May 2009

Selling a house without an agent: your options (part 1)

by Chris on May 25, 2009

A couple of posts ago we’ve discussed the value of real estate agents in the process of selling your home and the reasons to use them. However, in certain circumstances, estate agents are a luxury some of us simply can’t afford. If the sale wasn’t planned, if it’s due to a separation, divorce, financial difficulties, paying an agent can be out of question.

Consider selling a house for a modest price of 300K. I am taking the lower end of the market on purpose, just to show how ridiculously high the agents’ fees are. The basic commission is 2-2.5% of the house price, which means that a “insignificant” amount of $6000 to $7500 is going out of your pocket and into the agents’. Do you think that 5 pictures of your place, a sign board and a month or two of advertising should cost that much?

I must say that in Australia selling one’s house without an agent is almost unheard of, and the courageous people who dare sell on their own get looked at in a weird way. Not to mention the estate agents, who come to their doors and literally laugh in their faces: “What do you think you’re doing, you never going to sell, not without me!”

The big advantage of selling with an agent is they have everything pre-arranged. They have a photographer on call, they have a sign guy who installs the “For sale” board in your front yard on an hour’s notice, they know the right day for booking an ad in the newspaper and they have all the forms for submitting the written offer ready.

To an average person it will take a week to arrange all that and put the house on the market. This shouldn’t discourage you though – I am writing this with just one purpose, to give you a realistic expectation of the timeframe so that you won’t get frustrated with how slowly things are moving.

So here is what you need to do:

1. Get your own “For sale” board
2. Don’t take house shots yourself – but get a professional to do it.
3. Do your own advertising
4. Do your own negotiating

And here is how to do it:

Getting your own “For sale” board and some pretty photos is not a big deal, but finding the right kind of advertising that will reach the highest number of buyers for the lowest price is not trivial. I have written about the power of online advertising and the bottom line is that you need to put your house on two major websites, domain.com and realestate.com.au (read this post for explanation why).

There are several ways to advertise your home and reach the most buyers. In my next post I will be discussing and comparing them (including the costs). Subscribe to Homeiown via email and be the first to get it.

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First Home Owners Boost extended

by Chris on May 21, 2009

In case you haven’t heard already, the Boost to the First Home Owners Grant was extended. After a period of uncertainty when many people (including me) were positive that the boosted FHOG will be cut off, it was finally announced that the boost to FHOG will be extended for 3 more months at full rate and then for another 3 months at half rate.

That was the short version, if you know all about the First Home Owner Grant, the First Home Bonus and the First Home Owner Boost – you can head to other blogs. If you’re not sure and may be even a tiny little bit confused between the three forms of “free money” our government is handing out, keep on reading.

The First Home Owner Grant

The First Home Owner Grant (FHOG) is 7000$, never mind what the property price is (if you buy in 2009). If you buy in 2010, the property must cost under 600K for you to qualify for FHOG. Find out whether you’re eligible or not here.

The First Home Owners Bonus

If you buy before the 30 June 2009, the Bonus is 3000 for established and 5000 for new homes, but the property must cost below 500K.

From 1 July 2009 on the Bonus is 2000 for the established and 11000 for new homes, and the property must cost below 600K. More about the Bonus here.

The First Home Owners Boost

This is the recent “injection” of free money which was made available October last year.
If you buy before 30 September 2009 an established home, your bonus is 7000, for new homes it’s 14000.
Then from 1 October the bonus will be reduced to 3500 for established and 7000 for new houses. Here is the fine print about the Boost.

And the last important bit: it’s the contract date that counts – not the settlement date.

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7 things you can do to help the agent sell your house, part 2

by Chris on May 14, 2009

Selling your house is a labor intensive process and as such needs to be shortened as much as possible. In my previous post I wrote about 3 things you can do to help your real estate agent sell your house faster and here are 4 more things that can help speed up the selling.

4. Clean spotless.

Funny as it sounds, you can have a great house, expensive furniture, a lovely garden and nobody will remember any of that – if it was messy, people will remember the mess. If your home looks tidy, cared for, loved – that picture will stick in the minds of your buyers. It needs to be shiny, sparkling, and spotless.

5. Don’t be at home when people are coming to inspection.

Think back when you were looking to buy a house and remember that inspection when you came and the vendors were home. Remember how awkward it felt to be going through someone’s house while they are there? Inspection is the only time people can get a feeling of “what it would be like to live in this house” – which is a bit hard to achieve when they are not alone. They won’t feel free to look around, to open doors and look into the rooms, they will have this one urge to get a quick look and run away – the opposite of what you want.

6. Don’t limit inspections to weekends.

If you can – and think about how you can before you say “I can’t” – offer inspections on working days, not just weekends. It will maximize your chances of finding the right buyer because a lot of investors have the freedom of inspecting during the week. Or on contrary some buyers are working weekends and can’t make it to your inspection in Saturday. Speak to your agent and let him or her know what days other than Saturday / Sunday you are available to let people come to inspection.

7. Offer your building and pest reports.

If you have a clean and recent pest inspection or building inspection report – let the agent know, so that he could offer them to prospective buyers. It will save those people over $600 and will make them more inclined to buy your place rather than another one they don’t know anything about. It will also make you look good and create a certain degree of trust between you, which can make the sale easier.

