The Unconditional Blog

The impartial voice of the industry

 

Archive for the ‘Buying / Selling a home’ Category

6

Take a home for a “test drive”

Posted on: October 23rd, 2008 | Filed in Buying / Selling a home, Online marketing

It’s entirely logical – you are prepared to spend $35,000 buying a new car so you take it for a test drive – for an hour or even a day, in that time you get a feel for it and can get comments from the family and friends, you can see if it fits in your garage and how it looks at night and during the day.

So, as it has been asked so many times – why when you spend $350,000 on a new house can you not take it for a test drive?

After all you are going to spend far more time in the house and own it far longer than the car.

Well needless to say some innovative UK house builder has cottoned onto this idea and thanks to Mark Brinkley a property blogger in the UK- the author of the House 2.0 blog I can share this with you.

Oakwrights – a Hereford based home builder (we are talking bespoke Oak frame homes – not the mass produced homes on faceless estates!) is offering a night in their showhome at a cost of £150 per night (NZ$388). Available for Friday and Saturday this “Try before you buy” scheme is a massive hit with a future booking schedule with no vacancies for the next few months and as Mark highlights a house builder with a strong future order book.

I wonder if we will see such a scheme in NZ. It’s a smart way to not only amortise the costs of a showhome, but think of the marketing benefit.

3

10% off for 10 days – the US property market starts a sale!

Posted on: October 7th, 2008 | Filed in Buying / Selling a home, International

With the continuing problems in the US property market one of the largest and most respected real estate companies Coldwell Banker has decided that it is time to have a sale!

From the 10th to the 19th October the company is encouraging sellers to join up and offer their property at a discount of up to 10% of the current listing price (most US properties are advertised with a list price). This bold and highly innovative initiative is designed to try and kick start the lackluster property market into life.

Whilst clearly a smart bit of marketing, with extensive coverage across all the media – Yahoo, Wall Street Journal Market Watch – it seems a surprise that they forgot to add the details to their website for eager buyers looking to see what’s on offer!

Backing up this marketing programme is some very interesting statistics which are worth sharing. The company carried out a recent survey of 3,379 of their real estate professionals in markets across the United States, 56 percent said that listing prices in their market remain above where they need to be to attract qualified buyers. Additional findings from the survey include:

  • 77 percent agreed that the majority of sellers in their market still have unrealistic expectations regarding the initial listing price for their homes
  • 79 percent agreed that homes in their market that are priced appropriately are attracting more buyers and moving more quickly
  • 76 percent feel that a 10 percent or less reduction in listing prices in their area is all it will take to help push these homes over the “tipping point” to a sale

Our brokers and sales associates agreed that, even in the current climate, it will not take much movement to attract those buyers who have been watching and waiting” noted Jim Gillespie, president and chief executive officer, Coldwell Banker Real Estate LLC. “Depending on the market, a price reduction of just 10 percent or less just may make the difference in both satisfying sellers and bringing buyers to the table

It will be interesting to see the results and also to see if this tactic is deployed here in NZ.

8

Look at me ! Look at me !

Posted on: October 5th, 2008 | Filed in Buying / Selling a home, Online marketing

The challenge for a property owner looking to sell in what continues to be a very tough market, is as ever the task of making their individual home shout out “Look at me! Look at me!“, as the cautious buyers out there scan the listings of this an other websites.

To get that compelling wow-factor that makes sure your property is seen by the best and largest audience is all about content and presentation. This is a subject that has been covered before on this blog – specifically “one relevant property picture is worth a thousand words“, “Thinking of putting your house on the market, don’t be afraid of being a tall poppy” and “Need assistance promoting your property for sale?“. What is interesting is the evidence of how critical it is to get the basics right.

From the US – one of the most actively used and popular real estate websites (Zillow) comes the amassed capability of their analytical team to share this information :

Listings with at least one photo were likely to be viewed 41% more times than listings with no photos

Even more dramatic, providing a full address increases your listing’s traffic by 271%

This data was crunched from Zillow’s 3 million listings over a 7 day period. It is also no surprise that these facts align directly with the research undertaken in NZ by Nielsen Online earlier this year that asked online respondents what were the most important elements required of listings on a real estate website.

There were 12 “wants” that scored over 70% in terms of useful or very useful. Of this dozen 3 scored over 95% !!

