There are basically three different types of market. Firstly there is the buyers market in which there are lots of houses on the market, days on market is long and there are not many buyers so therefore the buyers can be choosey and have the power to negotiate hard and quite often get the price down.
Secondly there is the balanced market in which there is an equal amount of people trying to sell as buyers trying to buy and provided your house is priced and marketed well should sell in a reasonable time frame.
Then you have the sellers market which is what we are experiencing at the moment where there is a shortage of houses and lots of buyers which creates competition and pushes prices up, quite regularly houses have more than one offer and days on the market drops dramatically. If your house is not selling in todays's market it can only be price as everything is selling.
If you are looking to make an offer on a house that is enticing to a seller my best advice would be to get your finance sorted beforehand so if possible you can make an unconditional cash offer. Some banks will still say any offer is still going to be subject to valuation even if finance is approved but the stronger you can make your offer the more chance you have of it being successful and maybe even picking up the property for less money than you expected.
Secondly if you are 100% certain that this is the house you want then i wouldn't be putting the Cooling Off Clause in the contract as this means you have an escape clause which gives the seller no security of a sale. They want to know that if they commit to you that you are committing to them. I would also try to get any builders reports done before hand, once again to make your offer more enticing, particularly in today's market when you will possibly have several other buyers in competition. I would also look at making your deposit as big as you can afford, knowing that if your finance is rejected your deposit will be returned to you. A large deposit will give the seller greater confidence that your finance is likely to be approved and show that you are serious about buying.
Also try and find out what settlement period suits the seller and work in with them if possible. Sometimes a convenient settlement date can be more important to the seller than extra money. Lastly I would say find out how long the property has been on the market and whether it has come down in price in all that time. The longer the property has been on the market, particularly if there have been no price reductions will generally mean the more likely that the owner will be prepared to or may indeed have to negotiate the price to achieve a sale.
The 'cooling off period' relates to a standard clause in the particulars of the sale document written by the Law Society of Tasmania which forms part of the real estate sale contract.
It is basically a clause which allows a purchaser to have a change of heart and to opt out of a contract they have signed to buy a property within three days of signing that contract. This is great if you are a purchaser and are uncertain or questioning your decision to purchase the property but it does weaken the contract in the eyes of the seller. When viewing an offer a seller looks at the contract as a whole - not just the price being offered so every time a purchaser adds a clause in a contract, whether it be a subject to finance clause, a builders report or the cooling off clause it does lessen the chance of the contract ever completing in the eyes of the seller. This is not a problem for a purchaser if they do not have any competition but in a buoyant market many times you can be competing against several other buyers wanting the same property. In this instance the seller will simply take the offer with the least amount of clauses which can see the contract fall over.
My advice in a buoyant market is if you really want the property, make your offer enticing to the seller by eliminating as many clauses as possible when you put pen to paper. This also means not signing a contract until you are 100% certain that you want to buy. Also things like getting your builders report done prior to making an offer will also make your contract look stronger to the seller. As a purchaser you can waive the cooling off clause at any time and it is also worth noting that there is no cooling off period in properties bought at auction.
There are many reasons why auction as a method of sale should be considered by sellers in Tasmania. Firstly an auction contract is unconditional, it is not subject to finance, valuation or builders reports and there is no cooling off period as in other contracts. The property is sold 'as is' on the day or subject only to conditions specified by the seller. The idea of an auction is that you get competitive bidding on the day, it stops buyers procrastinating and hopefully with emotions getting involved that translates into a better price for the seller. Worst case scenario if the property doesn't sell under the hammer you find out a lot quicker as to where the market sees value than with private treaty.
As no price is divulged with auction it brings in all sections of the market from one end of the spectrum to the other, from the bargain hunter to the Dream buyer whereas most methods of pricing eliminate certain sections of the market. Auction also gets buyers to look at properties which if a price was divulged the buyers own self-imposed limit as to what they wanted to spend might have prevented them from doing so. It is amazing when buyers fall in love with a house how that self-imposed limit can often be thrown out the door come auction day. Finally, with auction sellers don't need to become involved in the stressful negotiation process at all if the buyers reach the sellers reserve. If the property doesn't reach the sellers reserve then buyers basically compete against one another to win the right to be the first person to talk to the owner after the property is passed in. If you've never considered auction you should as it is a great way of selling your home.