Do you have anything to add to this list? What worked for you when you sold the house? What did the tricks? Leave a comment on this post, let us all learn from your experience.

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7 things you can do to help the agent sell your house, part 1

by Chris on May 11, 2009

Doesn’t it sound ridiculous that you need to help a person you’ve hired for the big bucks to do their job? I know you shouldn’t have to, and in an ideal world you wouldn’t have to.

However, the reality is that there are different agents, some are better, some are worse and it’s difficult to predict what kind of job will your agent do selling your house before you’ve seen them do it. Which is why you need to make sure you’re doing everything you can to speed up the process.

I would even say that in selling a house there are two parts of the deal. Agent’s part is to advertise and promote your house to prospective clients, to negotiate with the interested buyers and create a competition on your house to get you the best possible price. Your part is to get people to like your house, to expose it to the maximal number of potential buyers and to let them make an offer as soon as they are ready.

And here is how you can achieve that:

1. Have Section 32 ready before you put the house on the market.

The reason is that a buyer can’t submit a written offer before they’ve seen your Section 32 (read more about it here). So once a person has inspected your house, liked it, wants to buy it, the only thing that can stop them is the absence of Section 32 (and it really annoys the buyers if they have to wait a week to get it).

2. Write your own ad.

Think about it – who knows your house better than you do? Who can name all the advantages better than you? Who knows better all the handy amenities, all the nice things about your house and your neighborhood? You can write your own ad that will appear on the internet sites (such as domain.com and realestate.com.au), in newspapers, in brochures, leaflets and the like. Or if you feel too insecure to do it – give your agent ideas for the ad, list all the good things and the features of your house, they will only thank you and put them to some good use. Agents are amazingly cooperative in anything that means less work for them

3. Choose your own photos.

Yes, you can do it. The agents are not the only one with good taste in photography. Actually, judging by pictures from realestate.com.au, some agents have a pretty crappy taste in photography or simply don’t care. If you insist and put it in the contract before you sign it, they will let you choose the pictures of your house that you like. Or, more importantly, you will have the right to throw away picture that you don’t like. In an ideal world, paying to a professional photographer would mean getting the perfect pictures, but since we’ve already established that it’s not always the case, you need some control over the way your house is presented in the papers and on the internet.

Hang on, I’ve got 4 more things to tell you. Subscribe and they will be in your email the minute I publish my next post.

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It’s official: you are reading the Best Blog in Real Estate Industry

by Chris on May 6, 2009

Finally, there is an award to back up what I was thinking all along!

Just kidding.

I was hoping we’d win and when Chapeau announced Homeiown the Best Blog of 2009 in Real Estate and Development Industry, for a moment, I couldn’t believe it. And then I felt a lot of things all at once:

Happy, because my work is appreciated
Grateful to YOU for choosing me
Motivated to keep up the good work
Contented. No idea why.

I couldn’t do it on my own – but you, my readers, my subscribers, my fellow bloggers, all of you helped me. You are reading my stuff, you are sharing your thoughts, you are inspiring me to work harder and get better. There is no paycheck other than your appreciation – and to me it’s enough.

So thank y’all and have a beautiful glorious day – I know I will!

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Selling a house without an agent? 3 things to think about

by Chris on May 2, 2009

There can be many reasons why people decide to sell their house privately. When I say “privately”, I don’t mean a private sale, as opposed to an auction – I mean selling without an agent.

It could be an attempt to save money on agent’s fee, especially if you’re selling because you’re downsizing for financial reasons (so every dollar counts), which is not uncommon in this recession. Or it could be lack of belief in the real estate agencies’ system, especially with people who were burnt once, who had an agent betray their trust and not live up to their expectations, or else… Many, many reasons.

If you’re asking yourself – what is it that the agent does I can’t do – well, a number of things:

First, they don’t have to answer all the difficult questions, they can say “I’m not sure” and that will be it. If you’re not keen to reveal the real reason why you’re selling, or have anything else to hide like a flaw in the house, then agents do a good job on “not knowing” things.

Second, they have access to a source of “traffic” (meaning potential buyers) that we, ordinary people, don’t have. They have their own network with a clientele and can streamline people who come asking for a particular house to yours, simply by saying “have you seen the house we just listed on Such And Such Street?”

Third, estate agents are the only ones with access to realestate.com.au, where they don’t accept private listings and your only chance to advertise on this website is via real estate agent. There are only two websites where advertising brings results, domain.com.au and realestate.com.au. Domain.com.au will let you advertise your home for $500 a month and Realestate.com.au will not, which means that your audience shrinks to 50% as compared to the agent’s.

You will find many other websites selling advertising space for real estate ads, but the sad truth is that only the first two in Google get 70% of the attention. If you do a Google search on “buy house”, or “buy home” or similar keyword, you will find that Domain and Realestate websites are always on top of everyone else. I can’t say that the rest don’t matter, but if I were to sell my house, I’d definitely go for the 70% rather than for 30% of the buyers.

What options are there for people who are reluctant to paying $5000 – $6000 for a promise of maximizing their profit? The answer will be in my next post – stay tuned!

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