How should property be marketed and sold?

[ianvestor]

The more disclosure, the more the buyer knows about the property, the more chnace they will buy it.

Why is it a grey area? I'ts just marketing 101. "the more you tell, the more you sell"

Isn't that only true of positives?

REA: "Yeah it's a great property. And I tell you something else, it's right next to the train line! Oh, and did you know the neighbours' dogs bark 24/7? I feel I should also tell you that there is a giant storm-water pipe running below so you can forget about building anything substantial on it. Wanna buy it?"

 

[Rockstar]

All he is saying the more info you provide the more chance you have of selling a property.

The more disclosure, the more the buyer knows about the property, the more chnace they will buy it.

So what specific items would you disclose if you were currently selling one of your properties Evan? Would it reflect the reality? Or would you gloss up the positives and hide the negatives like most do?

 

[Jon Chown]

You've misinterpreted my post on this item Jon.
I know that agents can only work for one person - the Seller, but there main area of focus as far as their workload goes to get a sale needs to be with the buyer.

Sorry Marc, I believe I did

It's far easier to talk a price down with a seller whose house has been sitting on the market for 3 months with no bites than it is to talk up a buyer who knows the house has been sitting there for that time.

No Marc, experience dictates that in many cases by 90 days the Seller is already blaming the Agent for not being able to sell their $200K home for $300K (and is looking for the next Agent to have a go.) They can’t believe that Buyers are telling them that it is only worth $200K and besides that are just Investors trying to nick their place anyway,

Spiderman says

An example is agents who try to impose auctions on cheap outer suburbs, even though attendances are poor, the weather is terrible and it's strictly private sale territory. In this case an ordinary house I considered was worth $165-170k (nothing else advertised for under $175k) sold at auction in the low $150s to the sole bidder. Great for an investor but maybe not so good for the poorly advised vendor (and that was 2007 in suburban Melbourne as well).

Firstly, do you not consider that you missed out on a bargain from not attending an Auction on a property that you admit you were prepared to pay $15 to $20K more than the sale price – You just lost at least $15K or 9% on this investment. Is that smart or just stubborn?

On the other hand, I agree that auctioning cheap properties in outer Suburbs where the Buyer is less likely to be able to buy under Auction conditions is fraught with danger and besides given that this price range is where almost 60% of Buyers are there is every chance that a good Agent can run an auction without an auctioneer by creating competitive bidding. We have a special form for this very event – A give us your one and only best offer.

Joh with all this info,you would now be now able to write your own book how to Sell-Buy Real Estate in a flat market-and still make money..
willair..

I have given it a lot of thought and if I were better at expression and writing I might have given it a go even though it would probably be a lesson in futility.

"I don't know" doesn't cut it.

So what information should be known or not known. Where do you draw the line? Like others have mentioned do you provide professional valuations, depreciation schedules, original construction plans, soil tests, your motivation for selling?

Put it all in a simple brochure that can be faxed, emailed, handed to a prospective buyer.

How simple should this be Marc? What do you and others here think should be reasonably disclosed? And who is responsible to provide that information? The Agent? The Vendor? Or should the buyer be responsible as it stands at the moment. This is a very grey area which, as it presently stands, results in all parties needing to know the rules of engagement.

Excellent points Rockstar. I can see the Lawyers rubbing their hands together reading this. They would have a field day.

This is one of the issues that the Qld. Government got right when selling property on Community Title. It is the Sellers responsibility to provide a full disclosure statement to a prospective Buyer before they enter into negotiation on price. The Buyer has recourse even after settlement if they later find the disclosure to be false or misleading. Perhaps something like this could be legislated and it could include the Building and Pest Inspection. Wouldn’t that open a can of worms with all of the illegal renovations that are around.

 

[evand]

No, because the negatives are usually reflected in the price. Your point only applies if the negatives are not disclosed to the prospective buyer.

Every property on the market will sell at the right price. And that includes the known negatives.

Isn't that only true of positives?

REA: "Yeah it's a great property. And I tell you something else, it's right next to the train line! Oh, and did you know the neighbours' dogs bark 24/7? I feel I should also tell you that there is a giant storm-water pipe running below so you can forget about building anything substantial on it. Wanna buy it?"

 

[TheAnalyst]

Every property on the market will sell at the right price. And that includes the known negatives.

Not necessarily right -- when the supply is more than demand like current market.

 

[boods99]

Not necessarily right -- when the supply is more than demand like current market.

TA, I believe evand is still correct in his statement...

When supply is higher than demand, the equalibrium price will decrease...If the asking price is set lower to reflect this, then it will sell.

Boods

 

[BayView]

So what specific items would you disclose if you were currently selling one of your properties Evan? Would it reflect the reality? Or would you gloss up the positives and hide the negatives like most do?

