Tender? Auction? Exclusive sale? Liz Dobson unravels some selling techniques.
Selling your home can be one of the most stressful periods of your life, especially if you are forced to sell your property. But with research the experience can be relatively painless.
First you need to find an agent. Try
word of mouth first. Ask friends, colleagues and neighbours who they used when selling or found helpful when buying. Try a local agent - they know the market.
Go to open homes in your neighbourhood, and if you like the agent's style arrange a meeting with them. They can also advise you on the market value for your property. To get an overall price indication for your property, consider asking three different agents.
According to the Consumers Institute of New Zealand (www.consumer.org.nz), you shouldn't be swayed by an agent who suggests the highest price. Instead, ask them to justify their opinion. The institute also suggests that when you sign up with an agent, set out how often they will report to you, and if there doesn't seem to be any movement on your property, ask them why.
You can also negotiate the fee with the agent - according to the institute, an agent may agree to a lower fee or pay for more advertising if they really want your business. Negotiating is important if an agent already has a likely buyer for your house.
To decide the value of the property, some agents are recommending Price on Application (POA) where there is no set price. Instead, prospective buyers are asked what they think the property is worth.
The pro for you is the market decides what your home is worth, but the downside can be that it could scare off potential buyers who may think the property is out of their budget.
The POA also helps agents with the constraints of the Commerce Commission, which dictates that the property must be sold close to the original set price.
Surf the web before you place your home on the market. Check out the Citizens Advice Bureaux website (www.cab.org.nz), while the Real Estate Institute of New Zealand (www.reinz.co.nz) has a list of terminology.
The four main ways of selling a home are:
1 SOLE AGENCY
For a set period of time, one agent is given the exclusive right to be paid a commission if the property sells. The advantage for the vendor is that the agent has the incentive to sell as their commission is guaranteed. But there are also negative points. If the agent is unsuitable, you're stuck with them for the period of the contract. To avoid this, make sure the deal is for three months. Another negative is that if you sell the house yourself, you still have to pay the commission to the agent. The only way to avoid this is to put a specific clause in the contract.
2 GENERAL AGENCY
For this, you list your property with several agencies but only pay a commission to the one that sells your property. While this may sound ideal, many agents are reluctant to agree to general agency listings and won't go out of their way to market your property. You also have to consider the aesthetics of the property - do you want prospective buyers seeing lots of for sale signs from different agencies in front of your home? It screams: "I'm desperate to sell!"
3 AUCTION
This is still a very popular way to sell a property in Auckland, especially if it is a character home in a popular suburb or has special features. Basically, potential buyers bid against each other for your property. You place a reserve price on your house and set a date for the auction. If the bidding doesn't reach the reserve, the house isn't sold.The property can be sold before or after the auction under normal sale conditions.The downside is that agents often expect sellers to contribute most of the cost of advertising auctions, which can run into thousands. When discussing the auction option with your agent, also set a budget. Sure, you can spend more money if you're selling your Remuera mansion compared to your Avondale home. Another negative point is the stress involved, especially the days leading up to auction. Will there be any bidders, and if so, will the home pass the reserve you've set?
4 TENDER
This is a popular method of selling properties in Wellington, and more and more Auckland vendors are now choosing it. You advertise your property and receive written offers, which can be conditional. No potential buyer has an opportunity to see the other tenders. With a closed tender, all tenders must be in by a certain date while open tenders have no deadline. You don't have to accept any tender.
Ray White development associate Andrew White says the main advantage of tender is you have the benefit of auctions without the pressure. You can market to a plan with an end date. The price of the marketing, like auctions, is up to the vendors, and a budget can be tailored depending on the property, says Andrew.
Pay just
per week ongoing
Pay just
per year ongoing
30
