a home there is no crystal ball that can tell you what your home will sell for. The pricing of a home is one of the challenges many home owners face when selling.
Overpricing a home can lead to some devastating consequences. The price that a home enters the market at is very important. A home that is overpriced when entering the market generally will not receive many inquiries and/or showings. The longer a home sits on the market the more and more a buyer begins to wonder what is wrong with the home. There may be nothing wrong with the home, but a home that lingers on the market begins to obtain a “stigma” that something is wrong with it.
A home that is priced right from the beginning should get lots of activity and showings the first week or two it has been listed and possibly sold in that time frame or shortly after as well. Every home owner will face the challenge of pricing their home for sale. Choosing a top real estate agent who has experience and a strong record of success when it comes to marketing houses can make this challenge less strenuous. He/she should go through the different methods of sale with you to determine what is the best way to get you top dollar.
5. Getting The Home Ready To Sell
Ask anyone who has recently sold their home if they enjoyed keeping their home in “show ready” condition. The answer is going to be resounding NO!
Preparing a home for showings is a time consuming project and is a challenge for any home owner who is selling their home.
Tasks such as keeping the rooms de-cluttered or making sure the counter tops are clean may seem easy, but after weeks of having to do so, it can really wear down a home owner, unless of course you tend to be someone who is generally very neat – then kudos to you!
In addition to keeping the home de-cluttered and counter tops clean, many homes are staged to help minimize the time on the market. The staging of a home in many cases can mean removing many items that you may use on a daily basis. For example, that lounging recliner you like to read your favorite book in may now be in storage so that the living room space is maximized. After a while this can be very annoying and frustrating. Click here to see how to style your home to appeal to Millennials.
Some homeowners also struggle with deciding what to do to add value to their house before selling. What is critical is that you don’t overcapitalise on your house – as you won’t be able to get back what you spent, especially in a post Covid-19 market, so here are 10 ways you can add value on a budget.
6. Unrealistic Home Buyers
A top challenge that home owners face when selling a home are unrealistic home buyers. There are many ways that today’s home buyers are unrealistic and that is why it is such a common challenge that home seller’s face. The most common scenario where a potential buyer is being unrealistic has to do with the offering price.
There are many potential buyers in the marketplace, whether a home is priced right or not, will want to offer a home owner significantly less than their home is worth. Dealing with low ball offers is one of the top challenges seller’s face when selling their home.
These offers might seem insulting to you or perhaps too complicated that your first reaction is to reject it. However, we always advise our homeowners that having a buyer present an offer is always beneficial to them. The buyer has taken time to fill out a sale and purchase agreement. Do not dismiss it too easily.
Even if you cannot reach a deal at the end of it, it is good to be able to tell future buyers that there was an offer on your home and that there were other people equally interested in the house. This creates social proof that your home is desired by many.
Another challenge seller’s face when it comes to unrealistic buyers relates to the condition of a home. There are many buyers who not only want to submit low ball offers but they also want the home to be in mint condition. Many of today’s buyers aren’t interested in doing any work to the home they purchase. This includes light cosmetic updating such as painting rooms and replacing carpeting. This can be very frustrating to seller who prices their home to reflect the need of some minor cosmetic updating. Again, these buyers are not to be ignored because they might eventually come round to the idea of doing some cosmetic renovation themselves after understanding the market a little more.
7. “Passing” Building Inspections
You would be surprised but some deals can be killed by building inspectors, even when it is a brand new home. This is because building inspectors can instill unnecessary fear in buyers due to their misconceived idea of the standards required in home construction or due to certain prejudices that they have against certain homes.
For example, some building inspectors do not like plaster homes and will comment negatively on all of them regardless of whether there is a really any issue with the home (it takes a lot more to sell a plaster home for top price and we have the tricks here). Or they might not understand the material used (e.g. Alucabond which is more common in commercial buildings and are expensive) and wrongly advise buyers that the materials used are inferior (simply because they rarely come across it).
A top challenge therefore is ensuring that these building inspections pass. Therefore, we advise our clients that if the house is built of unconventional materials that many Kiwis may not be familiar with, it is always good to do a building inspection. That way, when a cow boy building inspector comes along to give a report that is not favourable, at least as the homeowner, you can challenge it with a report that is favourable and done by a reputable building inspector. That can oftentimes save a deal as the buyer starts to doubt the credibility of their building inspector.
Therefore, it is crucial that these things are dealt with prior to the property going onto the market so that you stand the best chance of selling fast and at a good price.
8. After Unconditional Date
Many homeowners think everything is done and dusted after the unconditional date. However, that is not true as there is still settlement and pre-settlement inspection to be concerned with. A pre-settlement inspection is where the buyers inspects the house (usually 3-6 days prior to settlement) to see that the house is in the same condition as when it was sold and all the chattels are in reasonable condition. This means guaranteeing that all the lights, stove etc. work which some homeowners may not necessarily remember.
Don’t wait until the last minute to sort it out. Some buyers may be quite fussy and will check through very minor things so make sure you do a thorough check of your home so you can fix them before buyers pick them up.
Sometimes settlement can also be an issue, as was the case with the whole country going into lockdown for 4 weeks. We had 4 properties settling during this period. Some were pushed back and 3 proceeded. This involved some very difficult negotiations and a clear understanding of the law (which we as former lawyers are well versed in) to push through settlement for our clients. You can bet there are very happy clients out there.
By having the knowledge that challenges will exist when selling a home can make a world of difference. While many of the top challenges when selling a home are out of the homeowners’ control, many of them are in their complete control.
The above top 8 challenges are the most common that you can expect, but remember that no two real estate transactions are the same, so it’s possible others may arise in your case, depending on the age, construction and location of your house.
Good luck in your sale. Or take luck out the equation and talk to us if you are serious about achieving top results for your home.
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