Monthly Archives

May 2019

Signing a Listing Agreement?

When you choose a real estate salesperson to sell your home, you will be required to sign a listing agreement – a contract in which you agree to allow the salesperson to sell your home during a given period and at a given commission rate. The agreement says that you will pay the Real Estate Professional a fee when you sell your home. Most real estate salespeople are independent contractors who work for a company operated by a licensed real estate agent. (A salesperson is licensed to sell real estate through an agent. An agent is licensed by law to sell real estate to others for a fee and employ salespeople and other brokers.)

The amount of compensation you pay an agent is negotiable, but the real estate salesperson will usually have to follow the company’s policy regarding compensation. The amount of the fee will be spelled out in the listing agreement. Make sure you understand how the fee will be paid before signing.

Exclusive listing
Most real estate salespeople will ask for an exclusive right-to-sell listing. This means that you will owe them a commission regardless of who finds a buyer during the listing period. In other words, if you decide to sell the house to your cousin, your broker still gets a commission. The advantage of this kind of arrangement is that the salesperson is motivated to work harder to sell your home.

It’s possible that a salesperson from another company will find a buyer for your home. In that case, your agent is the listing agent, and the second agent is the selling agent. In this case your listing agent will agree to pay the selling agent a fee from the amount you pay the listing agent.

It is important to clarify with your listing agent/salesperson that they are willing to “conjunct” as not all listing agents will agree to share their commission with another agent.

 Length of listing
The listing agreement will specify how long you agree to list your house with a company. In New Zealand the standard period for a listing agreement is usually 90 days. You are entitled to opt for a shorter if you wish.

Remember that the listing agreement is a contract. You should get a copy for your records. Your Real Estate Professional is bound to the terms just as you are.

If you change your mind after signing an exclusive listing agreement you can cancel the agreement, in writing, by 5pm on the first working day after having received a copy of the agreement from the salesperson.

Selling your home in winter?

Q: We are moving overseas and have to sell before we go, which means we will be selling in winter. Our agent says it won’t make any difference but we’re not so sure. What are your thoughts?

A: Although the market is typically a little slower during the cooler and wetter months, there are plenty of advantages to selling during winter. Serious buyers will be on the lookout for property regardless of the time of year, and you will almost certainly find that there are fewer homes for sale, therefore less competition, so definitely a chance to get a premium price. However you need to make sure your house looks its best, so here’s a few things you can do to maximise your property’s potential for a winter sale:

First impressions count
The first thing a potential buyer will see is the exterior of your home, so it’s important it makes a positive impression – particularly during the winter months. Get a house-washing company to thoroughly clean any pathways or courtyard areas, and tidy up foliage and dead plants. It’s also worth giving your front door and any window frames a lick of paint prior to inspection.

Light it up
The winter months can be gloomy, so try to make the most of both artificial and natural light. Choose open-house times that will maximise the natural light within your home, open the curtains or blinds and make sure your windows are clean. Turn on all the ceiling lights and lamps and use mirrors to reflect light into dingy corners.

Feels like home
Entice potential buyers with simple winter property styling tricks such as cushions, rugs and throws to create a warm, inviting atmosphere. Consider adding a few personal touches such as freshly cut flowers to brighten up the space. Make sure the house isn’t too cold (if you have a fire or heater – use it!) wipe down condensation and keep the property well ventilated. It may be worth investing in a small dehumidifier that can be moved around the home (but don’t leave it out for open homes).

It’s all in the detail
Now is the time to make sure absolutely everything is in working order, from light fittings through to leaking roof tiles and gutters, which can cause havoc on wet winter days. Give the house a thorough clean and get rid of any dust or cobwebs. Vacuum daily, empty out the bins and polish up all surfaces.

As we said before, you can still get a premium price in winter.

Sell First or Buy First?

Q: Now that our children have all grown up and left home we want to downsize from our current property in Parnell to a smaller property. We are worried though that if we sell we won’t be able to find anything we like. What options do we have? Margaret B.

A: This is a very common question these days Margaret, especially with the shortage of houses on the market in Auckland right now.

Obviously you have two choices: Sell first then buy, or buy first then sell. If you buy before you sell you won’t really know what your budget is (you can’t be sure how much your home will sell for) and you may very well need bridging finance to get you through the period between when you have to pay for your new home and when you settle on (and get paid for) your current home. (The length of settlement is the time between unconditional date, often the auction date, and the day the new owner pays and takes possession). You can minimise this by asking for a long settlement on your new home, and then be ready to go straight to auction on your current home as soon as you have an unconditional agreement on your new home. This may enable you to get sold and settled before you settle on the new home, but what if your purchaser wants a long settlement too? Either way you do run the risk of being forced to get bridging finance. In the very worst scenario you may have trouble selling your home and end up owning TWO properties – not always ideal!

Alternatively you can do what most people seem to be doing these days: Sell first and then buy. Of course as you’ve said, the risk here is that you can’t find anything to buy once you’ve sold. However, what we have found is that people who have sold get very focussed very quickly on finding their new home, and they become a lot less fussy! And if it takes longer than you expect there is always the option of renting while you search.