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Selling Your Property

Psychology of Auction: Social Proof!

Psychology of Auction: Social Proof!

We are often asked about how auctions work, and what makes a good auction so thought we would share the following article that we wrote for another publication:

Have you ever wondered about the psychology of auctions? Have you heard of “social proof? If you understand it you can use it to your advantage.

If you attend any auction across Auckland there’s a good chance you’ll see the following scenario play out –

Auctioneer: “Who wants to open the bidding?”

Crowd: silence

Auctioneer: “Who wants to start it off!”

Crowd: silence

Auctioneer: “Surely you haven’t all come just to see me!”

Finally someone calls out a bid, or the auctioneer makes a vendor bid, and all of a sudden there’s a flurry of hands in the air.

Auctions are a great example of ‘social proof’ – a psychological phenomenon where other people’s actions reinforce one’s own decisions. Imagine you’re heading out for breakfast and there’s two café’s side by side – one is empty, and the one next door is full. You are more likely to choose the busy one, because the assumption is made that something must be wrong with the empty cafe. It’s the same at an auction – if nobody is bidding, it can sometimes (often subconsciously) make people question their own judgement. As soon as someone else has put their hand up, it provides validation that no: there’s nothing wrong with the property, and yes: other people do see value at that price thereby triggering the other potential buyers in the crowd to join in.

Social proof can go both ways. If there’s active bidding it can signal to others that the property must be desirable and it’s worth fighting for, often encouraging people to stretch beyond their original budget. But if there’s no bidding, it can sometimes result in a property being passed in, even though there are people in the crowd who have every intention of buying it. Without the social proof of competition they freeze up, second guess themselves and begin to have doubts. We’ve seen many properties pass in on a vendors bid, only to have multiple parties then go inside to negotiate against each other.

The moral of the story is don’t let other people’s lack of interest in a property put you off. If you like the property, you can afford it and you’ve done your due diligence, then go ahead and buy it!

Questions? We have lots of information on our website at www.thestones.co.nz/property-tips

Building Inspection: Standard Clause or Additional Clause?

Building Inspection: Standard Clause or Additional Clause?

Q: What is the difference between using the Building Inspection clause on the front of the standard sale and purchase agreement, and inserting a building clause in the “additional clauses” section? Which would you recommend to a purchaser? 

Raewyn T.

Good question Raewyn. Firstly, there is no obligation to use the standard clause rather than your own ‘custom’ clause (which you can insert under Further Terms of Sale). Formerly your agent or solicitor would draft a clause to go in the further terms of the agreement and the terms of the clause could vary. The new standard clause (clause 9.3 in the agreement) is designed to protect both vendor and purchaser from possible misuse of a custom written clause. The main points are:

    • Written report required: The report must be in writing and must be provided to the vendor immediately should the purchaser decide to void the contract on the basis of the inspection. Note, however, that the new clause does not give the vendor the option of rectifying any defects.
    • Suitably qualified builder: The clause states that the inspector must be suitably qualified, so no getting your mate to have a look over the property if they are not a qualified builder or building inspector.
    • Ability to cancel (objective test): The clause also states that the purchaser must decide whether the report is unsatisfactory on an objective assessment – that is, would any reasonable purchaser, on reading that report, have found it unsatisfactory? The answer must be yes to cancel validly.

So those are the main elements of the clause. Of course, as a purchaser, you may want to have any minor defects found to be rectified by the vendor, or even negotiate a price reduction, and you will still have that right. However, as a seller, you need to be aware that this clause does not give YOU the right to rectify unless the purchaser agrees.

If the above points don’t suit, you are still at liberty to have clause 9.3 deleted and have your lawyer insert your own building inspection clause under Further Terms of Sale. You may want to do this because you have a friend who you feel is qualified to look over the property, rather than paying for a full building inspection. Or if you are a seller and you want the option to rectify any defects identified rather than having the purchaser being able to cancel the agreement automatically.

Whether you are buying or selling, as with all contracts, it is best to get your lawyer to check and explain the agreement to you to ensure you understand what you are signing and that your interests are protected.

Who’s Looking after Whom?

Who’s Looking after Whom?

Q: We have recently sold our house and bought another. Dealing with different sides of these two real estate transactions has been a little confusing. When we sold we dealt exclusively with the agent we were selling with, but when we bought we used a buyer’s agent and yet we still had dealings with the seller’s agent? I’m interested in whose best interest’s agents are meant to represent.

Danny Y.

A: Great question Danny. Real estate salespeople tend to operate in three ways:

  • Representing only you.
  • Representing another party (a prospective buyer) involved in your sale.
  • Representing both sides – the buyer and seller.

