Wednesday, March 23, 2011

Sell before you buy - the better option

The housing market is a similar type of ‘beast’, regardless of which state you live in. Varying dynamics, resources and economics affect each of the states in different ways – that’s a given. Yet people’s needs to have a roof over their heads, desire to upgrade, downsize or simply live in a different location rings true wherever you are.

In South Australia there’s a noticeable trend amongst consumers that’s quite different to those on the Eastern seaboard. It’s the need to buy first, and then sell.

Perhaps this is well founded in a boom market when property is highly contended, prices are escalating and the good homes are sold in a matter of days. But right now there is certainly no shortage of beautiful homes available and this approach to transacting property makes little sense.

While the knowledge of having a roof over your head may offer much needed security, the financial burden imposed by buying first can be far from comforting for most.

First there’s the real risk of spending more than you have.

People move homes for a multitude of reasons, with the most common being to upgrade and therefore take that next step up the housing price ladder. This often means tightening the budget that little bit more for the first 12 months or so, while you build up the equity in your home. The last thing you want to do is over spend.

When buying first you are virtually ‘guessing’ how much cash you’ll get in your pocket from the sale of your current home. If you find yourself saying “Well if we get an extra $30,000 for our property, we can afford this one – let’s buy it”, then batten down the hatches and cut up the credit card. In a market that’s slowing, getting ‘top dollar’ by boom standards is a lottery ticket you simply can’t rely on. What you can rely on, is the cold hard cash from a completed sale.

Then there’s the topic of bridging finance.

If you’re downgrading, go for it! It’s highly likely that your sale will cover any of the outlaid costs and you’ll still come out better off. When you’re upgrading this exercise can be an additional un-wanted cost on top of an already pricey process. Really, this is a last resort. Like mortgage insurance, if you can avoid it, do!

Now that’s all assuming you buy your new property cash unconditional. If you buy it ‘subject to the sale’ of your own home and your current property doesn’t sell, then you could risk loosing the one you had your heart set on.

Of course there’s a risk to selling first as well, and that’s not being able to find the home you really want. A longer settlement or short term rental can easily solve this problem, plus the added attraction of you being a ‘cash buyer’ will put you at the forefront when making any offers on a new home.

From my view, the pros far outweigh the cons when it comes to selling first and then buying. What do you think, is the financial risk worth it?

Mandy Wurth, General Manager
www.toop.com.au
© Toop Real Estate Group

Wednesday, March 16, 2011

Australia's most livable city, set to be the most vibrant

Clipsal time! Fast cars, crowds of people and a vibrant night life, not to mention an incredible boost to our local economy. It’s a time you don’t want to miss out on, yet on the property scene it’s also the reason for this weekend’s drop in open homes.

Next weekend we’re likely to see a spike in these numbers as current sellers get back on track and a new wave of property is released to the market. It’s all in the timing. With just 4 weekends of selling time remaining before Easter, these properties will be hitting the market hard and fast – just watch the auction numbers peak around the 16th and 17th of April.

There’s certainly no shortage of supply at the moment. Buyers are playing their cards close to their chests, in no hurry to make a move, while sellers continue to gradually adjust to a softly declining market. Meanwhile, on the development scene, there are no signs of anything slowing down.

It makes me wonder… are we in danger of over-developing our city and suburbs?

If we were in a boom right now, I probably wouldn’t even be raising the question. Properties would be in high demand, selling quickly, and subsequently there would be a ‘shortage’ in housing. But right now this is far from reality and too many new homes could result in some significant financial pain in the short term.

The ’30-Year Plan for Greater Adelaide’ outlines a growth in population of 560,000 people for our metropolitan area over the next 30 years, bringing our total population to 1.85 million by 2036. With an average of 350 new people living here each week we quite obviously need to plan in advance for their arrival, that’s a given; But how much of this housing is already in place? There are a number of existing developments on the market right now which are only partly sold. The last thing needed is to compound this problem. However if what we’re really looking at is changes of lifestyle, upgrading our city and increasing the volume of affordable houses, then Adelaide could be about to undergo some significant changes.

With the Adelaide Oval set to become an even more prominent sporting arena, Rundle Mall to receive a $400m redevelopment and the Torrens precinct due for rejuvenation, self confessed ‘Urban Futurist’ and Lord Mayor, Stephen Yarwood is forging ahead to step our city living to the next level.

“The Adelaide City Council is the fastest growing council in Metropolitan Adelaide per capita… the baby boomers want to move back into the city, young people may not necessarily want 2 dogs, 2 cars and there’s lots of different opportunities – it’s going to be about housing diversity”

The CBD alone has been earmarked to increase by an additional 15,040 dwellings, with a minimum 2,250 earmarked to be ‘affordable’. Now home to over 23,000 overseas students, Adelaide continues to be their city of choice when it comes to studying in Australia – a position we want to retain.