I'm not talking about the rotting boards under the carpet in the study, or the holes in the guttering etc. The Vendor isn't going to tell the agent about that stuff anyway, and I don't expect the agent to volunteer the bad news either. If it was something really horrific, and public knowledge - like a murder in the house, then the agent would be foolish to not provide that info.

Those sorts of things will (hopefully) be revealed by a pest and building inspection. No-one expects the Vendor to reveal the faults, and every salesman in every industry is always going to spruik up the positives and omit the negatives. Standard practice and I'm aware of it so never bother to ask. I'll find them out myself and offer accordingly.

I'm talking about the pertinent factors that both owner/occupiers and investors want to know about.

Owner occupiers want to know things like where all the schools are, the shops, the parks, the cinemas, the neighborhood, the time it takes to get to the freeway, what size are the bedrooms and living areas and so on. The things that make their decision about their HOME.

With investors, we want to know all the nuts and bolts about the property - the rates, the block size etc as I mentioned before which are important for the INVESTMENT.

A really professionally informed agent will have all those answers ready for both types of buyers, or at least; as many of them that they can think of.

An agent who can meet with a prospective buyer and fill in all the blanks is going to exude a ton more confidence and perceived interest in the property than an agent who is asked; "how many squares is the house and when was it built?" and has to respond with "I'm not sure, but I'll check and get back to you."

This has happened to me more than once, and it always comes across as the agent has little interest in the property, and/or is too busy to get his/her $h!t together for me in a timely manner, or is incompetent.

 

[Peter Parker]

Firstly, do you not consider that you missed out on a bargain from not attending an Auction on a property that you admit you were prepared to pay $15 to $20K more than the sale price – You just lost at least $15K or 9% on this investment. Is that smart or just stubborn?

I suppose that was smart given that I bought it despite my dislike of auctions. My guess is that others would have paid more if it was properly marketed (ie not an auction) but being obsessed with value I wouldn't have

 

[evand]

The ONLY thing that will stop ANY property selling in ANY market is the price.

Not necessarily right -- when the supply is more than demand like current market.

 

[Rockstar]

I'm talking about the pertinent factors that both owner/occupiers and investors want to know about.

Owner occupiers want to know things like where all the schools are, the shops, the parks, the cinemas, the neighborhood, the time it takes to get to the freeway, what size are the bedrooms and living areas and so on. The things that make their decision about their HOME.

With investors, we want to know all the nuts and bolts about the property - the rates, the block size etc as I mentioned before which are important for the INVESTMENT.

A really professionally informed agent will have all those answers ready for both types of buyers, or at least; as many of them that they can think of.

An agent who can meet with a prospective buyer and fill in all the blanks is going to exude a ton more confidence and perceived interest in the property than an agent who is asked; "how many squares is the house and when was it built?" and has to respond with "I'm not sure, but I'll check and get back to you."

This has happened to me more than once, and it always comes across as the agent has little interest in the property, and/or is too busy to get his/her $h!t together for me in a timely manner, or is incompetent.

Thanks Marc,

Good points.

The thing is are we going to believe this information if it is provided? I'm not. I would still go out and check everything. Unless the Agent/Vendor is legally obliged to provide the facts it will always be the purchasers responsibility. I have come to realise that blaming the Agents is a sign of my weakness and my lack of knowledge. I have to be responsible for my own decisions when choosing a property. I have to learn the rules of the game and focus on playing the game.

Regards, Ian

 

[Jon Chown]

Rockstar says,
I have come to realise that blaming the Agents is a sign of my weakness and my lack of knowledge. I have to be responsible for my own decisions when choosing a property. I have to learn the rules of the game and focus on playing the game.

This is, without doubt, the most sensible statement that I have read on this Forum. Kudos to you Rockstar.

 

[RumpledElf]

I suppose that was smart given that I bought it despite my dislike of auctions. My guess is that others would have paid more if it was properly marketed (ie not an auction) but being obsessed with value I wouldn't have

Talking about yourself in the third person before? You know that's a sign of madness?

 

[oneuppmanship]

This is, without doubt, the most sensible statement that I have read on this Forum. Kudos to you Rockstar.

Jon, now Pleeese!!!!!!!!

 

[Dazz]

I have come to realise that blaming the Agents is a sign of my weakness and my lack of knowledge. I have to be responsible for my own decisions when choosing a property.

This will probably be quoted and commented on quite a bit Ian.

I agree with you wholeheartedly, and of course every swinging REA in the country will be falling over themselves to also agree with you, as it relieves all responsibility from their shoulders - of course they are going to agree with that statement.

