Monthly Archives: November 2009

Nelson echos National Trend in Building Consents uptick

Statistics NZ today issued their “Building Consents Issued: October 2009” report, and it shows that in many parts of NZ, the confidence to buy a section and build a new dwelling is starting to return to the market.

Nelson was not doing anything out of the ordinary sticking to its nominal percentage as the 23 consents approved equaled 1.7% of the national number of 1,321 new dwellings authorized. (these figures exclude apartment figures for which there were an additional 103 consents approved nationwide in Oct)

As reported in last months Nelson Property Report we had, at 27, the highest number of settled section sales in over a year or more.

So it was only to be expected that the consent number was going to pick up soon after as folk take advantage quickly of locking in those lower interest rates.

I also happen to think the early bird catches the worm here too with times on the horizon looking busier than they have for quite some time in the residential building sector. Locking in a builder now means costs are known and also hopefully protects you in case the long predicted (well its starting already) jump in activity across the ditch see’s builders / tradespeople hopping on a flight to chase the “big bucks.”

Expectations in Real Estate Advertising

A Pavlova is one of a Kiwi’s favourite things remembered from Summers past.

However ask the person who cooked it ….. “did it turn out exactly like the photo in the recipe book?”

Kiwis and Aussies will know the answer without thinking.

PHOTO CREDIT – Wikipedia

And did the fact that it didn’t turn out like the one in the photo………did that make it taste any different?

I’d have to say Real Estate advertising is different.

Real Estate licensees/agents are constantly challenged to correctly illustrate a property to someone who has not yet seen it, or who might not even be familiar with the town the residence is in.

To that end photography matters most, then advertising copy in the form of a description follow, and needs to be related, relevant and accurate to the photography.

Forrest said “Life is like a box of chocolates……” and in many cases Real Estate photography / descriptive copy is similar.

Yes it did say three bedrooms, but it didn’t mention, 1 was double, 1 was small, and 1 was tiny. Three bedrooms perhaps, but the overall expectation was a letdown in reality.

I’m sure you’ve heard many examples from friends or family who have seen/read something relating to property, then when they have made the trip out to the Open Home……..have experienced a similar “letdown.”

In some ways for an agent it’s like walking on thin ice, but they have to get it right.

On the one hand an agent needs to ensure that their client is happy, if not ecstatic with the advertising copy and photos. Even then you’ll still find some suggesting to you…. “but you could fit a ….in there” or wouldn’t that be a better angle…..or you missed “such & such” out. Likewise I am sure most everyone in the industry has had the “but it’s really only a study, I can’t call it a bedroom” conversation at some time in their career.

And on the other hand, buyers are looking for even more increased accuracy in Real Estate advertising, calling for more accurate well lit photography and better (read more accurate) descriptive text.

A Real Estate purchaser today has already been primed to have preconceived perceptions of advertised properties. These are gained from vivid past media reports, or experiences of family and friends.

For example if your saw the word “seaviews” in an advert, what immediately springs to mind? There you go. Based on past experience, you were more than likely thinking …..…Yeah right……..see-views or glimpses of the sea.

So, more than ever, today buyers really want to arrive at an advertised property and think/say………

…….wow this is better than I expected………..OR

…….while viewing at the Open Home ………”this is neat – didn’t look this good in the add / didn’t say anything about this in the add” ……………OR

……this does have a lot extra than other homes in this price range, etc, etc.

Reminds me of movie trailers on most DVD’s – after watching them you’ve probably seen all the best parts. Then in many cases the actual movie doesn’t live up to the trailer’s previews?

I believe that in advertising a property you need to hold back a surprise. And don’t forget, holding back could be conducted via the photography too. It’ll require a forward thinking view from the client as well.

The amount of money Real Estate marketers spend was brought home a this week with a glance at the above Adify chart, indicating CPM’s^^.  Real Estate spending was one of the few standouts in an otherwise “reduced spending” environment. The chart above, more here at Adifys site, shows Real Estate as the dark blue line depicting increased spending this year, going from $2.38 in Q1 to $7.62 in Q3.

In a related subject post over at the Unconditional blog, the question was being asked about how much spending is too much when it comes to the number of websites a property should be listed on. You can read my comment on that post.

