7 essential questions booklet by BrandGrowth

7 ESSENTIAL QUESTIONS YOU NEED TO ASK NEXT

Welcome to an exciting journey For most people, selling a residential property is typically the largest transaction they will deal with in their lifetime. Because the sale value is so high and you don’t sell a home every week, it is totally understandable that there will be a number of questions to be answered, and possibly some misconceptions that need to be addressed. As agents, our role is to help you fully understand the sales process and complete the sale comfortably and professionally – achieving the best possible price, and sale conditions which meet or exceed your expectations.

To assist with this process, we’ve analysed many hundreds of property sales in all price ranges, identified the 7 key questions that we are most commonly asked, and provided answers designed to help you make the best possible decisions. This is not an exhaustive list of everything you need to know, but by knowing the answers to these seven questions, you will have a head start on 98% of the market - they are very valuable insights. Knowing this will help you make informed decisions and save yourself time and money. So lets get started…

How much is my property worth?

Great question! It’s also the foundation to everything else. Unless you can get what you want / need for your property in the current market, then why waste time trying to sell?

Typically, when people decide to sell their property, most would-be sellers start with the price. They might call up a few agents to obtain a “free market appraisal”. After an inspection of the property and a discussion, the agents each come back with a price range in which they believe the property will sell. For lower priced properties, you should expect a range of around 5% – e.g. $370,000 to $390,000 (5.3%). It is common to have a higher range of around 10% in more expensive properties - eg $1.8 million to $1.95 million (8.5%). If price ranges vary much more than this, it can be a good indicator that the agent doesn’t have a full understanding of their local market. Let’s look at an example. In evaluating the sale price of your property, you may obtain three appraisals, which range as follows: $750,000 to $770,000 (mid point $760,000) $780,000 to $830,000 (mid point $805,000) $820,000 to $860,000 (mid point $840,000) It’s normal to get some variation between their appraisals, but how do you know which one is correct?

Don’t be automatically seduced by the highest price. As an owner, the natural reaction is often to agree with the agent who gave you the highest price and engage them to sell your property. As it’s your property (and your $$ they are talking about), most owners will find it hard to remain unemotional about the decision and look at things objectively. It’s very easy to think that the agent who gave the highest price obviously loves your home more than the others, so they will be automatically be able to sell it for a higher price. Seems to make sense… but this is wrong and can be a dangerous assumption. Remember: You have not received a valuer’s valuation. You have a real estate agent’s appraisal.

An appraisal is simply an informed opinion.

Is there a process for finding out the real value?

It may be based on a number of factors, including recent sales in the area, property features and condition, competition and availability. Your appraisal will be influenced by the agent’s personal preferences, experiences, likes and dislikes. It can also be flavoured with a healthy dose of self-interest.

Absolutely! You should expect most professional agents to have a reliable process by which to assess the market and help the owners to determine if their selling price range is acceptable to genuine buyers.

There are a number of reasons why appraisal values differ: • Agents do see different things and have different opinions • Inexperience or lack of local knowledge on the part of one or more agents • Well intentioned (and sometimes misguided) optimism – “I need to get the seller’s approval at any cost.” • The agent could be ‘buying the listing’ (this is when the agent thinks: “It’s only worth $750,000 but if I don’t tell them it’s worth at least $800,000, then I probably won’t get the business.” At the end of the day, there’s only one thing which will decide the price – and that’s the buying public -NOT the agent. Don’t automatically ‘buy’ the highest appraisal price. Use price appraisals as one indicator to help you choose the right agent.

Ask the Agents “How did you arrive at your proposed selling range?” A good agent will be able to walk you step-by-step through their thought process as to why they have arrived at the suggested price range to achieve a sale within your desired timeframe. It should be based on evidence (including past sales in the area, current market trends and comparative properties on the market). Be aware of too much emotive based logic – there should be sound logical reasoning for their assessment. If you don’t agree with their logic, then you should discuss it with them. Remember, it’s your property, and the agent is being paid by you to represent your best interests. At the end of the day, the only true identification of price comes from a genuine buyer who is prepared to give you their money in exchange for your property. The ‘appraisal’ price should not be the primary reason you choose an agent. There are many other reasons which you should evaluate before making a decision about who you should trust with such a significant responsibility. In our earlier example, it appears you could sell your property for somewhere between $760,000 –$840,000. So very quickly, the problem for theowner appears to be “How do I find out the realselling price?” In reality, price at this early stage is only part of the question and your criteria for selecting an agent should be far more reaching.

ANSWER: A good agent will have an accurate process to help you determine the pricing. Pick the right agent first, then work out the price together.

How do I find the right agent?