Also called a listing agent, the seller’s agent works for the person selling the home. The agent will list the home, hence the name, and will work to find buyers and eventually sell the home. The owner of the home typically pays the seller’s agent a commission in the form of a portion of the sales price.

In this case, the agent owes the seller undivided loyalty, reasonable care, obedience to lawful instruction, disclosure, confidentiality, and accountability. A seller’s agent must put the seller’s interest first. They must attempt to negotiate the best price and terms acceptable to the seller. While doing this they must treat all potential buyers fairly: They cannot be dishonest or misleading in their dealings with prospective buyers.

Kiwis tend not to use true buyers agents: A buyer’s agent works exclusively for the buyer, not for the seller, and most importantly, is paid a commission or fee by the buyer. Buyer’s agents can be quite helpful for buyers who are out of town, or not resident in NZ.

What often happens in NZ is that a buyer will see a house they like and will ask a real estate salesperson who they know and trust if they can show them the property. The salesperson will then contact the listing agent to see if they can do a conjunctional (i.e. split the listing agent’s commission). This is usually at the discretion of the listing agent, but in the interests of getting their client’s home sold most will agree. If successful the agent representing the buyer will then be paid a portion of the listing agent’s fee. They have a responsibility to both buyer and seller but will obviously be focused on making your purchase of the property as simple as possible.

I hope that helps – the main thing is that all agents have a responsibility to treat everyone in a real estate transaction fairly and honestly, whatever their role in the transaction.

Where Should my Property be Advertised?

Where Should my Property be Advertised?

Q: I’m about to list my property for sale and I’m concerned about getting it marketed properly so that my home sells for the best price.  What should I be looking out for? Bruce F.

A: It is really refreshing to hear someone asking about how best to market their property. In our opinion, a comprehensive marketing campaign is the first, and possibly the most important, step in getting a premium price. There are three main areas to cover: Online (realestate.co.nz,TradeMe, etc.), print Property Press, NZ Herald, Epoch Times, etc.) and social media (FaceBook).

Advertising online will certainly get you in front of buyers, but these buyers are actively searching for a property and you need to have ‘passive’ buyers too. And passive buyers come from print advertising (like Herald Homes). By the way, make sure your agent uses a professional photographer to take the photographs of your property and make sure he has someone complete a floor plan. This is all about making sure you get as many people to view your home as possible – amateur photos will not do the job.

Check the copy for print advertising. Your agent should run this by you prior to having it submitted to the magazine or newspaper. People make mistakes, so check spelling and grammar carefully. Do the same with advertisements as soon as they appear online.

Facebook: Your property needs to be marketed on Facebook. Not many agents know how to market on social media, so make sure your agent has a plan, and check them out on Facebook to see how many followers and interactions they get. Again, you do not need to be on Facebook to get your home sold, but if you want to maximize your exposure to produce more bids on your home, you cannot afford to miss out on this great exposure. If your home is not actively featured on a highly trafficked Facebook Page, tell your agent to make it happen right away.

Don’t be fooled by a low-price marketing budget – make sure all your bases are covered so that you reach as many potential buyers as possible.

We wish you a Merry Christmas and a very Happy New Year.

Don’t just use the cheapest agent to sell your property!

Don’t just use the cheapest agent to sell your property!

 Q: Hi, we are looking to sell soon and are interested in your thoughts on how to choose an agent. Commission rates vary quite a bit, but we are wary of choosing the cheapest.

 Ronald and Jane L.

 A: Selling a property is usually a stressful time, and knowing who to sell it with can make all the difference.

The process of deciding on an agent begins with doing some research. Many people feel they need a local agent: Today it’s far less about which agent knows more about the area and recent sales because all of this information is available online. What is far more important is that the agent has the key skills (sales, negotiation, marketing, and technology) and a good success rate (i.e. lots of successful sales) backed up by client testimonials.

For your part, it’s also a good idea to research homes for sale in your neighborhood – and how much they are selling for. It’s even better to attend a few open homes, and auctions, as this will allow you to see how well the different agents conduct themselves.

Then you should get up to three different agents to appraise your property.

Agents appraising your home will use comparable sales to provide you with an estimated selling price for your home in the current market. Don’t allow yourself to be swayed by a flattering price. This is a common tactic to get the listing, followed by plenty of communication re how the market is not seeing the price at that level.

An appraisal also provides an opportunity for you to ask agents what services they provide, the strategy behind their marketing and advertising campaign and what their commission fees are.

When looking into commission fees don’t let commission make up the bulk of your decision making, as while you may want to find an agent who asks for the cheapest rate, the cheapest agent may not necessarily be the best agent.

