Selling in Wellington? Focus on the Right Two Things
Sellers, four things will determine your sale price and the good news is that you control two of them. Focusing on the right two things will massively stack the odds in your favour and set up your success from the start.
You can’t control the market, but properties are sold every month and ‘If you’re buying and selling in the same market then you’re largely insulated from whether the market is up or down’.
Trying to pick an exact market peak is hard until after the fact, even for experts, and it can be a long time waiting for the next one to come along, while putting important life changes on hold.
The housing market like any has a ‘demand side’ and a ‘supply side’ (cue memories of Econ 101 graphs) and prices trend up or down over time when demand and supply is mis-matched. Long-term and short-term factors act on the demand or supply, think population growth (incl. net migration), household incomes, cost of living, borrowing costs, construction, credit availability, regulations etc. While some economic factors change fast others change only slowly causing the market to move in cycles over years, typically 7-10 years from one market ‘boom’ to the next.
Rather than playing the waiting game, it’s more about focusing on what you can do NOW to ensure your property is one of the ones that sells, and that your sale is up in the range, rather than down or below the market range.
You can’t change the location or which way your property is facing but you can improve your property hence the saying ‘buy the worst property in the best street’ or ‘look for potential’.
That being said, here’s where the rubber really hits the road and you can make a substantial difference to your own sale result and experience in any market:
Preparation and presentation done well can make a massive difference to your sale price and how long the sale takes. From condition to aesthetic there’s huge scope here to make your property more appealing and worth more in the eyes of buyers and especially in the hands of a skilled agent.
Always start with good advice.
We renovated and sold our 4 rental properties over the last 3 years, taking the advice we give to clients. We recouped the outlays and made a sizeable profit (between $75,000 - $185,000) through presentation on each sale. Each property also sold promptly and in a tougher market.
A client we advised with a 3-bedroom property, which had two large living areas, put up an internal (non-structural) wall for $2,000, taking it from a 3 bedroom to a 4 bedroom home and adding over $50,000 to their sale price.
Presentation changes needn’t cost a lot, and there will be different options, but this is where you should get expert advice and have a preparation plan up-front.
Differences between buyers and what they’ll pay, photography quality, the marketing pitch, marketing savvy, and negotiation skills can add tens of thousands to your sale price and get a quicker sale for any given market.
People look genuinely surprised when you tell them that the process and negotiation with the right parties added $50,000 or $100,000 to offers compared to where all buyers overall saw a property’s value. Under-par or miss this opportunity at your peril, especially in a more competitive market for sellers, like today’s market, as no matter what a property is, there’s always extra value that higher skill and know-how can add to the sale result.
Choosing Real Estate Services is Tricky
Buying real estate services (READ representation) is unlike most other things that we buy day-to-day as consumers. First, you receive a service that you don’t pay for unless there’s a sale. This part sounds good and is.
But second there’s a catch, and this is where it gets tricky, whether one service is financially better than another can’t be known until the end as it depends on the sale outcomes (if sale is achieved) that you won’t know until then and which your representation has a lot to do with, i.e. whether you get sold or not, how quickly it happens, whether you got offers and how many, the quality of the offers that are presented to you, how much higher a negotiated sale is (READ final negotiated sale price), and whether issues were successfully navigated to protect your result.
Real World Example
Earlier this year we were called in to give an appraisal on a property for potential sellers, something we do often. They later signed with another agent a family member knew saying it was cheaper to sell (READ a low real estate fee). We politely asked how they knew it would be cheaper when they didn’t yet know what the sale price would be? To which they paused and conceded that might be right.
The location and house size was good, the bit they couldn’t change. But they didn’t follow a good preparation plan if at all. On promotion, to the experienced eye, the photos, photo selection and marketing pitch were kindly put not great. This has a big effect on attracting enough of the right buyers. Given preparation and promotion was under par it might be reasonable to assume strength of negotiation wasn’t stellar either? The result suggests so.
Putting aside potential to sell up in the upper part of the market range, with everything done right, the sale was $95,000 below our appraisal and $70,000 below the bottom of a conservative appraisal range.
This example is a bit more common than you might think, especially in a market like today’s where you need to exploit all the strategies that you can, and it shows there’s really no saving at all on not doing real estate exceptionally well.
The days of the market doing all the heavy lifting for sellers are well in the rear view mirror though some people haven’t yet recognised this, relying too much on the market or the location of their property rather than on what they can control. As agents, this market reminds us of the post-global financial crisis market, when we started in real estate some 17 years ago. Back then after a drop, as it is now, a largely stable and flat buyers market where sellers needed to employ smart strategies and stronger agents if they wanted successful outcomes, the best results.
For a chat about the market, to get advice or find out where your property sits reach out for a no-obligation chat: it takes just 15 minutes and could save you thousands (leonie.snook@harcourts.co.nz 0275180008).
About Leonie & Steve
Leonie & Steve are a husband and wife team at Harcourts with 500+ Wellington sales over 17+ years, Top 100 Wellington Region since 2009 and a Harcourts Platinum Pin. We handle every part of the sale ourselves, no juniors and no handoffs, across Khandallah, Johnsonville, Karori, Newlands, Ngaio, Churton Park, Wadestown, Paparangi, Wilton, Grenada Village, Crofton Downs, Woodridge, Northland, Broadmeadows and everywhere in between.
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