The good thing is, when you read the fine legal print on all of the disclaimer nonsense, it is quite clear indeed that you are responsible anyway for everything, and they are responsible for nothing.

It says as much on every brochure, it says it on the agreement they make the Vendor sign, and it's plastered on every other publication they pump out. In fact, the principal of the business strictly forbids the REA from making any binding statements on behalf of the business or the Vendor whatsoever. Whatever they say or write means absolutely not a jot - they warrant nothing.

Try it out in a court of law if you are under the impression that anything the REA says or writes to you means anything. It doesn't. You're on your own Jack. That's why I laugh when people come on this forum and say things like "I'm so mad, the REA told me this and told me that, it's even in their official pamphlet and on their website, yet I found out what they are saying isn't true." Derr....their words, pamphlets and website mean nothing at all. She's all care - no responsibility.

So of course, with bugger all responsibility in the process, commensurately they have zip all power in the transaction as well, and why I treat them with such contempt. Their signature is nowhere on the contract. They stand idly by, completely removed from the paperwork, other than to collect their commish.

When a competent Buyer meets a competent Vendor, it's a joy to both tell the REA to sit down and relax....they are simply not needed. It also makes the transaction go a hell of alot smoother and removes alot of the shenanigans that goes on with the industry.

 

[kph]

When a competent Buyer meets a competent Vendor, it's a joy to both tell the REA to sit down and relax....they are simply not needed. It also makes the transaction go a hell of alot smoother and removes alot of the shenanigans that goes on with the industry.

Therein lies the problem.
It assumes that most buyers/sellers are competent.

The agent is still required for the rest of us incompetents.

kp

 

[Jon Chown]

Therein lies the problem.
It assumes that most buyers/sellers are competent.

The agent is still required for the rest of us incompetents.

He! he! he! good one KP. Another Kudos given

 

[Max Carnage]

"How should property be marketed and sold?"

With a great deal of desperation at the moment, it would seem. Turnover is down by ~23% in Melbourne Year over Year and similar in NSW.

I think the best thing to do if you're keen to sell is get it done!

Clear enough? Loans through the floor and all that!?!

 

[Shadow]

Turnover is down by ~23% in Melbourne Year over Year and similar in NSW.

And yet prices stubbornly refuse to crash! Looks like people are not so desperate to sell after all. What happened to that massive glut of specufestor held empties that was supposed to flood the market as interest rates went through the roof. Not much chance of that happening now that rates are on the way down...

 

[yo yo ma]

Interesting topic Jon, Kudos.

Generally, I would go with number 3 like most here. I will give you an example of why I didn't like number 5 which happened 18 months ago.

Me: How much?
REA: Make an offer
Me: $605k
REA: Declined
Me: $622K
REA: Declined
Me: I won't offer any more unless they come back with a counter-offer
REA: They won't make an offer
Me: We won't either
REA: The place has been taken off the market

I was prepared to go to $645K and realistically valued the place between $640-650k. I just wanted some idea of how the negotiations were going... Anyway, we went on to renovate our PPoR instead and the place hasn't come back on the market.

Allmine, glad you got some positive response on the other thread. Remember, there are good and bad people in all professions.

 

[Kevin Hockey]

Great post everyone, thanks Jon.

Can't agree with Listing property without a price. I hate it and many buyers hate it.

I do however use offers over, especially in this market.

Just sold this one... http://www.realestate.com.au/cgi-bi...er=&cc=&c=7054631&s=qld&snf=rbs&tm=1221302004

Originally listed at $349,000 but couldn't get an offer from anyone, not even a low one. It represented excellent value at that price and was 330 - 340k every day of the week. Buyers attened opens but no movement.

I encouraged the owners to change the marketed price to offers over $329,00 and had immediate serious interest. 1 offer, 1 offer drawn up but didn't proceed and another serious buyer who had to sell first. All within 3 days. The owner was willing to accept 329k from first buyer but he didn't proceed. Just now gone under contract at 342k but not to any of those buyers.

Offers over works very well when done correctly. The buyers have a ball park figure to work from, the owner isn't limited in a max price and market determines value.

BTW - my name is no longer on the ad as I have a new manager in place and I'm back at corporate now doing my role.

If RP Data doesn't provide us necessary info they'll have to rewrite the Act again considering it requires us to provide 3 properties sold within last 6months within 5 km as evidence.

The pricing process of every property however is relevant to many factors. The property itself and it's appeal in the market, owners motivation, marketing package chosen, market conditions and location to name a few. Owners expectations will ultimately dictate the listed price and method used. I'd love to see every property valued by an independent unbiased professional valuer prior to being listed and an owner must list within say 10% of the valued price. That would stop a lot of time wasted by everybody.

Kev
www.gogecko.com.au