To accurately answer the pricing question, you need to decide which agent you will work best with to achieve a sale of your home.

Hollow price estimates will quickly become irrelevant if you can’t build trust and connection with your agent, and/or if they don’t understand their responsibility as your representative. When considering who to engage, here are some of the questions you should ask yourself before making a decision:

LOCAL KNOWLEDGE • How knowledgeable is this agent about the area, recent sales and current market conditions?

PERSONALITY • How do you feel during discussions with the agent? • How do you get on with them personally? (If you feel uncomfortable with them, then how will potential buyers feel?)

POINT OF DIFFERENCE • What makes this agent special? • What sets them apart from other agents?

• Do they have a detailed knowledge about other properties on the market in this area?

TRUST AND INTEGRITY

• Was the location of your property a major factor in arriving at the appraisal price?

• Did they put their competitors down?

REPUTATION

• Would you be happy to buy from this person?

• Do they have a proven track record and runs on the board? • Did they sell the last property within their appraisal price range? • Can they provide testimonials from previous clients?

PRESENTATION • How do they present other properties to the market? • How is their personal presentation? • Can they present your property well? • Do they add value to the process? (Visit an open home and assess them personally.)

• Did you feel like they were telling the truth?

• Did you personally identify with their values?

TECHNOLOGY • How well do they use internet and email to market properties? • Are they up to date with the latest technology and how to use it? • Is internet marketing a central part of their marketing program?

RESPONSIVENESS • How effectively do they respond to prospective buyer enquiries from different sources? (e.g. advertising, phone calls, signage, Internet, open for inspections) • How well do they respond to your enquiries?

NEGOTIATION • What are their skills like as negotiators? • How do they negotiate with you? • How would they perform with buyers? • Can you talk to a past client?

FINANCIAL ACCOUNTABILITY • Have you been presented with a written, itemised marketing program? • Are all the associated costs, commission and advertising, fully explained, transparent and necessary?

Read this list and you quickly realise there is so much to consider before you start seriously considering a pricing strategy. Selling a property is a business decision and can be quite stressful. If you choose the right agent, it can also be a pleasurable experience. Unless your agent sells your property, they haven’t done their job. If you find yourself…

ANSWER: Take the time to find an agent with the ability and experience to sell your property, and one that ‘fits’ you and your property. Effective, honest communication is critical to helping you get the best possible result. Once you have selected the right agent, then you can revisit Question 1 to work out a pricing strategy to get your home sold.

• Holding back on information you are telling your agent… • Writing the sales materials and organising the marketing campaign... • Trying to sell the agent on the property… • Uncomfortable discussing the sales process… • Feeling like the agent doesn’t really ‘get the value’ of this property, or • Constantly chasing feedback or input …then you are dealing with the wrong agent.

Should I Open List my home or engage an Exclusive Agency?

“I don’t want to list with one agent exclusively. I’m going to OPEN LIST my property, so I have several agents working to sell my home.”

The logic behind this line of thinking is: “If I have all the agents chasing to sell my property, it will create competition between agents, so I will create more activity and sell my property faster”. Unfortunately, all too often, this is a long way from the truth. While it sounds logical, this is often the worst mistake an owner can make.

When you are choosing someone to help you sell your home, the number one thing you are looking for is commitment. You want an agent who believes in your property… someone who will invest their time in developing a complete marketing and sales campaign… someone who will energetically follow-up buyer enquiry and negotiate hard in your favour… and someone who will stick by you until a successful sale has been achieved. This is essentially the exact opposite of what you can expect with an open listing. That’s why less than 10% of Australian homes are sold by open listing. Open listings typically attract agents who lack the skills and commitment to convince an owner that they are the best person to represent a property in the marketplace. Open listings do not typically attract more buyer activity. Instead, what really happens is that the same buyer/s get spread between several agents. Because the agent has no control over the property, or what any other agent is saying about it, they resort to taking the easy path – and all too often, that means going soft on the price.

“Buy through me and I’ll get you a good deal.” While industry ethics and formal regulations are in place to try and ensure the agent represents the seller rather than the buyer, greed and laziness often get in the way in open listings, and agents forget who they are really working for. The only way to stop this happening is to select an agent you feel comfortable with to exclusively represent your property. An exclusive agency arrangement protects your property and maximises the price potential. With an Exclusive Agency or Sole Agency you have one person acting as the gatekeeper, and controlling what information goes into the market, when, and to whom. You have one agent more effectively able to manage the sales process and actively working to get you the highest price. By comparison, with an open agency you have multiple agents working in the buyer’s interests, hoping to get their buyer the sale at the lowest price. The results speak for themselves. Open listings account for less than 10% of all property sales, while Exclusive Listings and Auctions account for almost all the rest.

