Having managed property sales for vendors since 2004, we have seen many different approaches to selling property – some work and some don’t.

I thought I would share four common mistakes we have seen.

1. Not knowing the current market value

Most of us think our property is worth more than it probably is, which is entirely understandable.

Buyers can readily assess the worth of a property as there are multiple websites providing recent sale results and estimations of a property’s value.

Where the asking price is too high, buyers are unlikely to spend time investigating the property further. It becomes stale in the market and buyer enquiry falls away. Once this happens, the vendor must lower the asking price in order to find a buyer. Time and advertising money will have been wasted.

In a period when property prices are rapidly increasing (yes it does happen), people can get out of touch with values. An easy mistake is to have a long term ‘wish price’ in mind, and not realise that the current market has exceeded that price. Unless it is properly marketed, they can miss out of achieving its full value.

This happened to a friend of mine some years ago. He was approached by a prominent Melbourne estate agent to ‘name his price’ on his property. He nominated what he thought was a high price. The agent quickly came back with a buyer at that price, and my friend felt morally obliged to complete the sale (notwithstanding my advice to the contrary). To my friend’s dismay, the property was on-sold by the agent prior to settlement giving the purchaser a significant profit.

I shall leave you to decide on the agents’ morals.

We assist vendors to arrive at a realistic price expectation for their property, based on recent comparable sales in the area and what is currently on offer.

2. Selling off-market to a ‘friendly neighbour’

The attractions of a quick sale, saving money on marketing costs and no agents commission, can be appealing to a vendor.

However, we say, ‘vendor beware’, as they are unlikely to get the best sale price for their property, even after the reduced sale costs are considered.

We are often approached by people wanting to purchase a property ‘off market’. We usually don’t recommend this approach to vendors, as the only sure way of finding the value of a property is to offer it to the market (usually by auction). Afterall that neighbour will still bid at auction if they really want the property. You don’t know how much more they would pay under competition, or how much someone else would pay.

The only sure way to maximise the price is to offer it to the market following a reasonable marketing period (usually four weeks).

3. Using an ‘out of area’ agent

We always say it’s best to ‘go local’ when choosing an estate agent to sell a property, rather than a ‘fabulous’ agent in a different area.

Often our clients have a connection with an out of area agent who they think is terrific.

We obtain marketing proposals from at least two agents active in the area selling similar property to our client’s property. We also may include the vendors’ nominated agent, but rarely find they have the best marketing submission. The benefit of using a local agent is that they are dealing with more buyers in the area, and you get the indirect benefit of the marketing of other similar properties by the agent.

The local agent is likely to be familiar with recent comparable sales (which may not have yet been reported) and other properties currently on offer in the area.

4. Not staging a property for sale

Sometimes vendors are reluctant to spend the $3,000 – $6,000 on having their property professionally staged with hire furniture. Unless the property is land value only, staging it will assist in maximising the sale price.

In our view,
(i) a house looks bigger and more inviting with furniture;
(ii) strategically placed furniture can cover up minor blemishes such as marks in the carpet, wall cracks etc;
(iii) buyers will like a property if they can imagine living in it as furniture improves the appearance;
(iv) display homes are always furnished, which tells you what the professionals believe; and
(v) other similar properties will probably be furnished which puts an unfurnished property at a disadvantage.

An attractive and appealing property will always sell faster and for more than one that isn’t.

I hope you find this informative and of some practical use. There are other ‘mistakes’ vendors make, and I’m happy to share them with you. Complete the contact us form with any questions and I can cover them in my next blog.

Regards,
Robert Allanadale
Director
m: 0418 517 643

TOWER Property Advisory
Tower Property Advisory is an independent consultancy that specializes in managing the end-to-end process of property sales on behalf of Vendors