Last year I had the honour of being a guest judge for the Real Estate Institute of Queensland’s Residential Real Estate Agent of the Year award.
I managed to interview 24 high-performing agents about what they did to achieve the best price outcomes for their customers.
From these interviews and other learnings, here are some of the top ways you can improve the price you will get in selling your home.
First impressions count
Buyers often make a snap judgement in under a second. They then filter all subsequent information into their already-made decision. Test yourself, of the following property descriptions, which appeals most?
a) Beautiful rolling front lawn, wide open balcony, small lounge, single bathroom, dirty old kitchen
b) Dirty old kitchen, single bathroom, small lounge, wide open balcony, beautiful rolling front lawn
You go naturally for (a) because you start with a favourable impression and then filter the negatives against that. In (b) you start negative and filter against that. (a) and (b) are the same description yet most readers will ‘feel’ a lot better about (a)!
So make sure that you present the best aspects of your property first, both in the advertising as well as in physical inspections. Get your buyers to make the snap ‘yes’ decision and then watch them justify negatives as not important.
Know what is happening in your market
Get out there and do research! Go online and find out what is currently listed in your suburb, how it is selling, and what prices are being achieved. Then go to open homes and take a look at your listings competition, how those properties are presented and marketed and who is inspecting them. Are there many buyers at the open home? What are they saying? Are they investors, first home buyers, upsizers?
When looking at what is listed, try to be objective and not make your own snap judgements of the relative merits of other properties. Remember you will often minimise the negatives and maximise the positives in your own property.
Don’t trust your judgement, listen to (many) experts
The best research is often in the heads of experts who have been in the market for a long time. Top agents in your area, especially those who sell properties similar to yours, will give you a good opinion on price. Get a few in to talk about your property, their impression of it, and discuss pricing and selling strategies. Do you go to auction? If so, how well do auctions perform relative to private treaty sales? What current discounting is happening and how long does it take to sell a property? What repairs and renovations need doing to get the property to the right level? A good agent should know the market and be able to justify their recommendations with the relevant facts and statistics. If you aren’t sure and want to get a completely unbiased opinion, then pay a professional – the professional valuer.
Don’t forget your valuer partners
Valuers are trained professionals who value properties every day. They are trusted by banks, lawyers, financial planners and accountants to provide a fair market value. They are a key part of the Australian property market. Selling an asset as valuable as your home justifies spending money on a valuation report from a professional valuer to get an unbiased opinion on what price it will achieve.
Choose a good agent, one you can work with
Once you have done your research and your property is ready to list, choose an agent that you can work with and who will be honest with you. Agents who position your property at too high a price will only do you a disservice, as will those who try to sell your property cheaply and quickly. You need a partner who will appropriately market your property, get enough interest going, and bring you offers from a pool of buyers at the right price. Your objective is to get a good price relatively quickly while your ‘product’ is new and fresh. You want a selling partner who you can trust to do this, and who you feel good working with.
Marketing should be appropriate
Skimping on marketing is a mistake many sellers make. You are selling a product and need to get sufficient interest up to get competition from buyers for your product. The old “Four Ps” of marketing apply – product, price, promotion and placement (distribution). Presenting your product well and setting a good price will only go so far. Promotion through advertising and placement through your agents’ database are just as important. Make sure though that the marketing is appropriate to your property and get the facts from your agent not just their opinion. What medium works? If you use the paper to advertise, what size advertisements work? If you are online, what type of online advertisements work? The RP Data media maximiser report shows that a combination of print and online generally is best for achieving selling success. Confirm with your agent what works in your area and for your property type.
Buyer competition is critical
When a buyer is the only one interested they lose urgency and will often make a lower offer than they otherwise would. They also get less sure about their decision. As a seller you want buyers to feel a sense of urgency without them feeling under so much pressure that they walk away. Create this through direct competition with other buyers, or by artificially creating a time limit on the decision. Agents often use auctions to get both a sense of urgency and a feeling of competition amongst buyers. This may work for your area, or you may need to modify the selling approach in areas where few auctions occur.
Attracting the investor
In todays’ market around 40 per cent of buyers are investors, so ensure you remove as many ‘barriers to buy’ for them. Ensure the agent has done a rental appraisal of the property and it is provided at open homes and to all interested buyers. If your property is relatively new, get an indicative depreciation schedule through your agent or from a quantity surveyor. An investor will need to look at the total cost of ownership of the property, so providing them with a rental figure and some idea of what they can depreciate against tax will assist them to make a quicker decision on your property.
Know what you want to get and don’t get too greedy
If you don’t know where you are going, any road will take you there. At RP Data we have done a lot of analysis of how long it takes to sell a property and what price is achieved. Generally, the longer a property is on the market the lower the eventual price it receives. Your property should be for sale long enough to get good interest and competition going, and then you should sell to a good offer. Ask yourself the question ‘If I don’t sell at this price and I have to wait two months longer, would I then accept this price?’ Often holding out for a few thousand more is counter-productive as you lose the interest savings from selling earlier and are often forced to take a lower price later.
Walk away feeling good
In a market as emotive as property there are always stories of spectacular returns. These are loudly trumpeted by agents and sellers, while losses are quietly forgotten. If you have worked through a good strategy and sold for a reasonable price, walk away feeling good. That positive approach will help you get into your next place and set you up for long-term property success.