If all NZ real estate companies adopted the policy that open homes could only be held on weekdays or Sundays, would you:

a) Agree with the policy?
b) Comply with the policy?

Did you notice there is one vital activity missing from that list of weekly activities?

Of my last 16 sales, a grand total of 3 sold to someone who came through the open home as their first point of contact with the property.

Is this unusual? Is your experience the same? What if every listing was ‘viewing by appointment’? Would it make any difference to the sales results?

In awarding Diana and several other top real estate people the Real Estate Institute of New Zealand had this to say:

The Institute’s awards are not about having the most number of properties sold, or the highest dollar value. The award criterion relates to commitment to quality customer service, significant achievements, how success has been achieved, and any innovative methods used to realise personal and business objectives.

A great year Diana and an even better one ahead I’m sure!

With this many vehicles dropping off or picking up students it can be a recipe for chaos at the school gates, with parents dropping off their children while double-parked, parking on broken yellow lines, blocking driveways and slowing traffic flow.

To sort out this growing problem, in early 2003 Auckland City Council started to enforce a zero tolerance policy towards those ignoring the traffic rules – the ‘Chaos at the School Gate’ programme. The programme has been very successful and is helping to reduce the danger to children as well as improve traffic flow around schools at this busy time of the day.

The programme includes placing parking officers on patrol outside schools to observe non-compliant behaviours and issue tickets to those illegally parked.

Auckland City Council runs the programme at 15 schools each term. Other schools can go on a waiting list for the next term . Schools that have experienced difficulties with illegal parking have first priority to join the scheme.

Schools on either programme are required to inform parents that the school is part of the Chaos at the School Gate scheme. Schools must put the information in their newsletter and a send a copy of this to the council.

If you would like to be part of the programme please contact www.aucklandcity.govt.nz.

In 2009, 500 homes sold in Remuera.  If 250 sold as a direct result of being open, each open home had about a 5% chance of achieving a sale.

For every 20 hours spent opening homes, on average approximately one home was sold.  This means, on average, every 30th to 40th open home produced a sale.

When sellers ask if we will be doing open homes on their home, what do we say to them?  Do we tell them the truth regarding the actual effectiveness of open homes? 

Do we do open homes because, yes there is a slim hope of finding a buyer, but mostly we are more likely to meet potential future sellers?

Do our sellers deserve to be told the truth?  Would the truth set you free? 

If all your listings were marketed as “viewing by appointment” would you sell fewer homes?  Would your sellers think you were lazy?  Or smart?

What does your Capital Value mean?

It is an assessment of the probable price that would have been paid, including land and buildings, for the property if it had been sold on 1 July 2008, updated to reflect changes in properties up to 30 June 2008.

It is not the market value for a property.

The capital value does not include chattels which will need to be added on when estimating an appropriate sale price.

How close to my CV will my house sell for?

You should use your CV as a very “very” rough guide.  Your CV could potentially be 30% or more out, either above or below your real market value.  I have sold many homes for figures that vary from one extreme to the other when compared with their CV.

As an example, a property I sold after a competitive auction in September 2008 had a 2005 CV of $1,130,000 at the time of the sale.  The new 2008 CV is $1,370,000.  It was in a street in which many homes had sold in the $1,000,000 to $3,000,000 range in the three years since 2005, hence the apparent increase in value.  The sale price however was only $1,060,000.  The council got this one very wrong.

There are many other examples of homes that have recently sold in excess of the new 2008 CVs. 

How values are assessed

The process of revaluation reflects the changing nature of Auckland city, it’s development as New Zealand’s largest centre of commercial activity, and it’s growing population. Properties are valued on a site by site basis and in context with other properties in the area and other suburbs.

The valuation process consists of the following main stages:

• Property inspections

Before each three yearly revaluation council inspects approximately half of all residential properties from the roadside to check that their records are up to date.

Checking half the properties means that every property will receive an inspection each six years. In addition, council inspects between 5,000 and 6,000 properties annually as a result of building consent revaluations.

For each inspected property, council checks the property classification (ie house, town house, apartment, factory or shop) to see that it is correct. They review improvements made to the property, including garages and pools, to see whether any have been made or removed since the previous valuation. They also review the quality and condition rating of improvements. Land attributes, such as view and contour, are checked for accuracy and consistency with surrounding properties.

Sales and rental analysis

Valuers review what properties are selling and renting for in your area.

Council obtains information about residential and commercial rental levels from various sources (tenancy services, market surveys, real estate agents, property management companies).

Valuer General’s audit

The Rating Valuations Act 1998 requires the Valuer General to audit revaluations before giving approval for the values to be published.

A rigorous audit process is carried out over a period of three weeks. This audit

• checks the processes used to prepare the revaluation
• carries out statistical analysis of sales to determine the accuracy of the assessed values
• may require random checks of properties.