^^ CPM is advertising speak for Cost per Thousand impressions

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Real Estate Appraisals taking a bit longer?

I’ve been talking with some agents this week about the new ACT and how it has effected their workflow, if any……….since it came into operation, last Tuesday.

Some have stated it has added quite some time/content to their listing presentations, and some have suggested even more to their prep workflow……most specifically at the appraisal stage.

I’m actually surprised to hear this.

Why?

Well mainly on account of, that to me, it obviously indicates a difference in timeframes when compared to that which used to be dedicated to the same task, a very important part of the whole Real Estate selling process.

In reality nothing should have changed, it should not have been any different than prior to to the 2008 ACT coming into operation. It still takes me at least 3-4 hours for a full appraisal, nothings changed there. I’ve explained a couple of times before what I do…………so won’t go over it again here.

So I sit here this evening, and ask the question why?

Why has it added extra time to an appraisal?

Other than extrapolating your agencies “Client Communications Procedure” (or REAA’s equivalent), handing out the correct REAA booklet, and a couple of questions re any known faults with the property, or any knowledge of a leaky home, and an extra 20 seconds to get the owners signature, then not a lot has changed.

Fines – if you do something wrong / unprofessional / inappropriate ~ well yes they have changed, and about time.

And re the commission estimate you need to provide in writing on the Agency Agreement sheet, you would have already had that jotted down somewhere, or in your head anyway…….so that’s not going to add any undue extra time either………..because you already are aware that buyers are always keen to know what their Nett $ will be.

A quick note on leaky homes is due here……….don’t forget that even in cases where the owner states NO to the leaky home question, or any acknowledgment that the property could be vulnerable, you must show (& I suspect, be able to conclusively prove so) due diligence…..in regards to disclosure to customers.

Huh?

If it can be argued (and unfortunately that could be lucky you in a court situation helping to establish some case law here**) that you, in your capacity as a Real Estate Professional………along with your many years of knowledge/experience should have had your radar “blipping”, when you noted it was a 90’s home, and evidenced a couple of suspicious signs, or had prior knowledge that neighborhood homes built the same way, in the same year were leaky ………..then you may be called upon later, to be able to show where you clearly demonstrated that you were 100% clear in your duty of care.

As Steve Koerber has said many times before, you will need to have advised (and possibly have proof of that) any potential purchasers that you would recommend they get an independent 3rd party to check the property out first. (or at the very least, have it as a condition of sale)

Its actually a bit disappointing that there seems to be a distinct lack of details on the REAA site that talks about such obligations on customers to disclose such relevant info to licensees.

I’m curious about the extra timeframes some have mentioned, because to my way of business the new ACT has added no extra time to my appraisals, and just a short amount of time, say 5-10minutes to my listing presentations.

** – sooner or later this will happen and examples will surely be made. After all what lawyer doesn’t want his name to be mentioned in future textbooks.

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Boomers – Top 5 Value Add ons for your New build Home – PartII

A while back I mentioned Tip 1 and Tip 2, here’s the follow on……

Tip 3

Home Access

Most homes today have a laundry.

a] in most of today’s contemporary homes, the laundry has been located in the garage, and in most cases there is usually an outside access / entry door nearby.

b] in homes of the 70’s through 90’s many had a separate outside access door directly from the laundry which was housed separately near the kitchen area

c] and in much older homes the laundry was accessed via the porch with laundry one side and entry to the kitchen on another. (Many of these older homes have since been renovated and this may not be the case now)

However in most circumstances these doorways and access ways (ramps) are not “wheelchair” friendly, both in there “drive-through” (most are currently “drive over” like a speed hump) access and also in their “access” doorway width. In many cases a portable double sided mini – ramp will do, just make sure to double check that doorway width.

Thought needs to be devoted to all doorways / hallways / internal doors – right down to asking your building professional about allocating enough space re turning angles in bathrooms, kitchens and bedrooms…..and that may, if you aren’t going open-plan, follow through to angles from kitchen – dining – to – lounge – then to associated hallways / indoor~outdoor flow locations.

While you’re at it you will most definitely need to ensure access is easy….and I mean at least wheelchair wise to the bedrooms from the hallway.

