|Pushy Vendors Lose Purchasers
19th Jun 2006
Many vendors are reluctant to hand over the marketing of their home to anyone. They feel as anxious as parents teaching their teenagers to drive. Will the agents remember to engage the clutch when they unlock the front door? Will they leave a window open or shut the cat inside? Vendors since time immemorial have anxiously checked and cross-checked every detail of the marketing with their agent. And it is always good to check – especially if this provides the reassurance they need.
But there is a time for vendors to stand back.
Vendors who stick close to prospective purchasers inspecting their home do so with the best of intentions, thinking their knowledge and input are essential. After all, no one knows the home like they do. But their subjective, detailed commentary often has the opposite effect to what it was intended to have.
In most cases, direct contact between vendor and purchaser results in lost opportunities, especially when purchasers are put off the property by too much information too soon.
It is not uncommon for vendors to anticipate and answer objections before they are voiced and in so doing highlight negatives purchasers have not even thought of.
For example, vendors conscious of the fact that their home is near a school might say: “We hardly ever hear the children. They’re only outside for half an hour before school, during recess and an hour at lunchtime. It’s nothing.” The purchasers, in reality, might not have paid much attention to the school’s proximity, especially since it is not recess or lunchtime at that moment and because they are still at the stage of picking up a more general impression of the house itself. Their attention is drawn from the general to the specific before their emotional connection with the property is fully established. They are asked to concentrate on features - negative ones at that - at a time when they are still in the initial stages of embracing or rejecting the “feel” of the property. Even if they noticed the school in passing, they may not have thought about the specifics of how that might affect them. And in spite of the school, the house might still be the right home for them, just as it was for the current owner, but if they don’t “connect” with the home and imagine themselves living there before facing the practicalities, they are unlikely to move on to the next stage. Any excitement the house might be generating is lost in the prosaic detail of day-to-day living.
Vendors who hover during inspections can also make buyers uncomfortable. It is harder for them to ask the agent for the very details they do want to know. They are less able to make themselves at home and their attention is sometimes on small talk rather than on the property. And it is much harder to imagine themselves as proud owners while the real owner is busy being proprietorial.
Of course it is important for home sellers to be connected with the selling process and even more important that they can see that their agent is doing the right thing on their behalf. The best way to stay involved is to choose an agent they can trust to show their house to the best advantage - and one they know will communicate with them every step of the way. Professional agents report that vendors who are kept up-to-date with the details of inspections, experience less stress and better sales outcomes.
|Is it time to trade up?
2nd Jun 2006
When the media report a slowing in the property boom, many people think it?s no longer a good time to sell. Some postpone plans to move to a better suburb or to a home with more space for their growing family. They reason that selling in a buyers? market is a mug?s game.
What they forget is that when they are trading up, they will be buying a more expensive home than the one they are selling. It?s not hard to work out that in the roundabouts and swings department, anyone buying a more expensive property than the one they have just sold stands to gain financially from the double transaction.
Let\'s keep the figures simple. If you get $380,000 for your old home when you were expecting $400,000 you could be forgiven for thinking of this as a 5% loss. But is it? After all, you will gain 5% when you purchase your next property in the same or even better market conditions. And 5% of a more expensive property (say $500,000) is $25,000 - a net gain of $5,000 from the double transaction.
In a sellers? market, the reverse occurs. In fact, in a sellers? market, many people feel rushed into making hasty purchasing decisions because once they have sold their original home, they watch the gap between the price they got for their original property and the price they have to pay for their next one increasing at an alarming rate. In a buyers? market, once vendors have sold their original property, there is no rush to beat rising prices by making an often-too-quick decision on their next purchase. They are no longer competing with too many other buyers for too few properties. Prices are stable and there is time to research the market properly and make a well-considered choice.
|How to avoid rental vacancy
1st Jun 2006
When buying an investment apartment, location is important but so are your property?s aspect, views and features. An ordinary apartment is harder to lease than a distinctive one that offers some charm. A quality property in a quality location will also deliver capital growth in the medium term.
But with the REIA reporting that the rental vacancy rate for the March 2003 quarter was 3.9%, down from 4.5% for the December 2002 quarter, what can you do if your investment property falls vacant for a month?
Use the vacancy as a chance to catch up on maintenance and minor improvements. Painting the walls and updating the bathroom mirror and professionally cleaning the carpet, windows and stove may make your property more attractive to renters. Accepting a lower rent for a longer lease is another option. Ideally, arrange to have a lease expire in November or mid-January rather than early December, when it?s often more difficult to find tenants. When renters have many premises to choose from, make sure yours presents well, is priced fairly and is well marketed.
|Tips for house hunters
25th May 2006
You can streamline your house-hunting. Here?s how:
* Work out how much you can afford to borrow before you start looking at properties.
* Take into account what your monthly or fortnightly mortgage repayments, ongoing property maintenance and rates will be and to these add your other living expenses.
* Get pre-approval from your bank or mortgage provider before you start your search. Then you?ll be able to make a genuine offer when you find a property.
* Make a short-list of the essential features you want in a property. Include location, number of bedrooms, bathrooms, parking, outdoor living space and stick to your requirements, that way you won\'t be swayed to buy something that doesn\'t exactly suit your needs.
* Use websites such as natgroup.net to help you narrow down your search. You can search under multiple criteria?s including your price range, number of rooms and location.
* When you?re out inspecting a property, take notes or even a photo of each property to help you remember what you thought of it.
* Take your time in considering each property you inspect. But remember that the first one you see could be the most suitable.
* Too many people keep looking, miss out on the first one and then end up comparing all properties they see to the first one they missed out on.
* If you?re serious about a property, expect to pay approx. $300 for a professional building report and approx. $160 for a pest inspection report.
* Clarify rates and other maintenance expenses on the property with the agent.
* Consider the property?s potential, especially its location, layout and size.
* When you find a property that suits your needs, make an offer which is fair and in line with recent sales in the area.
|Whats wrong with managing your own rental property?
16th May 2006
Sometimes new investors make the decision to manage their own investment property. After all, its seems obvious - why pay an agent to do something so simple as banking a rent cheque?
Once they start doing it on a day-to-day basis, however, most investors realise they don?t have level of expertise required to maximise income and minimise expenses. They realise that they cannot do the work cost-effectively, and that tenancy legislation is best left to the experts. Most novices need to spend a disproportionate amount of time making sure they get it right. Even then they worry that they haven?t thought of everything. Most find it an enormous relief to hand over to an expert who has the up-to-date legal knowledge to prevent problems developing. Most investors report an increase in their net income as well as in their leisure time.
Happily, most people hand over to an agent before things go wrong. They realise that staying up-to-date with week-to-week fluctuations in the rental market is difficult for those not in the business. It takes a lot longer for trends to become apparent to people who are looking after just one or two properties. Do-it-yourself investors do all the work themselves and it may still cost them money in higher vacancies. It?s also very hard to keep a distance from demanding tenants when there is no third party to liaise.
Communication and arbitration is also an area where the objectivity of a third party is essential. Dialogue via a disinterested third party minimises income reducing anger and personality conflicts. Even negotiating rent is difficult for a landlord, firstly because of the emotional involvement and secondly because of lack of experience.
What is a reasonable rent to set? What are fair and reasonable repairs? How can I make sure the lease covers every contingency?
The answer? Do your homework, find out who are the most professional managing agents in your area and ask them to manage your precious investments.