ANSWER: If you want to achieve a sale at the best possible price and conditions, an Exclusive Listing is the stand out option.

Can I negotiate on commissions?

Hot tip: If an agent negotiates on their commissions before you’ve even started marketing, then get someone else to do the job.

It’s simple really. An agent only gets paid when they achieve a sale, and their success as a professional salesperson is determined primarily by their ability to negotiate.

Property sales is a specialised area, and good agents carry sales and negotiating skills developed over years of real world experience. Those skills can be put to work to help you sell your home.

Agents...

A good agent can easily help you achieve a price and sale conditions that easily outweigh your investment in their services.

• negotiate daily for the right to represent properties exclusively. • negotiate with challenging and pushy buyers. • negotiate to achieve the highest sale price for property owners. • negotiate contract terms and conditions. • negotiate with tenants over access.

For agents, negotiation is a way of life. If they start your relationship by negotiating on commissions, and you win, then what chance have they got negotiating you the best sale price for your home?!?! By all means try to negotiate on commissions - it’s a great way of testing your agent. But an experienced agent is most likely to stand firm on their commissions, and this is a great indication of their experience and skill as a property sales professional.

In the same way you wouldn’t want a cut price surgeon to operate on your sick child, does it make sense to entrust the sale of one of your most valuable assets to a discount agent? By engaging a skilled property sales professional, you can expect to achieve a good price in a realistic timeframe, so you can move on to the next phase of your life. Doesn’t it make sense to have a good agent properly incentivised to represent you? You only pay when they perform!

ANSWER: You want the best negotiator on your team.

Should I invest in marketing my property?

A decision to sell your property is ultimately a business decision. When you are in business, it is widely acknowledged that the most important regular activity is marketing.

From time to time, we still hear owners ask: “Why should I advertise? It’s only promoting the agent’s business.” This is a dangerous misconception and could cost you a lot of money. You’re promoting your property, and maximising the chances of a sale.

Experience consistently shows that an effectively marketed property will sell faster, and for more dollars than a poorly marketed one. Professional agents do put effort into building a brand presence and it can be short-sighted to begrudge this. If you strongly feel it unfair that your agent is ‘promoting their business at your expense’, you are dealing with the wrong agent. There is an easy way to address this - find an experienced, high profile agent with a proven track record and leverage this to your advantage. The best exposure for your property is achieved when you combine appealing promotion of your property with the brand presence of a major real estate operator in your area. Your property is then taken to the market, supported by the profile of a strong media presence and the trusted reputation of a major player in the industry. It’s a win/win result for everyone. Experience strongly shows that most property sales come from a combination of six essential elements:

Professionally produced promotional materials

Quality consistently sells for a premium, so to achieve a good market price, it is

vital that you ‘wrap’ your property with professional copywriting and photography. A good agent will organise this for you. Don’t be tempted to save a few dollars and exercise your creativity to grab a few shots with your digital camera – engage a professional to deliver a premium result. A small investment upfront will pay dividends. Good advertising doesn’t need to have the whole story in it, but it does need to have multiple compelling reasons for a prospect to contact your agent. A good agent will also ensure your materials are designed to be visually and emotionally appealing, and also address the logical elements associated with the sale… how many bedrooms, room sizes, land area and the like.

Prominent display signage

These are very affordable, high impact and when done properly typically generate around 40% of enquiries on a property. Prospects are typically reasonably well qualified as they know the local area and have already seen the property from the outside.

Internet exposure

The internet is rapidly becoming a search tool of choice for home buyers. Agency websites and reference sites like www.realestate.com. au attract large numbers of visitors around the clock, and it is much easier for buyers to do their homework in detail before they inspect your home. As a result, buyers are more qualified when they make their initial enquiry. For sellers, the internet represents a great opportunity to receive feedback from the buying public. If the property has been on

the internet for a week, or has had 70 people look at the listing, but the agent has received no phone or email enquiries, then it is a good indicator that the property is overpriced. In contrast, if 30 people have reviewed the online listing and the agent has received 24 enquiries, there may be an opportunity to increase the price. If time allows, commence your internet marketing 1-2 weeks before other advertising, as it allows time for your agent to use the enquiries to guide final pricing. Because of the increased research time and resources online, agents now have less time to build relationships with buyers. This makes agent selection even more critical. A good agent will be internet savvy, and help sellers ensure their property is effectively represented online. They will also understand the various tools and opportunities open to buyers. One of the significant impacts of the internet is a reduction in price variation between properties. It is much easier to see if properties are accurately priced in comparison to other homes on the market. If it’s not priced appropriately, then it is likely to attract little attention, and you miss out on the impact potential of a new listing. It is a more effective strategy for owners to list their properties close to their final price expectation, rather than advertise high and sell low.