As mentioned above: Focus on the agent’s skills and on their success rate.

A skilled agent can negotiate the final sale with one or more interested buyers, achieving the best possible outcome for what is possibly your most valuable asset.

Trying to sell your house ‘on the cheap’ is very likely to cost you significantly in the long run.

Why isn’t my Home Selling?

Q: We put our home on the market 3 months ago (auction) and had no bids. Since then we have put a price on it, but we haven’t received even one written offer. Our agent is a lovely lady but we just don’t seem to be getting anywhere. Any suggestions? Diana C.

A: There is nothing as frustrating for a home seller as their home not selling, and I’m sure your agent feels the same way too!

There are a number of possible reasons, but the most obvious is the price. If you have been through an auction campaign and had feedback at say $1m and you are holding out for $1.2m then maybe that’s your problem, especially if the market is not on the rise. We are often confronted with a potential seller who has based their price on what the house owes them, or what a neighbour’s property sold for. The sale price is determined by the buyer, not the seller I’m afraid.

Another reason can be your choice of agent. There is no doubt that a good agent will get you a better price than an average agent, and in a tough market such as now, this is even truer. We have written before about choosing the right agent for you, and as we say, it’s even more important in the current market. Certainly, make sure they have a good rapport, but also check their listings to sales ratio: How many properties have they taken to market this year, and what percentage of them have sold? Over 80% or 90% is good.

There may be a whole raft of other reasons you are still on the market. People will tell you that presentation makes a big difference, and it does. But the price will always trump any other reason: If your home needs a $100,000 makeover then it will be reflected in the price. Drop the price by $100k and you will very likely sell. If you want to spend the $100k doing the makeover you may find it easier to sell, but not necessarily for an extra $100k!

We’re sorry you haven’t managed to find your buyer, but keep an open mind and think hard about what you are willing to accept in order to move on.

Next week we will talk about what your rights are in terms of a listing with a sole agency.

Selling a Property

Q: I’m looking at selling a property by auction. Last time I sold was over twenty years ago so it’s all a bit new to me. How long will it all take? Darryl H.

A: If you are in Auckland you will find that most agencies suggest a three week marketing campaign (three weekends of open homes) with the auction being held, usually, mid-week following the last open home. But before this they will need about a week and a half to organise professional photography, book press and gather the necessary property information (title, LIM, council property pack) – so allow up to five weeks from signing the listing agreement until you are sold. If you sell under the hammer you will normally receive a deposit of 10% of the sale price. This is held in the agency’s trust account for 10 working days before being released to your solicitor, less the agency’s fee (commission). The balance of the sale price is payable by the buyer at settlement, which can be anything from several days to several months or even a year or more, depending on what you have arranged prior to the auction.

Q: I am curious about auctions. Is it best to have them in rooms or on-site? And what exactly is a “vendor bid”? Danny S.

A: What a great, topical question – especially with all the talk in the media about how auction clearance rates have dropped in the past few weeks. Auctions are a very popular method of sale in Auckland and it surprises me how some agents fail to explain the process to their clients when it is so important to the sale. We almost always hold our auctions on-site. This helps in several ways: Firstly, it is all about your property – it’s not lost amongst another 20 or 30 properties. It also means that we can take as long as we need to take bids and negotiate. Did you know that can take over 40 minutes to add $100,000 to the price in bidding increments of $1,000? You don’t get that opportunity in an in-room auction where there can be a time-limit of less than 10 minutes per property. (It always amazes me that people are willing to spend just 10 minutes auctioning a property after spending so much time and money on open homes and marketing.) The extra time available with on-site auctions also gives us the opportunity to re-inforce potential buyer’s emotional attachment to the property. We open the property 30 minutes prior to the auction and have plenty of time to introduce the auctioneer and allow them to re-engage with the property as they walk around “their new home”.

A Vendor Bid is essentially a bid made by the auctioneer on behalf of the seller. It must always be announced as a Vendor Bid by the auctioneer and must always be under the reserve price. We firmly believe that vendors should be allowed to take advantage of their right to have the auctioneer to “vendor bid’ on their behalf. What it means is that the auctioneer can get auctions going and build some momentum when there is maybe just one buyer for the property. We have found that in recent times, with fewer buyers at auctions, a vendor bid is invaluable in getting the auction moving. This is borne out in our auction clearance rates: Our office clearance rates for auctions for the past 3 months is well over 85% (most, but not all, under the hammer). In terms of our own (The Stones) last 4 weeks of auctions – 5 properties – all sold under the hammer with the exception of one selling 24 hours later. All auctions are not created equal!