Accurate price range of properties for sale – 96%

large selection of images – 96%

Address of properties for sale – 96%

It stands to reason in this Google empowered world were consumers exoect to be able to undertake research on anything anytime of the day or night, real estate should be no different – so if you are a home owner looking to sell – ask your agent why aren’t you showcasing my property to make it shout “look at me ! – look at me !

4

Successful advertising of property for sale requires a mix of media

Posted on: October 1st, 2008 | Filed in Buying / Selling a home, Online marketing

There is no disputing the fact that the web has become the most trusted, the most effective and the most popular source of real estate research. The most recent NZ survey by Nielsen Online showed that as measured by the average time spent researching real estate in a week – specialist real estate websites were by far-and-away the most popular with 167 minutes per week (that’s close to 3 hours per week!). By comparison traditional print media was around 65 minutes (just over an hour).

However whilst the web undoubtedly delivers answers, real estate search and consequentially real estate advertising needs to trigger the head as well as the heart, for often it is an emotional decision. That is why in the same research respondents indicated that they used on average just over 4 types of media when looking at buying property. The list of media was extensive and covered specialist property magazines, community papers, real estate office windows, for sale sign boards and newspapers.

Given this clear view of the value of a mix of advertising material it would be alarming if a local authority policy passed in Brighton, England banning “For sale” boards in the city were adopted elsewhere. The ban there is up for appeal as the view of the local Estate Agents Association feel that the existing ban in the historical part of the city was extended as a function of somewhat misleading consultation.

What I found most interesting (and I appreciate the highlighting of this by Brightsale Real Estate company in the UK) who equally were somewhat surprising by the blog post made by a London real estate company who seemed to have surprised many in the industry by coming out vehemently in saying

“The world has moved on and there’s no excuse now for unsightly advertising boards with the internet as a major resource for buyers and tenants. In our view a blanket ban creates a level playing field amongst estate agents – and we fully support a total ban on agents’ boards in London.

Although considered a necessary “marketing tool” by estate agents in London, they are unsightly and detrimental to the environment”

Now I can agree with the view that “the internet is the major resource for buyers and tenants”, but to believe that it alone can provide the necessary breadth of marketing required for a property I think is a little hard to swallow. However on reflection I think their view may be reflective of the situation in the UK where the real estate sign is nothing more than an advert for the real estate company and with high density housing does end up creating visual pollution especially in the cities.

I think fortunately in NZ we have a better approach to For Sale Boards which are seen here more as an extension of the marketing of the specific property as they in the majority of cases provide photos & specifications of the property.

0

Do you need a property advisor as well as a real estate agent to sell your home?

Posted on: September 1st, 2008 | Filed in Buying / Selling a home
Business consultant

With property sales running at 10 year lows, clearly vendors needing to move will naturally become ever keener to seek any ideas of how they might sell their property. A sense of desperation can creep in as per the article in the NZ Herald titled “Downturn in property market means strategies needed to sell“.

However before you rush out and engage a specialist consultants as a property educator or property advisor; I think it is really important to reinforce some basic facts around the role and services of a real estate agent.

Do not just assume as this article says that the “value real estate agents can add to the transaction is that they have the ability to promote your property and put it in front of large numbers of people” – real estate agents are about far more than just promoting property.

Now just to be clear this article profiles a company called BackStop. I do not know of this company or its proprietor, I make no judgement of their capability or professionalism and I have absolutely no reason to believe that they will not provide a professional service. All I am keen to do is provide clarity around the services of a real estate agent that a vendor should and can expect – a comprehensive service that is all included in the fee that an agent will charge on successful completion of a sale.

Let’s look at the key elements of selling a home, of which the main 4 are:

Market Assessment

To be able to best present a property for sale a thorough evaluation needs to be undertaken to assess the market demand. This process requires information and statistics on factors such as local sales and population movements, employment prospects as well as knowledge about existing buyers and sellers in the local market. Now some of these statistics are accessible by anyone with a good understanding of where to look, a good starting point in the case of prior sales is QV, and for census information Statistics NZ.

But when it comes to understanding the current local market a local real estate agent is going to know far more than a consultant. Agents have access to far more current information on sales than for example QV whose data is usually around 3 months old. An agent will likely know what was sold last week, as well as last month and 3 months ago. In addition an agent will be aware of the interest in recent properties that have been on the market as well as properties potentially coming onto the market.

