Flying the flag for the final time

Holding my final open home was a little surreal and I couldn’t  help but reflect on how they have been a major component of my 30 year real estate career.

Back in 1989 open homes were rare, mostly at the most once per week per property and never on a business day. After all, it wasn’t really kosher to advertise an address, that was seen as too invasive of a client’s privacy. Besides, the real estate agent held the stock and purchasers would have to ask to find out what property was held at any one time as the salesperson controlled the market. The internet didn’t exist and knowing a good real estate agent who held/controlled the listings was important in order to get the jump on any other purchasers in the hunt.

Open homes became more popular and real estate salespeople soon began to appreciate the marketing benefits of sourcing prospective purchasers and sellers along with meeting and greeting the locals.

I look back and open homes have had a huge influence on the success of my real estate business over the years, a great way of “keeping the shop door open” and that one extra open home might just flush out that right buyer, as it did just last week prior to an auction.

On the flip side they came at a big cost, as they largely controlled when I would start and finish work on the weekends, sometimes up to eight in one day! Then of course the hours spent on the phone or sending emails gathering in that ever important feedback for our sellers. They meant sacrificing precious family time and determined when we would take weekends off or sometimes even determined our holidays. Certainly they were an important factor in the level of the service we provided and what consequently became expected of us. Come rain, hail or snow we would be there – to keep the open home flag flying. Today’s purchasers expect open homes and like being able to choose which homes they inspect in a non-threatening way of being able to come and go as they please.

Service-focused agencies regard it as best practice to hold at least three open homes per week for the first four weeks on the market. We now even have open home apps for collating and tracking interest – a great way to manage feedback and target-market prospective purchasers when listing the house down the road.

So, in summary and being honest, I’d have to say that the whole open home thing has been a bitter-sweet pill in reality. Moving forward I am really relishing the thought of having much more uninterrupted time. Will I miss open homes, probably not, but unquestionably they are a necessary evil for any successful real estate team.

North-eastern suburbs hit new high

Once again the northeast of Christchurch is benefiting from the growing demand for property in the wake of the momentum created following the opening of the new Avonside Girls’ and Shirley Boys’ shared campus earlier this year.

October’s REINZ stats highlighted a record high for the area – (Waitikiri, Tumara Park, and Parklands) at a median sale price of $490,000 – comfortably above the city median of $480,000 also a record. It’s certainly encouraging to see families moving into the area for schooling rather than the reverse as was the case for many years in the past.

New RVs – do they reflect market value?

Most of you should have received your new rateable value from Quotable Value late last month. If not, you can access them here. While it is known not to base market value solely on the RV they are a useful reference point when arriving at the likely market value of a property. The components used to formulate an RV include location, land size and zoning, the age of the property along with its square meterage and construction type. Largely RVs are struck without inspecting a property, so will not reflect a property’s appeal or lack thereof. The aesthetic value, aspect and architecture are key factors, and are only measured and determined by the marketplace when a home is for sale. Like beauty it is all in the eyes of the beholder!

If you feel that your RV isn’t reflective of the current market value of the property, you can simply lodge an objection at the QV website.

Contact us today to request a no-obligation market appraisal to gauge how the market value of your property sits in relation to your new RV.

Preparing to sell in the new year

Having learnt over the years how the real estate marketplace vibe refreshes over the Christmas/New Year period Team Griff backs the new year market as one of the premium marketing windows for sellers. It is normal for us to queue up new listings late in the year ready to launch early in the new year in order to ensure our clients properties are “the first cab off the rank”. This means you capture the attention of the refreshed new year purchaser who is often frustrated by the lack of stock while people are still holidaying or preparing their property for sale. The feed of new listings coming on the market in the new year is often slower too, equating to less competition if you are ahead of them.

Our recommendation is to talk to us sooner than later so that we can put a strategic plan in place to maximise your return.

Passing of the baton

With Griff senior moving on to a life after real estate we recently celebrated his 30 year real estate career with clients, colleagues, family and a few friends. Mindful that the success of Team Griff over the years has largely been derived from the loyalty of our clientele we felt it was fitting that we celebrated together.

Here’s a snippet from Griff’s speech: “Firstly, to those of you who I have had the privilege of assisting as clients. Your loyalty, trust and support has been and continues to be humbling. Without you I simply would have been unemployed – thank you!”

 Assuming the full leadership of the team, Caleb is now clearly at the helm ready for business as usual. We felt it important to make the transition as seamless as possible, so our clients have the confidence they continue to be in good hands. Equally importantly, the peace of mind that their best interests are given top priority.

Click here to view photos from our recent client appreciation evening.

Property investment basics from a long-term investor

Have a plan

Back in the 1990s when rents were around $200 per week for the average home in Christchurch I envisaged owning 10 investment properties. My thinking was this would give me a gross income of approx $100,000 per year and with costs roughly around 50% that would leave me with a net income of approx $50,000 – not bad as a passive income I thought at the time. As critical as having a plan, is executing that plan. I still have clients thinking about committing to investment property 20 years after our first discussion!