Q: My agent has told me that the best time to sell is in winter but I think my house looks better in spring – is he just trying to get me to sign up now or is it true? Jenny F.

A: There is no doubt that most houses look better in spring and summer, but unfortunately that means that most people decide to go to market then. The property market is like any other market – it’s all about supply and demand. So because demand is high (as it is now in Auckland – all our open homes are really busy) and supply is low (because so many sellers are waiting for spring/summer) it is a great time to be selling. Things will change in another few months, especially given the law changes coming up in October (more on that later), so my advice would be to go to market now and take advantage of the shortage of supply.

Q: Is it better to sell my house through an ‘exclusive’ listing where just one agent lists it, or should I engage several agencies? Seems to me that the more agents involved the more buyers I will get. Thanks, Jeremy W.

Good question Jeremy. In my opinion you should go with just the one agent. A good agent will ‘conjunct’ (i.e. share the commission with any other agent who brings a buyer along) so you will not miss out on any potential buyers. When a listing is shared by several agents/agencies (i.e. a ‘general listing’) you will find that they will all expend some effort for the first couple of days and then often forget about you and move on. When you list with one agent, and invest in some marketing, the agent knows you are serious about selling and will really try to get you sold. At the end of the day, if you show 100% support for your agent then they will show 100% support for you.

Q: I am looking at listing my house for sale. Can you give me some ideas on how we can get it ready for sale? I’m particularly interested in whether it’s worth staging the property. Raewyn L.

A: Good question Raewyn. We cover this comprehensively in our book “Sold” so I am sending you a copy, but in the meantime, here’s the short answer.

Firstly, we would highly recommend that you have your property staged (or ‘dressed’) if you’ve moved out and it’s vacant. This really is a no-brainer and you will get a return on your staging ‘investment’. If you are still living there and worried about your furniture being up to scratch there are companies that specialise in staging properties using existing furniture complemented by their own additional items (throws, rugs art etc). If you are happy with your furniture and your agent tells you it all looks fine then here are a few cost-free things you should do, at little or no cost: Nothing will scare off a potential buyer faster than a dirty home. Though some agents will recommend that you hire a cleaning service for a top-to-bottom deep clean, you can save money by taking care of this on your own, provided you’re willing to put in the time and elbow grease: You have to pack to move anyway, so you can get a jump start on it by gathering any and all personal decorative effects. This includes framed family photos on your walls or shelves, picture albums and all your personal knickknacks. Buyers like to envision themselves living in your house, and that’s much easier without things that remind them of you. Living a normal life requires a fair amount of stuff, but you’ll need to keep all signs of being a regular person hidden while your house is on the market. Once you’ve finished packing away your personal items, use your spare time to pack anything you don’t need on a daily basis. Clear shelves of books, pack away rarely used games and DVDs, and remove out-of-season clothing to make closets look more spacious.

If you live with young kids, have them choose their favourite toys to keep on hand, but only allow ones that can easily be stowed away under the bed or in a toy chest out of sight when your agent calls with a 15-minute warning for a surprise viewing. For adults, clear a bathroom and kitchen drawer that you can sweep counter clutter into in a pinch. If you’re willing to spend the time and put in the effort to stage your home, you can make your house appealing to prospective buyers without spending any money at all.

Q: I am thinking about selling privately but I’ve been told there are potential legal issues I should be aware of. Can you tell me what these are? Andy C

This is a question for a lawyer and Nick Birdsey, of Birdsey & Associates has kindly agreed to answer it.

A: There are many reefs under the waves in selling your property without professional help. The Agreement for Sale and Purchase has many obligations in the “fine print” and needs the correct clauses and conditions. These deal with potentially minefield vendor topics such as compliance or otherwise with local authority matters, for example, additions and alterations. Purchasers may want building reports and LIM reports, and all these clauses have to have the right wording. Timing too is important- tenancies have time limits which can trip you up. We have even had to point out that settlements do not happen on the weekend, banks need to be involved so that mortgages are discharged! When it comes to the Title, you should be aware that there can be still more fundamental title issues with properties such as cross leases (that apparently harmless carport can cause lots of headaches!) and Unit titles. These should be addressed before pen goes to paper on the Agreement or it may end in tears.  In summary, the use of experienced professional agents and lawyers will give you real peace of mind.

