KEY POINTS:
You can't arrange blue skies, even in summer, so don't let stormy evenings put you off buying or selling a home in August. Experts reveal how clued-in buyers can make the most of a difficult market.
1. Less competition
This is the big one. The fact is there
is less housing stock to choose from during winter. And, our experts all agreed, that's the best news around in August, for sellers. It was a psychologically tough time to decide to sell, said Harcourts CEO, Bryan Thomson, but people still wanted to buy. "There is an urban myth to wait until spring because your house will look better. But one of the reasons there are fewer sales in winter is because there are not as many properties available. Often it's a wonderful time to sell, because there are less properties around but the same amount of buyers."
He said people who wanted to sell should get over the fact that gardens looked better in spring or summer and take the plunge. In Auckland, especially, "The difference between winter and the middle of summer isn't actually that great". There could be rain to deal with in summer too, he said.
"One of the biggest frustrations in our industry is when people are looking and we simply don't have the property to show them that they want to buy."
Murray Cleland, of the Real Estate Institute, said despite the general feeling against selling in winter, the present market showed there were some good sales being made.
2. Agents want you... even more than usual
During quieter winter months, real estate agents will go to extremes to get you to list with them. Along with the usual flyers in the mail (boiled sweets attached), you're likely to get a personal visit during August, with the opportunity to grill your local agent. The Herald on Sunday has even heard anecdotal reports of agents so desperate for potential clients, film opening tickets have been offered along with the usual newsletter update. Author of Where to Live in Auckland Stephen Hart said an agent in winter might have more time to put into selling your house.
3. Your place is cosy... if you make it so
A warm, cosy, well-lit house is going to strike a chord with any potential buyer walking through the door, said Harcourts CEO, Bryan Thomson. "It will have a positive effect, more so than if it were a warm, beautiful summer's day."
That's because August gives you the chance for the winter qualities of your home to shine through, he said. So you've got to make the most of them - insulation and sufficient heating are all-important.
Make sure you have sorted any "damp" problems, Murray Cleland, president of Real Estate Institute New Zealand, added. Buyers in winter would be on the look out for them, he warned.
* Some tips for cosiness
Make sure the house is warmed up well before an open home begins and turn on all the lights.
Brighten dark rooms with few windows by placing spotlights on the floor behind furniture. Place vases filled with winter flowers around the house and... voila, the ambience is lifted, with little effort.
4. Is there any point in waiting?
Our experts had a word of warning. While spring is traditionally seen as a better time to sell, you should always sell your house when you need to. And if that time falls in winter, then just do it - don't wait. You never know what the market is going to do in coming months, Thomson said.
"Don't buy a new house in winter because you think it's cheaper and then wait to sell yours in spring," he said.
"You can't predict what the market will be like in the future.
"Make property transactions when you need to make them."
5. You can make a better impression... and get in before the spring rush
Stephen Hart, said it was generally accepted that properties don't look their best during winter.
"People are less prepared to traipse around from open home to open home in between blustery squalls."
While there was no economic reason for a winter downturn, it happened, and it was generally to do with the fact that houses sold best when they were presented best.
"It is an opportunity, if you make most of an open home, and others aren't, to make a really big impression.
"Make sure that as people are arriving from blustery squally showers that they are greeted with wonderful ambience, a well-heated home with the fire going if there is one."
6. There's less work in the garden
Real estate agents said a way to entice new clients during winter was to remind them of the work involved in keeping a property tidy for open homes. It was more work at the height of summer, they said.
In winter, however, garden growth is slowing, and you don't have to mow the lawns as often, plus minor repairs are easier, without the heat to contend with. Yet, there are still ways of showing off your property's summer charm. Display photographs of your summer garden and lush green lawns. And remember to keep blinds partially closed, if they cover up undesirable outdoor scenery.
What should you do with your home right now?
Maintain, maintain, maintain, is the mantra. Murray Cleland, president of the Real Estate Institute, said constant maintenance was the key for all property owners to keep their places looking good.
Private sales
Are home buyers turning to private sales during winter?
Private property sale companies say their share of the market is on the upswing, even in winter, as vendors become frustrated at large commissions they must pay to real estate agents in increasingly tough times.
Although the Real Estate Institute has said that private sales make up only 10 per cent of overall sales, other sources say the figure could be as high as 15-18 per cent.
"Our numbers are growing year on year, even though the market has declined," said Kristy Gillespie, of HomeSell. "The internet has changed the way that people find out about properties for sale."
Peter Hammond, co-founder of commission-free Green Door, said his company's figures were up 20 per cent on last year, although he acknowledged that some of this could be a result of new franchises coming on board.
Auckland HomeSell owner Chris Caldwell said his listing numbers had increased compared with 2006. Caldwell said the bulk of his clients were the mortgage-belt market, where every dollar counts. "They are people in their 40s and 60s who are confident enough to give it a go themselves."
The best advice for home buyers right now
Get pre-approved finance, rather than falling in love with the property first.
Winter may traditionally be less busy for the property market, but canny home buyers can use it to their advantage.
Although the selection of homes may be less varied than in the busy spring/summer months, serious home buyers will also get more attention from a real estate agent who has fewer houses to market. "You can drive better deals with the real estate agents in terms of their fees, advertising costs and marketing generally," Consumers' Institute head Suzanne Chetwin said.
From a buyer's perspective, there are signs that the residential property market is slowing, so now is the time to drive a harder bargain. "Real estate agents will be more hungry to do deals, as fewer houses are available to sell during winter, anyway," Chetwin said. "Shop around with banks to get the best rates, and don't be afraid of revolving credit if you are the kind of disciplined person who will commit to making chunky repayments. Don't rush into making offers or let an agent persuade you to make an early offer. If the market is slow, you can afford to take your time."
Chetwin also suggests asking for more extras that you would otherwise have to spend time and money on obtaining from various agencies. "Get the real estate agent to provide a LIM [land information memorandum] report and any other information you might want on a particular property," she said.
While "location, location, location" has long been drummed into home buyers' heads, property investment analyst Kieran Trass said more than ever the public would have to be very careful about which neighbourhood they bought into. "In this market, some areas may well see a drop in values in the medium term," he predicted. Cheaper suburbs that had been heavily hit by investors would also be heavily exposed.
Trass recommends that buyers fix their mortgage interest rate for as long as possible, say five years. "Give yourself certainty. Don't be greedy and think rates might go down," he told the Herald On Sunday. "The chances of rates coming down from where they are in the next 12 months is looking very slim."
However, Jeff Staniland of Mike Pero Mortgages said last week that his company was advising clients that although interest rates were high and may go higher, at some point they would fall again, and home owners needed to retain some flexibility. "Simply taking the lowest headline fixed rate may not be the best option," he said.
Most experts agree that property buyers should not over-commit themselves. "We are near the end of the boom - if not at the end of the property boom," Trass warned, "and I think we could see 1 or 2 per cent more in interest rates than we've got. Now if you can't afford that, woah, you don't want to be selling in a soft market, which potentially we're heading towards."
John Tanner, CEO of nationwide home loan provider Loan Market, said with statistics showing a slowing of residential sales and with properties taking longer to sell, buyers were increasingly hesitant about paying the prices that vendors wanted. "My advice would be to sit down with a qualified NZMBA mortgage broker and find out what [amount] you can get pre-approved, rather than falling in love with the property first and then sourcing finance." Tanner said that way the buyer would have better bargaining power.
If you can't face open homes in the winter weather, then you can still use your time constructively, said Stephen Hart, publisher of Where to Live in Auckland. "If it's a god-awful day, read up on different areas, work out your catchment area or make comparative notes on prices."