Publishing of proposed values

Once the Valuer General approves the process and the values, council publishes a public notice and sends out a valuation notice for each separate rating unit to the owner of the property and the ratepayer, if different. The notice advises the new values and the closing date for objections.

An objection period

The Rating Valuations Regulations 1998 prescribes that objections must be lodged before the expiry of the date specified in the public notice. The objection period is 30 working days calculated from the date of the public notice for general revaluation and 20 working days for other valuations.

Property rates setting

Council uses finalised values for setting rates from 1 July of the year following their publication unless they have been amended as a result of an objection review or there has been a change to the property. They continue to use the published values for setting rates until the objection is finalised.

They use the annual value rating system, which means property values will be based on either:

• the amount a property might earn in one year if rented (the estimated gross less 20 per cent, or 10 per cent if there are no buildings on the land) or
• 5 per cent of the property’s capital value

It is a requirement of the Rating Valuations Act 1998 that they use the highest figure of these two options to determine the rateable value of the property. This means that a sample of residential and commercial property owners will receive an enquiry requesting rental information.

I just love this famous exhange between two clever historical figures:

George Bernard Shaw telegrammed Winston Churchill just prior to the opening of Major Barbara: “Have reserved two tickets for first night. Come and bring a friend if you have one.”

Churchill wired back, “Impossible to come to first night. Will come to second night, if you have one.”

Since November last year all licensees have been required to compile a CMA for every new listing.

For some agents CMAs are easier to compile because of the style of property they deal with.  The houses in some agent’s areas are all very similar.  Similar size & shape, similar construction, similar section sizes, etc.  Easy to do a CMA there I suppose.  Like pricing a used car.  The difference in value between neighbours could be judged by the relative freshness of the paint or the tidyness of the garden.  Give me rows and rows of Coronation Street houses any day! 

Don’t get me wrong, I’m not moaning about having to sell homes in leafy Remuera.  It’s a nice place to work.  BUT – you couldn’t get a more different place from Coro Street physically, literally, geographically, topographically.  It’s not uncommon for a house to sell for $1million, then the somewhat nicer house next door sells for $3million.  Go figure!

I have respect for our valuer colleagues but I’ve always marvelled at how difficult their job is (especially in non-Coro areas).  How on earth do they accurately value a home when they’re comparing sales of homes they’ve never been inside?  I suppose the answer is ”they do the best they can with the tools, knowledge & training they have”.  Oftentimes valuers get it right, but sometimes they get it wrong.  When agents are asked to (now required to) ”appraise” someone’s home they suffer from the same human condition.  They sometimes get it wrong too.  I certainly have.

So how do real estate agents (in areas unlike Coro St) provide CMA’s that are as reliable (or even more reliable) than a valuer’s registered valuation?  I’m glad you asked.

Having spent many hours poring over sales statistics to do CMAs this past month, I believe the only way an agent can be accurate (or even close to accurate) is if the agent has been inside the homes they choose to insert into their CMA. 

Of course it’s impossible for agents to internally inspect every home that has sold, but the next best thing, to further improve the industry’s professionalism and accuracy, is to change the way CMA’s are done. 

Imagine this new rule if imposed by the REAA:  ”At least 20% of properties used as comparisons must have been inspected internally & externally by the agent who signs the CMA”.  (Or how about 40%?)

Consider the implications of such a rule change:

1. Agents would need to caravan more properties (better product knowledge)
2. Rookies would need manager or experienced agent input (in line with the new Act/REAA philosophy)
3. Would ’low market share’ agencies get to see 20% of all listings? (highlights limitations of low market share)

February 2009 saw the world financial crisis in full swing with global bank failures, mortgagee sales, emergency meetings, job losses and stimulus packages.  Interest rates plummeted in an attempt to stabilise economies and keep people spending.  The local real estate market was limping along in an uncertain frame of mind.  In hindsight, the first half of 2009 was an excellent time to buy property. 

March 2009 was slower than any March I had seen in recent times.  Many of my sales saw clients accepting small losses.  Thankfully most had some immunity, especially those buying and selling on the same market.  The end of the financial year again saw me recognised in the elite top 2% of Barfoot & Thompson salespeople.  This year I finished with my highest ever ranking:  14^th out of 1000+ salespeople.

I remember April 2009 as the start of a prolonged period of very thin Property Press magazines.  The catch-cry of most agents was that they couldn’t get enough listings to sell.  Sellers were fearful that if they sold they wouldn’t achieve a reasonable price.  In turn this meant that anyone who had sold was unable to buy due to dwindling stock levels.  This whole supply and demand imbalance eventually led to a significant revival in median prices throughout NZ towards the end of the year.  April also produced Susan Boyle’s rendition of “I dreamed a dream” and the rest, as they say, is history.