For a standard spec build master bedroom ensure you calculate enough space either side of your desired bed for easy access.

Even I recognise that one day I may not be as mobile as I am now.

Here’s a tip?

Got friends or family in Sydney, Melb, Adelaide, Perth or Bris……….then next trip make sure you book a couple hours out to view the latest local show-home / exhibition /display home location.

You will be surprised at what you can learn from our friends across the ditch.

I’m thinking 1220mm hallways with at least 915mm door openings here. If you are looking at a new build, then to really maximise later resale opportunities you need to study these considerations.

Yes you’ve worked out your builder was right to suggest you went with a wet shower, that’s simply a good bet for the future ……….. “just in case” …………. and the bath………..well the spa outside will cover that, and yes of course the hallways will be built wider to aid if the mobility subject was to become a concerning topic …….but did you consider the angle required to turn a wheelchair in transiting from the bathroom to the hallway………..and lets not forget the WC.

It follows that if you are incorporating a separate WC, make it extra wide, and include a small handbasin arrangement in there too.

These extra wide hallways will make your home stand out later too, when a new buyer will comment “your home just seems so much bigger than the other 2 I’ve just seen.”

Consider a worst case scenario, if you are faced with having to move earlier than expected ……..in the case of something unexpected happening and perhaps having an outcome where one partner is not as mobile as before……then consider these access questions…….

1] would your current residence, built only 1-2 yrs ago, really cope……….

2] would it cost more to upgrade than to sell and buy a new build……

3] would the fact that you spent that extra 5-10% on access related items when you built …………….now mean you can stay together…….

…………….for me there is simply only one choice……

………3] is the only way to go.

So by taking consideration of these steps at the build stage, you could maximise the possibilities that an effected person may still be able to remain in the residence………..maintain a current lifestyle just a bit longer………….rather than forcing a sale because of dwelling unsuitability or having to engage in costly major renovations.

Candidly, over the last 2-3 years, for many couples I’ve dealt with ~ its been the prerogative of the male to ensure his partner has been happy with the whole downsizing thing. (hey that’s just how life used to be in what would seem, to 30 somethings today, “another time/another world”)

Sideboard in the dining room ~ gone! ………… massive rimu dresser in the master ~ gone! …………..china cabinet ~ gone! …………..200 book bookshelf in the hallway ~ gone! ………………Entertainment credenza ~ gone!……….but you know what……….after all this I think the thing that I have witnessed causing the most consternation/stress, was the act of downsizing the garage and/or loss of the workshop space.

Once one retires, there’s lots to busy one self with in “the shed” and I am sad to report here and now that I have seen too many folk over the last few years experience a downhill trajectory / lose that “spark” once they lose these former so called “home/creature comforts.”

Is this not in itself enough to seriously evaluate your options when planning that downsizing to a new smaller home?

Tip 4 & 5 of the Top 5 Values are coming………

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Leaky Homes – Best Explanation seen

Courtesy of a link posted at realestate.co.nz’s forums**, I was directed to a blog post by Peter Cresswell.

In a post titled – LEAKY HOMES, Part 2: What’s going on inside your walls? he writes what I think is one of the most understandable articles on the subject I have seen. As Peter is an Auckland architect, he would most certainly be aware of his topic.

His article is peppered with technical explanations which assists greatly for anyone unassociated or unfamiliar with the building trades. Peter concludes with what I believe are some justifiable pointing fingers.

In commenting on the Governments offer to pay 10% of a claim,  a poster from the “Solving NZ’s leaky home disaster” thread on realestate.co.nz forums posted the following thought…..

If the government pay out 10% of the total then they will get back 12.5% GST on all the extra activity created by the reclads – so in effect they make 2.5% on the way through. Good one John Key!

Makes you wonder?

With the new 2008 ACT firmly in place, I suggest its well worth a read to come up to speed on this important topic.

In related news from another part of the world read here about the Chinese drywall situation in the States, I also briefly touch on the situation with BATTS in Australia.

There’s also some good links to info over at Steve Koerbers site here, as well as his opinions on how to fix it here.

** – where I believe members of the public, as well as real estate licensees (real estate agents) can join up to have discussions on many real estate related topics

UPDATE ON CHINESE DRYWALL

24th Nov – go here.

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