Print advertising

Everyone loves property. In areas like the Sunshine Coast, weekly property publications enjoy a large following of loyal readers – creating a significant opportunity for anyone selling their home. But it is wrong to think that advertising will help you sell your property for more than it is worth. Before you run your first ad, you need to ensure your property is priced realistically for the current market. Don’t think that running a huge campaign will help you sell your $800,000 property for $1.1million, as it won’t. Likewise, you don’t need to advertise to give your property away – sell the same property for $600,000 and the agent could simply make a couple of phone calls to find someone who wants a gift. Anyone can sell at a bargain basement price. Real skill comes from being able to sell at market price – and that skill is the primary reason you

engage a good agent to help you sell your home. Advertisement size will give the reader an indication of the price you are expecting – even if it’s not listed on the ad. Your agent will advise you on this.

Test and measure

A decision to sell your property is ultimately a business decision. When you are in business, it is widely acknowledged that the most important regular activity is marketing. A good agent will keep detailed records of the sale process – the advertising schedule and ads, an enquiry register, and the source of every enquiry. You should expect regular updates from your agent, and should be open to discussing the effectiveness of the advertising campaign with your agent on a regular basis. Adjust the campaign to suit the profile of the enquiries and the urgency of the campaign. A poorly planned advertising campaign can actually damage the sale price.

Editorial support

A good agent will always pursue editorial and media publicity to support your advertising requirements. Make the sale of your property newsworthy and generate free editorial by identififying unique features about your home e.g. we work from home and configured the home office to suit any home business; and sharing some interesting background on yourselves or about the circumstances of the sale.

ANSWER: To obtain the best possible price and sale conditions, marketing is an essential element of your campaign. A modest upfront investment in marketing will typically be rewarded through the sale process.

How do I present my property properly to sell at a premium?

Answering this sounds like common sense, but it is amazing how often people make mistakes with the presentation of their home. Prospective buyers will want to inspect your home – either at an Open Home or a Private Inspection. When prospects are on-site, it’s the attention to detail that makes all the difference. The following checklist will help ensure that you address the essentials when presenting your property for sale…

PROPERTY PRESENTATION CHECKLIST What makes your home different or special • Write down the things that appeal to you about your home and share it with the agent • Document little/hidden things that may not be immediately obvious, so the agent can share them with prospective buyers e.g. a family sized hot water system; insulation to make the home cooler.

First impressions Marketing your home starts from the street! When you drive up to the house, ask yourself “Would I buy this home?” The buyer’s first impression will normally be a lasting impression.

Kitchens and bathrooms sell Buyers consistently rate these rooms as key influences of their decision. Place special emphasis to ensure they are presented to highlight their main features: • Wash dishes and keep sinks and benches clean and empty • Think about creating sensory appeal – the aroma of fresh coffee, freshly baked bread or cookies (cinnamon in boiled water is an easy alternative) or essential oils all add warmth to the scene • Freshly cut flowers are always a winner • In the bathroom, remove dirty laundry, cosmetics and toiletries, and leave surfaces clean and shiny • Fix any leaking taps, loose doorknobs or squeeky hinges – don’t leave visible traces of obvious problems

Natural light is essential Don’t leave your home feeling dark and dingy.

To enhance initial perceptions:

• Open curtains and blinds for instant appeal

• Mow the lawn and trim the garden

• Trim overgrown bushes outside windows

• Tidy up any patchwork landscaping and remove any garbage

• Clean any marks off walls

• Ensure entry is clean and presentable

One of the most cost-effective things you can do to get ready to sell is to remove clutter in and around your home. Remember YOU ARE MOVING! Get a head start on the packing.

• Repair the driveway • Do simple repairs that may hint at neglect or decay

De-clutter and pack up the house

We may feel comfortable in our homes when we’re surrounded with our own belongings. But too many personal effects can distract a buyer from seeing what the home has to offer. With less clutter, most homes appear larger. This can help to justify the price you’re asking. • Hide knick knacks, newspapers and magazines and stray paperwork – they might have meaning for you, but to visitors, they can easily be interpreted as mess or clutter • Simplify the presentation - clean the fridge front, shelves, bedside tables, bookcases, sideboards and the like. • Space makes a room look bigger – while selling, it may be worth removing some of the furniture or ornaments temporarily • Don’t leave valuables around that may be stolen or damaged

