The 32 reported house sales in Gisborne for May continue the trend of low sales volumes for 2010. While agents, banks, mortgage brokers, removal companies and solicitors plus a host of associated business would dearly love the return to the higher levels of sales activity that was seen in previous years the fact remains; this is our current reality and we have to get used to it.
Despite the gloom it’s important to remember that houses are still selling, buyers are still buying and life is still going on. There will always be genuine reasons why people need to sell. The most common are the 3D’s : death, divorce and da bank. And people need to upsize, downsize, or transfer out of town. And there are people still looking for investment property too. There will always be opportunities for buyers and sellers to make lifestyle or wealth gains. You just need to keep an eye on the bigger picture, instead of retrenching, reacting negatively and shrinking to the current reality. Remember, fortune favours the bold!
June 22 2010 | Market opinion | No Comments »
We all know that auctions work for sellers because it gets their property sold. But when the market is flat like it is now, auction also provide buyers with an opportunity to secure property at good market prices. That’s because sellers who choose to go to auction are usually more motivated to sell and are therefore keener to negotiate in order to get their property sold. From a buyer’s point of view, there’s nothing more frustrating than trying to deal with sellers who are ahead of the market. But auctions work for both parties as they provide a greater degree of certainty for everyone, that is, a sale. And at the end of the day that’s what we all want; to know that you have either sold or bought. Watch this week’s video for more reasons why you should buy at auction. And for sellers watch this video for more reasons why you should consider selling by auction in this market.
June 12 2010 | Market opinion | No Comments »
You just got the phone call from the real estate agent letting you know that your offer on the house you have your heart set on has been accepted. You paid the GV (Government Valuation, or RV – Rating Valuation). Did you:
A Pay too much?
B Pay a fair price?
C Got it for a steal?
So, what is the correct answer?
Actually, it could be any of the above, depending on many factors. Firstly, how recent was the RV? If it was older than 12 months, the likelihood of it being relevant slips away quickly. Markets change. Banks recognise this and when they require a Registered Valuation for security purposes they usually want it be not more than 3 months old.
The condition of the property has a huge impact on its market value. Improvements to property are only captured in the Rating Valuations if they require resource consents or building consents. Rating Valuations don’t necessarily capture landscape gardening (you could easily spend $60,000 plus here). Nor do they take into account new kitchens, bathrooms, interior and exterior painting, or new carpets.You could easily improve a property by spending over $100,000 and it still wouldn’t be reflected in the Rating Valuation.
Then there is the motivation of the seller. If they needed a sale and were keen to take the money, then maybe they settled for a lower end of the fair market range. Or maybe they weren’t in a hurry to sell and you had to pay what they wanted in order to get it (usually a dream price).
Really, it’s hard to say if the GV was an accurate market value or not. But most buyers know this. They know what is fair market value. They know what is over priced and they know what’s a steal. And they know (deep down) that GV doesn’t usually have a lot to do with market value.
It’s not about GV. It’s all about the competition. Sellers have competition and so do buyers. When a house is for sale, it is never sold in isolation. It is in competition with other houses for sale. And buyers only pay what they have to pay in order to get the property and no more (usually more than the other buyer) .
That’s how the market works.
Mmmmmmm. now that’s food for thought …
June 06 2010 | Market opinion | No Comments »