The ‘sting has come out of the tail’ of the property market, according to John McGrath, chief executive of recently floated estate agents McGrath.
‘Unlike previous periods of market correction the buyers are not seeking bargains; they’re just not prepared to pay the premium levels that were being achieved earlier in the year,’ he says.
While no one is talking about a dramatic house-price correction in 2016, experts including Mr McGrath agree that cooler winds are set to blow through the housing market in the coming months, meaning selling your home at auction is no longer a ‘fait accompli’.
What this means, says Angus Raine, executive chairman of Raine & Horne, is that vendors are required to do a little more work to ensure that their properties stand out from the crowd and adopt a different mindset.
1. Be realistic
Firstly, be realistic about your expectations and try to not be emotional. Also, it’s best to block out memories of your neighbour’s property selling way above expectations only a few months ago, because the market has changed.
According to John McGrath, when assessing value, vendors need to understand what is the right price for the property ‘without the hysteria that was driving many sales over the past year or so’.
It may also be a worthwhile exercise to consider things from the buyer’s perspective.
‘Twelve months ago, buyers were panicking due to the fast-paced nature of the market and rushing into things through fear of missing out altogether. They now have time to make a more measured approach and can now properly analyse what represents a market price,’ Douglas Driscoll, chief executive of real estate agents, Starr Partners, says.
Angus Raine’s advice is for home sellers to write down their worst-case result, a reasonable result and best-case scenario and try and operate within these parameters.
2. Research your market
‘To help your pricing, check out similar properties currently on the market for sale. Also consider the properties that haven’t sold in your patch – the chances are that the owners have priced them too high,’ Mr Raine says.
According to Mr Raine, gaining an understanding of market conditions is now a very straightforward task thanks to the many free property websites that are available to consumers and by speaking to a reputable estate agent.
‘In 2016, there’s really no excuse for not doing your homework, and knowing the value of your home,’ he says.
Leanne Pilkington, managing director of estate agents Laing+Simmons, agrees: buyers should listen to their agent, but also do their own research.
‘Look at what is on the market at same time so you can see for yourself what you are competing with. And rather than wearing your owner’s hat, pretend you are looking to buy something,’ Ms Pilkington says.
3. Choose your real estate agent carefully
Anyone can sell ice-cream on a hot summer’s days, but can you sell it in winter? The same goes for estate agents and property.
‘Earlier this year almost any agent could sell property, but that has definitely changed over the past couple of months,’ Douglas Driscoll says.
He advises vendors to choose an agent who can demonstrate local knowledge and a comprehensive track record in your local area.
‘Also, be prepared to pay a little extra commission for the right agent – it will be worth it in the long run as they are almost certainly going to achieve a better sale price for you,’ Mr Driscoll says.
Apart from a good track record, agent longevity is also important, according to Chris Wilkins, director at Sydney agents Ray White Drummoyne, so stick with agents who have sold property in similar conditions before.
Mr Wilkins also advises selecting an agent dedicated to one clear method of sale rather than one who promises to do ‘whatever it takes’ to secure a sale, which he says is just a way to win business.
When choosing an agent, vendors should also not be afraid of grilling them a little about their experience, how they would market your property to get the best result and even who the target market would be.
‘Talk to the agent about where the buyer will come from and how they will target that demographic,’ Ms Pilkington says.
It’s also worth heeding the advice of someone who has been working in a market that has been cooling for sometime like Rebecca Freeman, of LJ Hooker City Residential Perth. She suggests vendors research the most active agents in the market.
‘Those with the most listings in their marketplace will always have the best understanding of the market trends and what is on the shopping list of buyers. They’ll be able to advise on any styling or additions that will appeal to buyers,’ Ms Freeman says.
4. Get your marketing right
The general rule, according to Angus Raine, is that in a more competitive market, vendors need to be prepared to spend more on print and online advertising to attract the right buyers to their property.
But he says, there are other ways to attract attention such as through a newspaper article if your property comes with an interesting twist, or backstory, and has some great photos showcasing its best features. ‘This is a great way to promote your property to a wider audience,’ Mr Raine says.
‘Also if your real estate agent doesn’t know his or her real estate editor at the local community newspaper, ask them why not. You could be missing out on a great way to promote your property.’
Douglas Driscoll suggests vendors work closely with their agent to generate the right marketing mix. ‘In a cooling market, you cannot simply rely on internet advertising, so consider what other channels could prove beneficial.’
This might mean social media for a younger demographic or more traditional advertising for older investors.
‘Make sure the type of advertising you use will get the most inquiries from your buyer demographic,’ Ms Pilkington says.
5. Spend money on presentation
While tales of falling-down wrecks or uninhabitable hovels selling hundreds of thousands of dollars above their reserves grabbed headlines at the peak of the market, in general presentation is important to securing a good price in all market conditions.
But it’s particularly important in times of weaker demand and more patient buyers.
‘In a stable market, presentation will help to move a property faster. Therefore it’s critical that you repair broken windows and doors. Likewise, a fresh coat of paint and some simple landscaping can add street appeal to your property,’ Mr Raine says.
Inside the property, he says clutter is a big turn-off. ‘Also remove personal items such as family photos and knick-knacks so that potential buyers can picture themselves in the property.’
Paul Bond, director of real estate agents Hodges Sandringham, suggests vendors decorate their home to appeal to a broader market and clean up the front garden so the house has ‘great street appeal’.
Depending on your budget, you could also consider using a home stylist to make your home stand out. ‘Home stylists are not as expensive as a lot of people assume and can help work wonders,’ Mr Driscoll says.
6. Don’t rule out selling at auction
While tumbling auction clearance rates may be turning off vendors, according to Perth agent Rebecca Freeman, there is a misconception that auctions are only for hot markets.
‘An advertised price can often be one of the biggest deterrents to engaging buyers; buyers can rule themselves in or out of contesting a property based on a figure, without making a thorough examination of its value or opportunities.
‘An auction will always find the market value of a property and will capture the widest interest,’ she says.
But as with agents, choosing the right auctioneer is vital during weaker market conditions.
Edwin Almeida, managing partner of Just Think Sydney Real Estate, says buyers should insist that the auctioneer inspects their home before the day of the auction, rather than as he claims many auctioneers do, just rely on a few minutes briefing from the estate agent prior to the auction.
‘How can the auctioneer you have entrusted to be on the front line for you on the day of sale and perform at their very best when they are not familiar with your property and all it has to offer?’ he asks.
7. Offer flexible terms and don’t rule out the first offer
If you’re not selling at auction – or have tried and failed – Angus Raine suggests one way to get a buyer over the line is to adjust the terms of the sale instead of the price.
‘There might be situations where it’s necessary to negotiate a lower price to win a buyer. However, offering an extended settlement date or accepting a smaller holding deposit will often assist in getting the sale across the line faster,’ he says.
Mr Raine also says it can be a mistake to hold out for a better price, as many vendors tend to do, if they get an offer within the first few weeks of the property hitting the market.
‘Keep in mind that the first offer that comes your way, is often the best.’