Selling Options

There are more options than ever available for selling property, whether you choose your local real estate agent or to go it alone do so as informed as possible.

panoramic view of properties in a state

 

Setting a Price

How do you decide what price your house should sell for? As well as using a real estate agent for their opinion, there are several ways of determining what your property is worth in the current market in order to establish a fair price. Remember, if you are using an agent their fees will be coming off the purchase price.

The main ways to establish a price include:

  • Local, comparable sales - One way of establishing a price is to look at comparable market sales that have occurred in your area recently. Seeing what similar houses in your area have sold for can help you understand the market. You can easily do this by purchasing Local Sales information.
  • Full Market Valuation - A Full Market Valuation will give you a current market value, and is completed by a Registered Valuer. It involves a full inspection of the property as well as analysis of local sales.
  • Rating Valuation - A Rating Valuation can also be used to establish a price at which to sell. As Rating Valuations are typically only done every three years, if the market has moved it can be out of date.

Negotiating the Sale

Selling your home isn’t as straightforward as setting a price and having a buyer agree to it. Regardless of whether you’re selling your home privately or through a real estate agent, you will need to decide how you want to sell – by auction, tender, or by offer and negotiation.

Offer and negotiation

Offer and negotiation involves setting an asking price then an interested buyer will make an offer. Further negotiations over price and/or conditions will occur before all parties are in agreement.

Most offers are made using a standard Sale and Purchase Agreement contract. As a seller you have the right to negotiate the price and conditions once the offer is made. Due to the nature of the contract and negotiation period, it also allows you and the buyer to take the time needed to think about the price, and any other changes to the contract each time it comes back to you.

Quite often buyers will make their offers conditional upon aspects like building reports and finance. This means that even if the offer is initially accepted, until the sales goes unconditional the buyer still has avenues whereby they don’t have to complete the sale. However, conditions can also be added by the seller. This can include clauses such as being allowed to accept a better offer, or a specific deadline to go unconditional.

Your real estate agent can provide you with a copy of a Sale and Purchase agreement. Otherwise you can buy forms online, including at the Auckland District Law Society.

Auction

Another option is to put your property up for auction. This can be a quick process as once your reserve price is met, the offer is unconditional. You also have all your potential bidders are there at the same time. Auctions also allow you to sell by a set date, with the option to still accept offers before the auction as well.

At auctions, the buyers have done all their due diligence beforehand so generally they are committed to getting the property. Auctions can be beneficial if there is more than one buyer interested in the property as a bidding war can eventuate, and prices can be driven up.

If your home doesn’t reach reserve you can negotiate with the highest bidder to reach an agreed sale price. Otherwise, you may need to re-evaluate your selling strategy and determine what to do next.

When selling by auction, your reserve price needs to be a price you’d accept, as once it hits this reserve, you are contractually obliged to sell.

Tender

Tenders are a way of selling your home privately. Each potential buyer submits their offer without knowing what any of the others is offering, and you get to pick the one to accept. Like auctions, tenders give you the opportunity to put a set date on the process, beneficial if you need to move out within a specific timeframe.

Because buyers don’t know what any other party is bidding, they generally put their best offer forward. Although this can give you a good idea of their price range, you still have the ability to negotiate with any offer if you don’t want to accept.

Tenders can put buyers off. Because of the private, closed style of sale, some buyers prefer to avoid this method if possible.

Using an Agent

Especially if it’s your first time selling, deciding which agent or agency to go with can be tricky. With many options available, which one you pick can definitely make a difference in how long it takes your property to sell and how much you get for it.

  • Locality – Where your agent is based can make a difference as to the level of their local market knowledge. Although most work within certain suburbs, some have more knowledge and experience than others. Scout around for someone who is active in your area, who has a history of information on the area and whose previous sales are in and around the area you are selling within.
  • Recent sales – Ask the agent about their recent sales in the area. Having an agent with a wealth of previous sales, especially recent ones, shows you they can get results. If the agent has quite a few active listings in the area it can also show you that others trust this person to sell their house.
  • Ask around – You might be able to get a feel for an agent’s reputation by asking your friends and family. First hand experiences and anecdotes can be invaluable when establishing whether an agent will be the right fit for you.
  • Terms of your contract – What package the agent suggests for selling your place can also make a big impact. Especially if you scope out a few different options, the terms of their contract such as their commission fee, as well as how they propose to market the property and the associated costs, will all play a part in whether you choose to go with one agent over another. Make sure you think they are worth the price they are quoting, and that are going to work enough for their money. As well, check out what marketing options they suggest and think about whether those options are really going to find your target buyers.
  • Licensing – Lastly, one thing to check when you use an agent is whether they are licensed. Due to legislation real estate agents have to be licensed meaning you will be protected should on the off chance anything happen. The Real Estate Agents Authority can help you if anything does happen or if you want to check out your agent further.