Home Inspection News – Issue 21

September 2018 House Price Sales

September recorded the lowest level of residential property sales for 8 months because of the low number of properties for sale. The numbers were down 3% compared to September 2017. As far as prices are concerned nationally they were up 5.9%. For Auckland prices were the same as September 2017.

While the numbers of sales nationally were down in 14 out of the 16 regions in New Zealand, prices were up compared to September 2017 and 4 regions set record median prices. The 4 were:

Gisborne + 29.6% up $72,500 from September 2017 to $342,500.
Nelson + 23.1% up $111,000 from September 2017 to $592,000.
Manawatu / Wanganui + 18.9% up $51,000 from September to $321,000.
Hawkes Bay + 13.5% up $53,000 from September 2017 to $445,000.

The median number of days to sell increased from 34 to 36 days across New Zealand compared to September 2017. Auckland also saw a 2 day increase from 37 to 39 days. The interest levels from first home buyers and investors are both reported to be on the rise according to the Real Estate Institute of New Zealand.

The number of properties listed for sale in September increased significantly and this usually results in higher sales in the following months. Higher sales levels can be expected up until Christmas.

 

The Seven Costly Mistakes
House Sellers Make and How to Avoid Them

Costly Mistake 1 – Not preparing and presenting the house and garden properly for sale

First impressions are very important. A potential buyer can be put off by a property that is not clean and tidy with a tidy garden. Remove clutter. No dirty washing up in the kitchen, no tea towels hanging on the oven door. Take all the clutter off the fridge door, which is held on by magnets.

Do any minor repairs before presenting it for sale. Fix sticking doors, loose door handles, dripping gutters, etc. They either put buyers off or reduce the value of the house in their eyes. Have the exterior of the house washed down if it is at all dull.

The cost is money well spent if you don’t want to do it yourself. Keep flowerbeds and lawns as tidy as you can. Smoking and pets can introduce odours, which the smoker and pet owner doesn’t notice but potential buyers will. It may be inconvenient but worth thousands of dollars, so keep pets out of the house when buyers/agents come to inspect.

Have a good air freshener plugged in or spray before inspections. Don’t try to mask odours with strong smelling fresheners, as it is a dead giveaway you are hiding a bad odour.

Costly Mistake 2 – Pricing the house too low 

It seems obvious, but does happen. When the market is moving quickly and prices are rising, it’s all too easy to sell below what could, and should have been achieved.  2013 in Auckland, showed an average rise of 12% with some suburbs even higher than that. That’s a 1% rise per month.

Suppose you determined the value of your home based on all the recent sales over the last 3-6 months in your area. If on average, most of those sales were 3 or more months ago, then yours should be worth an extra 3% or more today. 3% doesn’t sound like much until you work it out:

$400,000 house x 3% = $12,000, $500,000 house x 3% = $15,000 and $1,000,000 house x 3% = $30,000. 

Costly Mistake 3 – Choosing the wrong Real Estate Agent or too many agents

There is strength in numbers! Two is a crowd! Which one is it? Well, choosing a well-known real estate agency over a little known one makes good sense. Most of the well-known brands have offices throughout the country and that’s a bonus because buyers may be transferring to your town from another part of the country.

Two is a crowd. If you employ more than one agent to sell your home, neither will be motivated just as strongly as one. Only one is going to get a commission, the other will get nothing. A 50% chance of getting nothing does not motivate an agent too much.

All sales people are not equal. In every agency, there are agents who are selling lots of houses and others looking for another job because they can’t make a living. Since you will be paying the same commission at any given agency, make sure you choose the sales person who is selling lots of property.

Costly Mistake 4 – Pricing too high at the start

We can always come down in price later can’t we? Yes, but the best possible opportunity to sell for the best price is when a house first comes onto the market. At this very time, there is a pool of buyers out looking for their next home.

This pool consists of people who have perhaps just arrived from overseas with the money to buy, people who have sold their home and need to buy before they move out and renters who have saved the deposit and don’t want to pay any more rent.

They are all keen and want to buy NOW. If they see your house or is shown it by an agent and the price is too high (compared with others they have seen at a better price) they will
reject yours and buy another.

Costly Mistake 5 – Trying to sell it yourself

No one wants to pay a commission. The money is better in your bank account than the agents. Very True. Then why do over 90% of people sell through agents? It’s not just because it takes time, money and effort, but because it often saves money – Yes, saves money despite the commission.

Most average Kiwi’s don’t want the embarrassment of “negotiating” with an owner, so unless they are keen to pay the asking price (Yeah Right!), they don’t negotiate – in other words, don’t make an offer at all. So it’s the non-average Kiwi, the salesman, the wheeler-dealers who negotiate with private sellers.

These are the very people who have no intention of paying asking price and are not in the least bit embarrassed by making really low offers – deducting the real estate commission they know you are not paying of course – and a lot more. No it’s the average Kiwi who only buys a house every 7 – 10 years who will pay the best price and they would rather deal through an agent.

Costly Mistake 6 – Not having a suitable LIM report or a Pre-Purchase Home Inspection

Buyers today are a lot more careful than 10 years ago. It’s not unusual today for a buyer to want a LIM report (Land Information Memorandum) and a builder’s inspection report. With local authorities getting tougher on un-permitted building work and the leaky building horror stories, it’s not surprising is it?

Imagine you have sold your house but the contract has a condition in it, wanting a home inspection report. You have negotiated (through an agent) a good price. There may be small issues so the buyer may still want to buy the property, but may want to re-negotiate a lower price and the seller is then in a very weak negotiating position.

A pre-purchase building inspection from A Buyer’s Choice Home Inspections will highlight any items that need attention. Better you as the seller know about these before a buyer gets a home inspection and either cancels the sale or wants a reduced price (often more than it would take to fix the problem).

For unpermitted work A Buyer’s Choice may be able to help too by conducting a third party report (like a safe and sanitary report). Getting your “house in order” at the start will save you money in the long run.

Costly Mistake 7 – Turning down good early offers

The best opportunity to get the highest price is when the property in new to the market. The big pool of buyers are out there, and the buyers are searching for a possibly suitable property that they have not seen.

An early offer which is a good offer (close to asking price, but perhaps not full asking price) is often turned down by a vendor on the basis “we have only just put it up for sale, so let’s wait a little longer because if we get a good offer like this almost immediately we should be able to get more still by waiting for others to see it”.

The problem is, the early offer is often from the keenest buyer and if their offer is turned down, they become even keener on the next suitable property they find – and buy it. There are numerous stories of people who turned down a very good offer never being able to get that much again!!!