Getting Ready For Sale

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.

Getting Ready for Sale

Q: My wife and I have several investment properties and we are thinking of selling one. It has been rented for many years and needs a makeover before we sell. Any advice? Thanks Jerry C.

A: Renovating as an investor demands your personal wants and needs are put aside, with a focus on the bigger picture instead. Where your own home may allow you to indulge your every design whim, renovating an investment property demands a considered approach that appeals to the broadest possible target market.

Make sure you meet the market, and your competition, in regard to expectations for the property. If it’s situated in a blue-chip area, it pays to renovate with a more high-end spec as the market demands and expects it. Likewise, if your project is in a cheaper or more affordable locale, be sure not to over-capitalise.

Mass appeal

You can never go wrong with white, and timeless finishes can easily be made appealing to the individual market with clever styling. Cupboard fronts, bench tops and floors are very expensive to replace – keep them neutral to appeal to the largest subset of buyers. You want people to imagine themselves in the home and a neutral palette allows them to project their own ideas onto the space.

Key areas

When it comes to deciding which rooms to renovate, bathrooms and kitchens are key, as are outdoor living spaces if applicable to the property. And with these spaces, it is not all about expensive finishes – functionality is just as important. With the popularity of home renovation shows, buyers are a very savvy bunch now and many will immediately notice if a bathroom layout is dysfunctional or inefficient.

With our enviable climate, the outdoors is such an integral part of the modern Kiwi lifestyle. If there is a way to blend your outdoor space seamlessly with the inside, do it. Think large areas of glazing that take in the outdoors, or bi-fold doors that open onto a deck.

Also, don’t forget your property’s façade. Most buyers usually make up their mind about a property upon arrival. As such, addressing its street appeal is very important in reeling potential buyers in.

It sounds obvious but you must always look at ways of adding the most value when renovating as an investor. If you add value to the property, you are more than likely increasing its sale price too.

Q: I am thinking of selling my 1970’s-built home in Glen Innes. There are a number of new houses being built close by and I’m wondering whether I should wait for them to be finished or just get on with it now? Pauline J

A: Interesting question. The market is good at the moment, and I think it will stay that way in the medium term, albeit with maybe a few little ups and downs. The great thing about having new-builds in your neighbourhood is that it will increase the median value of homes around you, including yours, even while they are in the process of being built. So it’s probably not a bad time to be selling right now. Of course once they go on the market it is a great time for you to be selling – new homes will attract more buyers to the area, and of course to your property if you are on the market at the same time. A smart real estate agent will time your open homes so that you get the overflow from the other open homes – most open home visitors will look at another open home across the road if it’s open at the same time. In general terms more people through the open homes equals more bidders at auction equals a higher price! Good Luck!

Q: We are looking at selling our home of 12 years on the North Shore, and are talking to a couple of estate agents re how to sell. We are originally from the United Kingdom and have only bought the one home here and have no experience of selling here. Both agents have said we should hold open homes, but we are really not sure.  Catherine G.

A:  There are pros and cons to open homes Catherine, but in our opinion the pros win, and not just for sellers, but for buyers too. Firstly, open homes, like auctions, are an accepted, and often expected, way of marketing your home. Most buyers these days like to schedule their weekend afternoons going through a list of prospective homes, and what better way than to go from open home to open home? If they don’t like it they can turn around and walk out without feeling under obligation to the agent. If they do like it they can arrange to view again at whatever time suits you. And of course potential buyers can ask to view outside of open homes if they can’t make the time on the weekend.

The real benefit to you as a seller is that you have scheduled viewings on a Saturday and a Sunday, rather than ad hoc viewings every day of the week. You can go out shopping or for a coffee and know that 30 or 45 minutes later your home will be free for the rest of the day. Of course there will always be those buyers who want to come back on their own, or with other family members, and serious buyers may well want to organise a building inspection outside of the open home.

Open homes also gives you and the agent to show that your home is popular: A busy open home sends a message to all the buyers that the property is popular, which in turn makes it more desirable to viewers.

As long as you select a good agent, who has produced a good marketing plan, you will get plenty of people through your open homes, which in turn will ensure you get the most number of people at the auction and the best possible price.

Good luck with your sale!