 

The bank, the tenant and the tax man

These three will immediately put their hand up to help you build a property portfolio. With reasonable capital/equity and income most banks will back you to buy investment property and with current interest rates so enticingly low, it’s really a no brainer. Add to that national population growth which equates to tenants never being too far away from knocking on your door needing a roof over their heads. They too, driven by their need for accommodation will assist with your property investment plan. Then of course there is the tax man. While he plays strictly to the rule-book there are still good tax incentives for owning investment property in New Zealand. All your related expenses are tax deductible and with owning investment property is also likely your overall taxable income will reduce too. This makes it even more attractive if you are pulling a reasonable income and are on a higher tax code.

 

Using somebody else’s money

Property is one of the few investments I know of that you can actually make money from debt. While if you are only buying property for capital growth reasons you may be disappointed with the short term growth rate, it is interesting to note that over the years property typically doubles in value every 7-10 years in New Zealand. Getting a return on little or no cash down is about as good as it gets and it is important to remember that capital growth is based on market value not the size of your mortgage.

 

Good debt – bad debt

This is probably the most profound advice my accountant has ever given me and I have never forgotten it! I still find myself applying this principle in business and investment decisions. In a nutshell, good debt is money borrowed for assets that appreciate in value, while bad debt is money borrowed for assets that decrease in value. For instance a car loses value the moment it is driven out of the showroom while real estate largely increases in value. It’s not that difficult to determine which will bring long term benefit. Remember this basic investment principle and you are well on track.

 

A mortgage can be great savings scheme

Paying a mortgage can often be better than paying into a saving scheme. One, it is compulsory, two, it doesn’t get bigger (smaller if you also pay off principal). Thirdly, the cost of the mortgage you are paying off is offset by the return you are getting on that money. With property yielding a much better return than term deposits, it makes total sense to keep or invest in real estate in this low inflation, low interest rate era.

 

Not a get rich quick scheme

Property has never been a get rich quick scheme and my experience is those that are normally implode before you get the time to check out their validity or typically don’t stand the test of time. As above, with national population growth placing increasing demand on housing stock and with no more land being made, unquestionably pressure will remain on available real estate. An investor with a steady hand on the tiller and focus on the distant horizon is unlikely to go wrong with a long term focus.

 

Christchurch ideal for property investment

Clearly in the post-quake rebuild phase greater Christchurch now has a property surplus. On the scale of larger cities throughout the country, Christchurch has some of the most affordable real estate currently available and it is my belief it will not be sustainable for this to remain at such levels for too much longer. It is also my professional opinion that as the current heart and vibe of the city continues to build it will sell itself both nationally and internationally resulting in strong attractive growth. Investing in Christchurch sooner than later makes total sense for the astute and those poised to take action. Personally, I plan to hold my local property portfolio as I strongly believe we are on the cusp of another growth phase, besides I am struggling to find anything better to sink my funds into.

 

Right now I’m thinking that investment in bricks and mortar is a better option than money in the bank.

Team Griff has long term experience in the property investment market and are happy to assist you with devising a plan to build your property portfolio. Coffee is a great place to start!

Team Griff chalk up 12 auction sales in a row

Our recent sale of 80 Lamorna Road in Parklands marks Team Griff’s run of auction sales under the hammer to twelve. While careful not to toot our own horn too much, in a market where just shy of 60% of properties sell on or before auction day, we’d like to think a run of twelve in a row is kind of a big deal.

Looking back at our past campaigns, we’ve uncovered seven key factors that have contributed to our recent auction successes.

1. Our sellers have invested into the marketing of their home
For each property we list, we present a customised marketing package that we believe will attract interest from the right cohort of buyers. Our experience has taught us which forms of which media yield the best return on investment for our clients. Our marketing campaigns have a particularly strong digital focus, comprising of upgrades on Trade Me Property and Realestate.co.nz, as well as targeted social media advertising to our database of buyers we have met at other similarly priced properties. By investing into the marketing of their properties, our clients can then make their decisions confidently knowing that their property has received full exposure to the market.

2. We respond to the market
In a market that is constantly shifting, it’s important that we remain in tune with the market. If we find that we have not received the desired levels of enquiry on our property, we make a point of reviewing the messages in our marketing to ensure that we’re striking the right chord with the buying public. It may be necessary to adjust the price-point at which we’re pitching the property, or to utilise new marketing methods. We’re not ones to just sit back and hope for a better response next weekend without doing anything differently. If things aren’t going to plan, we’ll sit down with our clients and give our recommendations as to how we can best respond to the market.

3. We hold more open homes than our competition
We’re strong believers in keeping the door open when marketing property. When the vast majority of listings are open once or twice a week between the hours of 12 and 2, buyers struggle to prioritise which properties to look at. We consider three open homes a week to be the absolute minimum – and will often open properties midweek towards the end of the working day to make it easy for people who work normal business hours.