Marketing

Thorough and professional marketing is a key component of selling a property. If a property is inadequately marketed it will fail to be seen by prospective buyers, not only that, it is important to recognise that marketing a property is not just a simple advert. The content and form of every piece of communication is critical as well as the most appropriate medium. A great piece of communication inadequately communicated is as bad as a bad piece of communication broadly communicated.

A real estate agent has access to unique channels of communication that others cannot access. Take 2 key ones – Property Press is a case in point, a very powerful tool for showcasing property utilised extensively by buyers and not accessible but to licensed real estate agents. Equally this website is only available to licensed agents. Well you may say, anyone can use Trade Me – very true, but with a far more comprehensive content of properties for sale (realestate.co.nz with 75,000 vs Trade Me with 55,000) it is clear that buyers value the content on this website, in fact based on Nielsen Online data realestate.co.nz attracted 96,000 unique visitors in August that did not visit Trade Me Property.

Facilitation

Marketing a property is not selling a property; it is only the start of the process. The process of buying a property and conversely selling a property takes time and for the transaction to go through requires a large degree of persuasive contact between buyers and vendors agents to ensure information flows frequently and smoothly. The whole process of viewing properties and collating of reports as well as clarifying interest is something that agents do as second nature that others outside of the industry fail to appreciate and recognise as the time commitment is significant. It is all about building trust and relationships and keeping the ball rolling, not something done so easily by a vendor or a consultant.

Negotiation

And finally when you have an interested buyer the key task is closing the deal. This is sighted as the one reason why so many would-be private sales fall through, the inability to get a deal agreed, that is even before the issue of negotiation of price. A local agent acts for the vendor, they have an incentive to close a deal and to secure the best price – that is why they are paid on commission, they are removed from the massive emotional connection with most family homes and act accordingly, something advisors and educators would be hard pushed to provide.

So whilst on the face of it there can be a sense of desperation in today’s market when sales are so slow that sellers need to seek alternative means of marketing their property to sell. It is really important to be clear around the role and services able to be provided by a real estate agent before leaping at the first advisor that comes knocking seeking to provide that golden nugget of unique knowledge and skill to get your house sold.

Tread wisely to avoid spending more money and ending up no better off!

6

When falling house values meet rising rates – where do you turn?

Posted on: August 12th, 2008 | Filed in Buying / Selling a home, Money Matters

This is exactly the scenario likely to be experienced by many home owners who entered the market over the past 2 years, as the latest property statistics from QV show the path forward on home prices is decidedly negative.

Almost in an ironic twist it is also QV who are commissioned by the majority of local authorities to provide revised valuations of properties for rateable valuation assessments. The trouble is as was reported last week the fact is that the current round of rateable assessments will show the lag effect of property appreciation, albeit on a slower pace than 3 years ago, whilst the current prices in today’s market may well show prices below that rateable value.

So what recourse is there for the home owner? and interestingly is this another example of “fast on the price increase / slow on the decrease” pricing model shown by petrol companies? – I am thinking ahead 3 years when with property prices at best flat and at worst slipping will we see rateable values come back with a consequential reduction in council rates on the dollar?

In NZ there is an ability to lodge an appeal to the rating agency who undertook the rating assessment. However in good old California, home owners are fortunate to be able to call upon a state law (Proposition8) passed back in 1978 which allows homeowners to get a temporary reduction in their home’s assessed value-and, accordingly, their property taxes-when the housing market enters a slump. Recognizing that that applies to virtually everyone who purchased property in the state within the past few years, it is no surprise that this situation has created some industrious new businesses specifically Prop8.org which is a new consumer advocate group that was formed specifically to help California consumers take advantage of the law.

Prop8.org provides tax-assessment appeals services for commercial, industrial and residential properties throughout California. Prop8 can provide market data and analysis needed to advocate the lowest possible tax assessed value. Clients get full-service representation, from the initial filing of the assessment appeal application and supporting documentation, through negotiations with the county assessor-even including a formal hearing before the County Tax Appeals Board, if necessary. Prop8’s services are available on a contingency fee basis for 50 percent of the first year’s tax savings or via a flat-fee plan that covers the entire process-with a three-year guarantee-for USD 495. For homeowners who bought their homes between 2004 and 2006, the average savings that result from hiring Prop8 are between US$1,500 and US$2,500 per year, the company’s founders say. (All information courtesy of Springwise).

