The hot housing market has led to a sense of complacency for some vendors but that means they might miss out on the best price for their house, agents say.
David Ding, from Harcourts Cooper & Co on Auckland's North Shore, says even when houses are selling fast vendors can make basic mistakes by over-valuing their property and rejecting good auction bids, or by not bothering with the basics of presentation, which can impact the price achieved.
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“Lots of vendors say to me, ‘Oh, the market’s very hot, look at what OneRoof says, look at what the media says, I’m not going to do anything, you just bring me the gold, you bring me the magic’.
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“Especially in this market some vendors think, ‘I’m going to get the gold anyway’, so they ignore the presentation.”
In one instance one of Ding’s vendors thought his property would sell because of the robust market conditions so left the tenant in the property. However, a decision like this can lead to access issues and also presentation problems compared to vacant properties which have been staged.
In another case, Ding says a house with a tenant sold in the low $800,000s whereas a similar vacant property next door sold in the high $800,000s.
“It’s the vendor’s effort,” says Ding. “Because the market is pretty hot they’re not willing to put as much effort as last year. They’re all hoping for the magic but they’re not putting the effort in.
“It could be somewhere between five to 10 per cent difference. It’s just like I always make my hair before I go to a presentation. It’s kind of the effort you put on yourself. That’s life as well. If you don’t put in effort, don’t expect the magic to come in.”
Auckland’s property market has turned hot. Photo / Fiona Goodall
The other big mistake is having extremely high expectations around price. Ding has marketed properties recently which got a great price at auction only for vendors to reject the top bid then go on to take less for the property.
“Each vendor thinks their house is [worth] $1.5 million at the moment, regardless of the property. I think the biggest mistake is over-thinking the property value.”
Another key tip is to get a local expert as an agent, Ding says.
“In my area I saw someone who sold a property for $850,000 which should be in the high $800,000/low $900,000s. Local agent, local knowledge is always important. The local agent should be able to give you some local experience.”
He advises vendors to do their own due diligence and to know their area and market then choose an agent who also has that local knowledge rather than going with someone from across town.
Steen Nielsen, from Ray White Remuera, says his key advice to vendors is to market the property properly.
“It’s very tempting to take the easy option and just sell it to someone from an existing client-base through an agent, or to someone privately, but they do miss out on the broad market and the competition compared to if they market it well and go to auction with it.
“Some of the results we’re achieving in these markets here are mind-blowing at the auctions and it surprises us when it sells easily 10, 20, 25 per cent above our appraisal ranges simply because the right people have been there competing for it.
“If people don’t cast the net as wide as possible they are going to miss out.”
Ray White Remuera agent Steen Nielsen says presentation is key. Photo / Ted Baghurst
While people can always accept an offer during the marketing process in order to shorten the sales time at least the property has been out there and advertised so people can compete, because that’s where the real premium lies, Nielsen says.
Nielsen also talks about the importance of presentation and always takes an interior designer through when he gets a listing, saying sometimes staging the property is the best investment a vendor can make.
He also advises getting a video made which is especially important for overseas buyers, but says don’t just stick to online marketing.
“There’s a huge market out there I call the passive buyers so they’re not really searching the websites but they’re picking up the Herald, so the printed media is crucial because the passive buyers are often the more attractive buyers.
“They’re a bit more emotional about it. They haven’t researched the market for the last six months but they know what they like and they’re in a position to buy. I think that’s so important.”
Vendors who ignore advice may miss out on that premium price, he says. “It’s so important people understand that one buyer more in that auction process can make a difference. Every bid is $10,000 at least so two or three bids from them, you know, it makes a big difference.”