The Property Council named Adelaide as ‘The most livable city in Australia’ – if we get this right, we’ll also be the most vibrant.

To learn more about the city’s development, watch the full interview with Stephen Yarwood at www.toop.tv, episode 69.

Mandy Wurth, General Manager
www.toop.com.au
© Toop Real Estate Group

I’m going to let you in on a little secret…

There’s a common misconception that’s been going around society for years. It’s so strong that even some members of our industry get caught up in it, especially those who are new. So allow me to clear this up for you.

Real Estate sales people don’t sell houses.

You can laugh, be shocked and ask ‘well what on earth do they do?’, but this statement is true everyday of the week.

Selling a home is the product or result of what we do. It’s what deems us to be ‘successful’. It’s how we’re ranked if you like, much like winning a medal in the Olympics.

What we actually do, is something quite different. We connect people. We connect the right buyer with the right seller to get the best sale outcome.

We’re in a customer service industry – not a sales industry. For some practitioners, this is forgotten far too often. The ‘List & Sell’ mentality overpowers the need or desire to deliver great service, resulting in clients being confused, angry and upset.

Now back in the days of the market ‘boom’, rightly or wrongly, this became excusable. Properties were selling so quickly, and so well, that the speed and results made up for any lack of service on the sales person’s behalf. It was literally a case of standing at the front door, handing out a brochure and sitting back while the offers rolled in. It was also a time when we saw an influx of sales people starting out in the industry, looking for some ‘easy money’.

Those days are long gone. More than ever, we are back to the roots of this industry. To be successful and achieve a sale it’s about service, service and more service. It’s about over delivering, not winning the listing then ‘flicking’ it on to someone your client has never heard of!

Selling or buying a house is a process most people go through only once in 7 to 9 years. It’s unfamiliar, often emotional and can be the cause of much anxiety. The last thing any seller needs is to feel as though they don’t know what’s going on with the sale of their own home.

What it comes down to is this. Sellers, it’s your right to expect and demand great service from your agent. When you list with an individual, you should be working with that person, not someone else. If you find yourself saying, ‘We listed with you, and now we never see or hear from you’ – you listed with the wrong one. Equally so, if you shopped for the cheapest agent, then the old adage ‘you get what you pay for’ will ring out loud and clear.

Real Estate is a customer service industry. Great service should be a given, regardless of who you list with.

Mandy Wurth, General Manager
www.toop.com.au
© Toop Real Estate Group

Monday, March 07, 2011

Beware of agents who ‘buy’ listings

When it comes to business, I have a QAP philosophy; Question, Answer, Proof. Right now, there isn’t enough of this happening in our industry. Clients are asking questions and they’re being answered, but they’re not backed up with the proof.

These days, whether we like it or not, words hold less value than they used to. Throw away lines, unrealistic claims and over promises have led society to be somewhat cynical and distrusting when it comes to dealing with anyone who has a ‘sales’ tag.

Somewhat unjust, this mentality is understandable. When it comes to real estate, the industry has evolved significantly over the past 25 years. We’ve left behind the ‘used car salesman’ label to step forward as professional and ethical sales practitioners.

The problem is a few ‘bad apples’ always remain. These are the guys who come in and ‘buy’ your listing; and they tend to be easier to spot when the market tightens.

They over promise on price, slash their professional fees to ridiculous levels, then under deliver in service and results.

As The Advertiser’s Anthony Keane wrote a couple of weeks ago… “Many will tell you what they think you think you want them to say, while others will say what they think your bank wants them to say. Get it?”

Unfortunately I do – certain agents don’t give clients the truth when it comes to the market place. They fail to back up their ‘claims’ with the cold hard facts and as the clients are so pleased with what they are hearing about how much their property will sell for, plus the crazy 1.1% fee they’re being quoted, they tend not to ask!

End result? You get what you pay for. In this case an unsold property and an unhappy owner.

Sellers, start challenging the agents that appraise your home. Seek the proof when it comes to pricing. Ask the sales person how they arrived at that particular price for your property. If it’s more than what you were looking for, and they can substantiate it, then great. If it’s less than what you were looking for and the stats back it up, then realize that this may be where the market is placed right now. Either way make sure you see comparable property sales plus a report of what’s currently on the market and similar to your home. That way you’ll be clearly seeing your properties potential, not looking through rose coloured glasses which could have a disappointing result.

Then, pay close attention to how they negotiate the professional fee; these are the same skills they will use to negotiate the best price for your home.

With interest rates remaining on hold this week, and Mad March underway, the next couple of months may see the market pick up a bit as interstate and overseas interest hits town – only time will tell.

Anthony Toop, Managing Director.
www.toop.com.au
© Toop Real Estate Group