Is it about time we had more consumer advocacy groups in NZ to provide assistance to all home owners (who still represent the largest single consumer group) but are generally viewed as financially able to manage such issues, for without a strong (not hyper-inflated) housing market we all suffer as we have seen here over recent months a significant drop in consumer confidence and consequentially economic confidence.

6

UK migrants to NZ – a good knowledge of local building issues is vital

Posted on: August 7th, 2008 | Filed in Architecture & Construction, Buying / Selling a home

Only last month we had the Dutch reporting on how our houses were so cheap and now this month we have an article in the respected UK Guardian newspaper telling prospective migrants to be wary of buying houses in NZ. On the one hand such profile is encouraging, clearly with economic and social issues in the UK, NZ is attracting attention for people looking for a new life; however more accurate reporting of facts would help as this UK article has some significant inaccuracies.

I therefore thought it would be beneficial for UK readers to get some clarity on specifics raised in the article:

  1. “The market is certainly going through a difficult stage. In the past three years interest rates have risen by 3%, the price of petrol has doubled and inflation is bordering 4%, but people’s salaries have not kept up with inflation” – the first three facts are correct and reflect most countries, but to say salaries have not kept pace with inflation is not true.
  2. “New Zealand is currently plagued with a unique phenomenon called leaky homes” – I think a plague would be significantly overstating the facts – there are a large number of homes impacted to a greater or lesser degree in some areas of the country, if they amounted to 10,000 I would be surprised – that would be around 1% of all homes, hardly a plague. Also leaky homes are not a unique phenomenon, the Canadians in British Columbia experienced such an issue in the 90’s.
  3. “The problem (of leaky homes) is down to the architects, builders and councils – and also because the forestry groups promote untreated pine and the Building Industry Authority mistakenly approves it.” – untreated pine was used up until 2003, since then changes to Building Industry regulations have made treated pine mandatory. In additon a raft of other stringent regulations concerning weather tightness have been implemented as well as new Building Act.
  4. “It’s important to check what materials were used in the construction of the house. Look out for exterior walls made of single-layered bricks supported by a wooden frame. Also, while wooden weatherboards were once common they have now been replaced by cheaper alternatives. These are fibre or cement sheeting, mostly known as Fibrolite, Hardiplank or monolithic cladding. (Hardiplank is known to have contributed to the leaky homes syndrome.) Check for roofs made of galvanised steel and tiles of bitumen, pebble or cement. These materials, while saving on cost of construction, often compromise the durability of these houses”. This is a bit of a muddle, brick veneer on a timber frame is very common form of NZ construction of single level homes, built to design specifications they should provide no problems at all, in fact many UK homes are brick veneer (double brick) on a timber frame.
    Timber weather boards are still used, however the new form of fibre cement board under the brand of Linear are highly durable and not just a cheaper alternative. This form of weatherboard is a recent development. Fibrolite, Hardiplank and other monolithic cladding are used much less these days than in they were in the 90’s.
    A vast number of NZ homes have galvanised steel roofs, this is a part of NZ and have been for many decades, equally bitumen or concrete roof tiles, all of these options if well maintained provide a very durable system.
  5. “That’s not all. In New Zealand, a lot of insurance policies don’t cover termite damage or structural problems, making repairs expensive” – we don’t have termites in NZ, we have bora which can be a danger. As for insurance I think you would not find any significant difference between NZ and UK.

Whilst I don’t think the article was designed to be alarmist, it could have been interpreted that way, the best advice which I am sure any prospective buyer would do, whether a local buyer of new migrant is to get a detailed building inspection report, after all a $1,000 report is a small price to pay when making an investment of $400,000.

15

Auckland property prices – falling or rising??

Posted on: August 6th, 2008 | Filed in Buying / Selling a home, Real Estate Industry

The monthly sales figures and average price reported by Barfoot & Thompson within the first few days of the month have become a key lead indicator to the national figures released by REINZ around the middle of the month. The question is always how to interpret the data. As ever today’s figures present the same challenge.

Firstly the sales volume of 629 is a marked improvement over June at 556. July is normally always a slower month than June as we head into deep winter and July this year has been a depressing month, I think we would agree with bad news and bad weather – neither conducive to good property buying. So you could say things on the property front are actually looking brighter. One important point though that Peter Thompson made in his release was the that the figures did include the sale of 87 apartments – clearly a distressed sale to be so highlighted. If these are removed the “revised” figure of 542 looks about right on a season basis for July – not any more of a slow down than would have been expected.