People always ask me when the best time of the year to sell is, the reality is it doesn't really matter when you sell. More houses sell in the spring and summer months but you also have a lot more houses on the market as competition. As a percentage of houses on the market at any one time more houses actually sell in the cooler months in autumn and winter. In the warmer months gardens know doubt look better and houses look brighter but as there is less competition in winter you could also argue that you have a better chance of selling quicker and maybe for a higher price than in the warmer months.
Some buyers also like to see houses at their worst as if they look good in winter they can only look better in summer. The bottom line is it doesn't matter when you sell, the main thing is that when you do decide to sell that your house is professionally marketed, well presented and priced correctly to attract interest and create competition which will hopefully push the price up.
I am constantly being asked what is it with these huge pictures of agents on sign boards and why do house videos seem to be more about the agent than the house which the video is supposed to be selling.
The number one focus in any promotion of a sellers property should always be the property itself. Now you can't blame an agent for wanting to promote their name and business at the same time but there is a fine line sometimes between what is being promoted. My advice to you is if you are selling and the sign or video seems to be more about the agent than the property then maybe you should only be paying a portion of the cost associated with this marketing activity and not the whole amount. If the agent wants to promote their business then let them do this out of the proceeds from the commission you pay them.
The market is really quite good in Tasmania at the moment with days to sell dropping significantly. People ask me if the market is so good and there are lots of buyers do I really need to do an expensive marketing campaign with ads in print and online with sign boards and open houses and all the other stuff that goes with marketing a home.
The reality is that at the moment your agent could probably sell your property purely from their data base. The only problem with that is that you are selling in an isolated environment and to get the best dollar we want to create a competitive environment. To do this we need to tell as many people as possible about your house and hopefully get them fighting over it and therefore push the price up. If getting the best price is not high on your agenda of priorities then don't worry about all the marketing but if it is don't sell yourself short by not attracting all the potential buyers for your property.
Choosing the correct agent to represent you is very important. I have had an experience recently where an owner came to me with a dilemma of not being able to choose between a very experienced agent or a really enthusiastic agent with nowhere near the same experience. What would you choose if faced with the same dilemma of experience or enthusiasm? Obviously if both qualities came in the same person that would be the ideal situation but if not, as long as the enthusiastic sales person has received good training and has a good company to support them then I would more often than not go with the enthusiastic sales person as they will no doubt go the extra mile to achieve the best result which the other sales person may not. The best way to determine the correct agent is to get testimonials from them both and preferably talk to some of their previous clients to see what the experience was like when selling with them.
Every now and then I will have a frustrated owner come to me saying that their agent wants them to drop their price to generate interest as they are not getting any inspections. The owners frustration is that how can the agent be sure the price is wrong if no one has been through to comment on price.
Unfortunately in this situation unless the marketing of the property has been poor then the agent is probably correct. If the property is marketed well and the public are viewing the property on line and in print and not inspecting they have made a conscious decision that no matter how good the home looks that it doesn't present good value for the price quoted and they are demonstrating their thoughts by not inspecting. It is amazing how a great property can get no enquiries at all and then when the price is adjusted to spark interest that it can be run over with inspections and through competition sell quickly and for a good end price.
This is the first of 7 small videos where i discuss the common mistakes that owners make when selling their home. There are probably about a dozen mistakes which seem to be consistently repeated which can cost owners a lot of money.
Whilst in no particular order one of the biggest mistakes that owners make is choosing their agent on either price quoted or commission charged. You should always choose your agent based on who has the best strategy to maximise your price, never the agent who tells you a great price but with no plan to support how they are going to achieve that price or, alternatively choosing an agent who can only win business by charging the least. You want the best person working for you, not the cheapest. If you get a great agent their commission will not really be relevant in the bigger scheme of things. Remember the cheapest agent is the one that puts the most money in your back pocket at the end of the day, not necessarily the one that charges you the cheapest commission. Do not get value for money and cheap confused.
Mistake no.2 is over pricing and scaring potential buyers away. The essence of any pricing strategy should always be to draw people in to look at the property, not to scare them away as an agent can not earn their commission if they don't get a chance to negotiate the best possible price on your behalf. Mistake no.3 would be to not adjust the price quick enough if you have got it wrong. You will know within a couple of weeks, in a buoyant market even within a week if you have got the price wrong. If you have priced the property too high you need to adjust to the correct price quickly whilst the power to negotiate is still with you.