Cool or cozy – the right environment creates instant appeal • Open windows for summer breezes or turn on air conditioning for really hot days • Water features should be clean and running • Have a jug of iced water and glasses handy on a side table – make it look refreshing • If there’s a fireplace, ensure it is clean and presentable

Serious buyers inspect storage They want to know how functional and liveable the home is, so they will open cupboards and drawers. • Make sure cupboards and storage areas are ordered, clean and tidy • Ideally have the garage presentable

Swimming pools should sparkle

• Check to see how well your agent builds relationships with the tenants. • Ensure that your agent includes tenants in the discussions regarding open times and dates • Perhaps offer the tenant an incentive to cooperate – consideration for your tenant (and perhaps a small gesture upfront) could be rewarded with a properly presented home and potentially thousands of dollars extra on the selling price • Take some of the presentation responsibility away from the tenant. • Offer to pay a cleaner for a spring clean, or a gardener to tidy up the yard

Clean and green Gardens and outdoor private spaces are important to buyers. Ensure it is properly presented: • Cut the lawn and trim the edges and hedges. • Green sells, so ideally you should fertilise before you start your sales campaign • Pot plants should be healthy and maintained • Plants and flowers inside or on the balcony add softness and warmth to living areas

Ask your agent for a list of fixup for sale projects to complete before marketing your home to prospective buyers. In some cases, it can take weeks, or even months to get the work done. That’s why it’s wise to start early. It’s usually not a good idea to show your home to anyone, except your agent, until all the sprucing is done. You can’t undo a first impression.

• Vacuum the pool and clean away leaf matter • Ensure the pool water is clean and clear • Hide the automatic pool cleaner – you don’t want buyers thinking about the work associated with maintaining these areas

Tenants can help you sell – if you plan it right If you are selling a rental property, it is to your advantage if your tenants are cooperative, and work with you to present the property in the best possible condition:

ANSWER: Presentation is critical, and becoming more so. Look at your home from a visitor’s perspective and pay attention to the details.

Should I renovate before I sell my home?

A common mistake people make is to embark on expensive renovations ‘to sell the home’. It will be easier to sell if we put the new kitchen in…

Committing to and investing in expensive renovations immediately prior to sale can be a very risky activity. Experience shows that for most sellers, it is far better that you save your dollars and put your effort into highlighting the potential.

Good agents are skilled at selling the vision. People will happily pay for potential and often appreciate the opportunity to add value for their own purposes and to put their own stamp of individuality on their new purchase. If there are obvious low cost things to address, by all arrange to fix things up. Simple things that add value include: • Repainting needy areas in warm neutral colours – paint is about the cheapest improvement you can make • Cleaning the carpet • Removing pet smells – you may be used to them, but they can be a real turn off if the pets are not yours

At times, you may decide that it makes more sense to stay in your current home and to renovate, than it is to move into a new home. If you have mid – long term plans for your home and you want to tailor your property to better suit your needs, then considering a renovation makes perfect sense. You can save on selling and relocation costs, and end up with a freshly renovated home that fits your needs.

But unless you are a professional investor or experienced renovator, don’t undertake a significant renovation before you sell.

ANSWER: Sell the potential of the property – you are typically better off to offer it to the market with the potential for the buyer to renovate it to their own specifications.

Two more questions, but this time the buyers are asking... “How long has it been on the market?” There is no advantage to you to have your property still sitting on the market in six months time – it becomes stale and you are telling the market it is overpriced and / or you are getting desperate. Sharp and fast is the general rule. Have your property priced realistically for the market, and undertake a focused marketing campaign. For best results, your agent should be comfortable in saying “This property is well priced. It represents value and the owners are serious about selling”.

“Why are they selling?” Buyers obviously like to know a property is on the market and the seller is serious about selling. Unless the agent can demonstrate that you are serious about selling, buyers will commonly not enter into negotiations.

In summary... We hope this information has provided you with a useful overview to the process of selling your house. In essence, when selling your property, there is a direct relationship between Price, Presentation, Promotion and Timespan. If your property is not presented or promoted well and you want to get your property sold in a hurry, then you will probably need to drop the price. If it is well presented and promoted and you have the time to wait for the right buyer, you can expect to realise a better price. With the right agent, fair market pricing, excellent presentation and a strong marketing campaign, you have a formula for sales success. Your agent’s role is to help you review these four elements, and develop a campaign that works for you, and your property. Your agent works for you. They will present your property to the market and get paid when the property sells. Their time should be spent finding you a buyer and negotiating the price up – not beating you down in your price expectations.

Best wishes for your journey…

hur m i W n e r o L

LOREN WIMHURST OWNER AND FOUNDER

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