May 2009 marked the 13^th anniversary of the commencement of my real estate career.  Way back in 1996 I made what seemed a huge decision to leave the Navy and join Vision Realty in Milford.  Vision was a unique group that didn’t believe in auctions or open homes.  Thankfully I was one of a chosen few who received a salary during my first year.  Without that fortuitous easing into a commission only sales role I’d probably be onto my third or fourth career by now.  In May I returned to Sydney for my yearly dose of inspiration and learning at the Australasian Real Estate Conference (AREC09).

June 2009 saw the untimely death of one of the world’s most influential entertainers, Michael Jackson.  It also marked a turning point that saw a distinct shift from buyer’s market to seller’s market.  All of a sudden properties were receiving multiple offers and the Barfoot & Thompson auction rooms were full again.  Barfoot & Thompson’s Auckland market share held well above 30%, and in Remuera we achieved a creditable 50% share of the market for much of the year.  I took most of June off and spent time with my family.

In July 2009 I published my thoughts on how to solve New Zealand’s leaky home crisis.  My main concern was that naïve buyers and immigrants were at great risk of being stitched into homes that were clearly worth less that they had paid.  The new Real Estate Agents Act has made it harder for this to happen, but there are still significant risks for people who buy privately.  The entire leaky home saga in NZ is a bigger can of worms than most people realise.  I believe we need a Royal Commission to sort the mess out.  If Government keeps side stepping the blame and stalling a decent compensation plan, by 2014 no-one will be able to make a claim to help with the cost of repairs to a leaky home.  I meet people every week who own at-risk homes.  Some are aware that their asset is at risk of losing value but the travesty is that most are completely unaware of the stigma that surrounds at-risk homes built (broadly) between 1991 – 2003.  If you have one of these homes, whether you’re selling or not, please feel free to have a chat with me about it.  If you do nothing else, I urge you to get a professional building inspection report ASAP.  This could prove to be the best advice you’ve received so far in 2010!

August 2009 saw the world’s fastest man, Usain Bolt, lower his world record time for the 100 metre sprint to an astonishing 9.58 seconds.  Having been a keen runner as a youngster I was in total awe of his achievement.  The number of monthly sales recorded by Barfoot & Thompson was an incredible 65% higher than in August 2008.  This remarkable result provided a great check on how bad things really got in 2008.  I trust we won’t see slumps like that again!  I made my 35^th sale in Armadale Rd Remuera.  It sold about $100,000 above an ousted competitor’s estimated appraisal.  I always enjoy results like that.

I spent September 2009 listing quite a few homes.  Spring is always a busy time for me.  The world lost Patrick Swayze, the Commonwealth expelled Fiji and Samoans started driving on the left hand side of the road.  The All Blacks lost the final Tri-nations game to the Springboks 29-32.

October 2009 felt just like October 2006.  The market was booming and my phone and email inboxes were overflowing with enquiries.  During the month I received an unprecedented 200 email enquiries at a rate of over six per day.  On one Thursday I received an incredible 26 enquiries in addition to numerous phone calls and physical inspections.  Not surprisingly a beautiful home in Omahu Rd Remuera attracted eight bidders and fetched a top price for the thrilled owners.  It was the year’s most exciting auction and the talk of the town for weeks afterwards.

November 2009 was one of my busiest on record.  I had so many open homes that my weekend working hours eclipsed my week day hours.  One particular week I was marketing four similar grammar zone villas within close proximity of each other.  Having that much control over the local market put me in contact with a huge number of customers focused on buying in Remuera.  During January most of these people will receive calls & emails telling them about my new listings as they hit the market.  November also saw the introduction of the Real Estate Agents Act 2008 administered by the new Real Estate Agent’s Authority (REAA).  It was a much needed and positive change designed to better protect consumers and improve the real estate industry’s public image.

In December 2009 most economists decided the GFC was probably over and positive GDP growth was in sight.  Simultaneously the US government raised their official debt ceiling to US$12.394 trillion. Personally I can’t get my head around how that debt could ever be paid off, especially when you consider that 12.394 trillion seconds equals 396,608 years – gulp!  On the home front Auckland median prices had risen an astonishing 14% over the past 12 months.  My crystal ball tells me that prices will rise in 2010 but probably not as much as they did in 2009.  Christmas with Gillian, Katie (15), Charlotte (6) and Joshua (4) was spent with Grandma in Thames before we embarked on our most ambitious family holiday yet – the details of which will be revealed in my 2010 yearly review. 

I really enjoy helping people to buy and sell properties.  If you need my advice or services in 2010 I’d love to hear from you.  Remember I can also help your friends and family outside my area by putting them in touch with a proven professional from within my established personal network.

Here are some thoughts for a successful 2010:  

“Success is reached by being active, awake, ahead of the crowd, by aiming high, pushing ahead, honestly, diligently, patiently: by climbing, digging, saving; by forgetting the past, using the present, trusting in the future; by having a purpose, fainting not, determining to win, and striving to the end”

If you knew you could not fail, what one thing would you dare to improve or change that would raise the public’s perception of the real estate industry as a whole?