4. The grunt of the Harcourts machine
Of the 12 auctions we sold under the hammer, four of these were sold to purchasers who were introduced by other Harcourts salespeople. There’s also many more salespeople who showed buyers through our listings, and those working with underbidders. Sure, many of the smaller agencies will put their hand up to auction properties as well, but the reality is that they don’t have the network or the infrastructure to support an auction campaign. Harcourts have 450 sales consultants working across the city – and they’re all well incentivised to get buyers through your door.

5. Readily accessible property information – including a building report
One of the major bugbears for buyers in today’s market is the waiting around to receive the necessary property documentation. We believe this should be made freely available – hence we use Agentsend.com which means this info is readily accessible at the click of a button. It also acts as another lead generation tool to help us identify qualified and engaged prospective purchasers. We find that the largest obstacle for a buyer to pursue an auction property is the need to obtain a building inspection report, so we recommend our sellers provide one to make a buyer’s due diligence process as easy as possible.

6. We too feel the urgency of auction
Because auction provides a hard deadline to work towards, we as agents know that we have to do everything possible to get buyers to the auction, and then to get them bidding. Every week at Harcourts Gold, our auction campaigns are reviewed and critiqued by all salespeople in attendance, and this works really well in keeping the property at the forefront of our colleagues’ minds. We do this because we know that we have just a limited period of time before auction day to get things right.

7. We know how to work with a single bidder
It’s easy to think that you can’t have an auction with only one bidder. But the reality is that in today’s market, about 50% of sold auction properties are sold in auctions with only a single bidder. Of the 12 we sold, three were one-bidder auctions. Heading into auction day, we will have a fairly clear idea as to the number of bidders we’re likely to have participating – and if it is only one, we will simply wrap our strategy around that. This often involves sitting down with the buyer prior to the auction and take them through what is likely to happen. Conditional buyers are also encouraged to attend in the event the property does not sell, and we encourage them to take part by letting us know if they would be prepared to pay more than what is being bid – all with a view of providing our sellers with every opportunity to sell.

If you’re looking for a sales team with a proven track record of auction excellence, be sure to reach out – we’d welcome the opportunity to assist.

EQC announces new policy for on-sold over-cap properties

At EQC.govt.nz:

On 15 August 2019 the Government announced a policy that allows owners of on-sold over-cap properties in Canterbury to apply for an ex gratia Government payment to have their homes repaired.

If you’ve bought a home in Canterbury and discovered that it is damaged over the EQC cap, you may be eligible for an ex gratia payment to cover the cost of repair.

Under the policy, you will have twelve months (no later than 14 August 2020) to register your interest for the ex gratia payment. After that time, the policy will not be available.

If you qualify you may be able to receive an ex gratia payment equal to the agreed cost of repair.

To qualify for the support package, you’ll need to meet the following criteria:

  1. You have purchased a property in Canterbury after 4 September 2010 (the date of the first 7.1 magnitude Canterbury earthquake) and on or before the announcement of this support package on 15 August 2019; and
  1. Before selling the property the previous owner settled a claim with EQC on an under-cap basis; and EQC cover depends on how the natural disaster damage occurred.
  1. Post-sale you have discovered the property has incomplete or insufficient repairs either as a result of defective repair or through damage which had not been properly assessed; and
  1. The cost of the repair, together with the amounts previously paid by EQC for the property is more than the EQC cap ($100,000 +GST); and
  1. You are unable to access private insurance to cover the cost of repairs.

This is will be a welcome resolution to many homeowners who found themselves in a seemingly impossible situation of having no recourse to the original insurer of their property due to believing that all necessary earthquake repair work had been completed. However, the fact that this will require agreement with EQC as to the extent and cost of necessary repairs will be cold comfort for some!

Reminiscing 30 years of real estate

Having just celebrated 30 years with Harcourts one cannot help but reminiscing on the past. In this modern age it is hard to believe that 30 years ago we didn’t have the internet and the internal computer listing system didn’t even have photos – how painful!

Open homes were few and far between and it was taboo to advertise an address – oh how times have changed.

One of the most consistent factors of the real estate market is change. An experienced salesperson soon learns to change the game plan before lamenting of a poor market. One thing that never changes is the need of establishing lasting relationships of loyalty and trust. Trust is not something you can buy, but it is something you can earn. Like money, it can take years to accumulate and if you are not careful you can also lose it overnight.

With December being the time for me to hand over the reins to Caleb and move onto new horizons in Central Otago it is comforting to know my clients will be in good hands. Team Griff places importance on ensuring the needs of our clients come first, as we say “it’s about us keeping you in the driver’s seat” ensuring your agenda is our agenda.

Spring is here!

As the days start to lengthen, the spring buds appear and the sun shines, this is always welcome relief following the chills of winter. Personally, feeling that wee stir of excitement knowing the fishing season is on the horizon does the mind and soul good.

On the real estate front, spring is traditionally where we see the highest number of new listings coming on to the market in a concentrated time period. Being strategic with your timing is something we believe is important to manage effectively. This is where a savvy salesperson’s input will ensure your marketing plan will bring an optimum result.

It would be fair to say that stock levels were low over winter. In some locations this created genuine shortages and it wasn’t uncommon for those properties that were on the market to receive heightened enquiry given the demand.