Q: My husband and I are thinking hard about moving out of Auckland, with the hope of becoming mortgage free. This means selling our home in Remuera and moving to somewhere like Tauranga. I understand this is happening a lot – do you have any suggestions on where best to head and where we could get the best value? Jenny M

A: You certainly are not alone Jenny! With the median price in Auckland in December last year at $867,000 (according to REINZ) it’s no wonder people are looking to move out if they are not tied to the city for work or family reasons. In the past six months we have sold homes for people who have moved from Auckland to Mt Maunganui, Hawkes Bay, Queenstown, Keri Keri, Cambridge, Dunedin, and more. Two of our recent vendors have even moved to Queensland.

But let’s stay local for this. As you will have read, many of the regions have had very strong increases in value, while some have stayed quite stable. REINZ statistics show that Queenstown has had a huge increase from December 2014 to December 2015: 54%! The median price went from $490,000 to $752,000. If you want somewhere cheaper (and warmer?) you could try Keri Keri. The median price there moved from $400,000 in December 2014 to $515,000 in December 2015 (29%). Although Tauranga and Mt Maunganui have been hitting the headlines more than most other areas they aren’t so bad. The December 2015 median price in the Mount/Papamoa was $560,000 up by 24% from the previous December, while Tauranga was up by 16% to $470,000. Further away, and far less expensive is Gisborne: The median in December ’15 was just $238,500, down from $255,000 the previous year. Napier also seems like good value at $345,000, especially being close to the vineyards!

Of course all we have compared here are median prices, we haven’t taken into account whether you could find work, you like the area or can find the perfect house for you.

What the numbers do tell us though is that you could potentially pay off your mortgage, or certainly reduce it significantly by moving out of the Auckland region. Hope that is of help Jenny, and good luck with your search.

Q: I’m looking at selling next year and wondered if you have any advice on how to choose the best agent to sell my home? Steve H.

A: What a great question – especially to ask a real estate agent! We cover this off pretty thoroughly in our book ‘SOLD, How to Sell Your Home for the Best Price’, so I’m sending you a copy. For everyone else reading this here is a bit of a summary. This is Part One – Part Two will follow next week.

Before you choose your agent think about what is most important to you: the best price, the simplest transaction, the shortest sale time, the least stress, or probably a combination of some of these.

The next step is to interview at least two agents, preferably from different agencies, to see how they will meet your requirements in terms of what is most important to you.

Most people are most concerned about getting the very best price and many focus too much on costs (commission and marketing) instead of getting the best sale price. A really good agent will more than make up the difference of a few thousand dollars in fees when they sell your house for tens of thousands of dollars more than the ‘cheaper’ agent, and a good agent will be very reluctant to discount. The same goes for marketing. The question of ‘costs’ should be the least important on your list, and here it is:

What is your listing to selling ratio? (I.e how many properties that you take to auction do you sell?)

What is your marketing plan? How will you make my home stand out from all the others on the market?

How many potential buyers do you have on your database?

How do you use technology to reach potential buyers?

How will you keep in touch during the sales process?

What sets you apart from other agents?

What is also pertinent in today’s market is: What is your auction strategy if you have only one buyer? And do you use vendor bids?

Next week I will run through some of the answers you should expect, whether or not you have to really like the agent you engage and lastly, what is important in an agent from an insider’s point of view.

  1. We are thinking of selling our home of 40 plus years. We’ve never sold a property before and are a little concerned about the whole process, especially from a stress point of view. Can you offer any advice?

Some people get emotionally attached to their cars and have a hard time selling them. To get an idea of what it will be like to sell your home, magnify that reaction by about 100 times!

The first thing to do is to understand that it will be stressful and be prepared for that.

Next talk to a few real estate agents: I’ve covered what to ask them in previous articles, but for you the main thing is to find someone capable (check out their testimonials and success rates – especially for auctions) and who you feel you can really relate to. Then listen carefully to their suggestions. And don’t let them push you: Wait until you’re ready.

Maybe you have no choice but to sell — which can be even more difficult emotionally. Get as much support as you can from friends and family. Be honest with your real estate agent about how difficult this is for you. The more information you give the agent, the more they can work around any potential problems.

When you are emotionally attached to your home, it’s difficult to see it as a product. But that’s what it is — something you have to sell and that, with luck, others will want to buy. You can also get in your own way of succeeding.

Often, a seller who isn’t emotionally ready to sell will insist on wanting more than the market will bear. This is why it’s imperative that sellers should be emotionally ready to sell; when they aren’t, they can subconsciously sabotage the process. We’ve seen many instances where a home has been on and off the market for over a year with multiple real estate agents and approaches to selling it. What started off as an overpriced home ended up selling for a bargain to a buyer who capitalized on the seller’s mistake.

So the message is: Choose a good agent who you trust to help you, and listen to their price feedback.

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!

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.