As to pricing – the average price is reported as $497,479, this represents a 5.3% decline from June and 9% down on July 2007 – clearly this would signal that prices are falling.

But wait a minute what of these 87 apartments? – the implications is that they were sold as a distressed lot – the question is what impact this would have on average prices. Lets look at a couple of scenarios:

  1. If the apartments were say sold at $300,000 each then the average price for the month excluding these would have been $529,178, a slight increase on the June figure of $525,316.
  2. If the apartments were say sold at $150,000 each then the average price for the month excluding these would have been $553,255, a significant increase on the June figure of $525,316.
  3. But what if these apartments were say sold at a real distressed price of $99,000 each then the average price for the month excluding these would have been $561,441, a very significant increase on the June figure of $525,316.

The key thing here is how the impact of this situation can effect average pricing – equally this scale of bulk sale in a slow market would effect the median price.

The 2 charts below tracks the sales volume of Barfoot & Thompson over the past 2 years and details their average price, it also compared this to the average price reported by REINZ (the figures released by REINZ are median price, so this allows a more relevant like-for-like comparison). The first graph shows the actual reported statistics, the second graph shows the figures if these apartments were excluded (based on the second scenario of $150,000 each) how the picture would look.

15

Buying your first property? – a new book offers valuable insight & advice

Posted on: August 3rd, 2008 | Filed in Buying / Selling a home, Money Matters, Property Investing

When it comes to the moment that you decide that you should take those first tentative steps on the property ladder, what you want is sound advice ideally from someone that you can not only trust – but also someone who understands what people of Gen Y really want and expect!

The answer to your questions, together with a “blow by blow” account of how to get started with investing in property is all detailed in a great new book “The Young and Singles Guide to Property Investment”. The book written by Jodi Cottle is a NZ book written to help young and single NZ’ers better understand buying a house / apartment / rental; it doesn’t really matter what your first step is going to be – you will be better off reading the book.

Jodi is a very smart young person who’s bought and sold close to half a dozen properties and she is yet to celebrate her 25th birthday. In addition she runs a mortgage advisory service (Sable Mortgages) based in Auckland with a spearate business supporting ex-pat kiwis based in London buy property in NZ. We have partnered with Jodi and Sable Mortgages to provide the realestate.co.nz mortgage advice service on the site – who better to advise and support prospective buyers than someone who has this kind of track record under their belt!

The book is written without the bluster of some of the books claiming to make you a millionaire by lunchtime – it is simple – yet at the same time comprehensive, but above all it is honest.

“I certainly don’t regret any of the decisions I have made, albeit that some have cost me money. I don’t regret anything because each occasion has taught me priceless lessons.”

The book charts in detail the process for the buying of her first 6 properties – again a candid sense of empathy pervades her descriptions

“I was so pleased to get rid of this property as the tenancy issues just continued to go from bad to worse. Again, this was another good lesson for me as I got to go through a mediation process with the tenants”

The book is currently for sale in most Whitcoulls around the country or you can buy a copy online from Jodi’s website for $24.99 – a great investment or gift for someone starting out on the property ladder.

Special Offer

Now we have secured 5 copies of this book to give away for free!!

What you have to do to win one of these copies is to submit a comment to this post with your recommendation of a property currently featured on the realestate.co.nz website that would be a great first home – just post the listing number or link. The first 5 to posts with suitable properties will recieve a copy of the book.

1

The web complements, but should never replace the human component of real estate

Posted on: July 30th, 2008 | Filed in Buying / Selling a home, Real Estate Industry

The content and tone of many of my blog posts are positively in favour of using the web to seek out the answers to real estate questions – whether they be for buying or selling a property.

It was therefore somewhat of a salutary reminder of the heart of this real estate business that I read this blog post by Bradley Inman – he of Inman News. In reading it I think I was overwhelmed by a sense of empathy. Here was a person who for getting on for almost two decades has advocated the opportunities presented by the web and social media to bring transparency and empower agents, and yet when it comes to seeking a realtor to sell his parents home – the tried and trusted elements of human connection proved the most valuable.

The post is all the more heart warming as if you ever meet the guy he wears his heart on his sleeve and is passionate about his family, his company, his industry – in that order.

Have a read of “Bradley find that realtor” !

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