Real Estate agents are being quite restrained in reporting the fact that there is “softness” in the auction clearance rate. The truth is the nation’s capital city auction clearance rate fell to 46.2 per cent last week from 48.6 the week before. This time last year the national auction clearance rate was 60.6 per cent, which is 14.4 per cent less.
While an auction does give the vendor a marketing campaign that results in an unconditional sale over a set time frame, the reality is whether the house is marketed by auction or private treaty, buyers can’t afford to put their homes on the market looking half-baked. It is a buyer’s paradise out there. They have so much choice and if a home doesn’t grab their attention, they will just shrug their shoulders and keep walking.
RPData have just released an article Premium Housing Markets Plundered where they have reported that many of the higher priced capital city regions have recorded a significant decline in median house prices whereas the more affordable markets are recording better housing market conditions.
The truth is, it doesn’t matter which end of the market your house sits in, low medium or high. If the vendor fails to
- Present it to its best potential
- Price it realistically according to the current prevailing market (declining)
- Use a professional Real Estate agent who is prepared to go the extra yard in marketing and negotiating
then vendors need to be prepared to have their house sit on the market for months on end with no offers and risk losing thousands of dollars in the process.
Despite the gloomy outlook I’m pleased to report that my clients are still getting great results. I recently worked with a vendor whose 6-bedroom home needed a few finishing touches before going to market. He had already engaged an agent who decided to conduct a 4 week auction campaign. After assessing the property and making a few maintenance and upgrade recommendations, my client heeded my advice about giving the buyers what they want, and delayed putting the house on the market for a couple of weeks. In that time he
- Revamped an ugly bathroom
- Painted the rear of the home
- Installed some new exterior screen doors
- Installed some new plants and garden mulch in both the front and rear garden
- Patched and painted two of the bedrooms
- Removed some ugly lace curtains
- Tidied up the back garden
- Dressed up the front entrance with a welcome mat and potted plants
- Pressure cleaned the pavers and concrete driveways around the house
- Finished the house off with furniture and accessories styling from one of my team to enhance his existing pieces
My client was well rewarded for his efforts.
I was there to watch the auction and inspected the house along with the large number of attendees who showed up on the day. The house looked stunning and had a great atmosphere. One lady commented to me during the walk through “the house has been beautifully maintained”. There were 9 registered bidders at the auction, an amazing turnout considering the above statistics. Although the auction was a bit slow to get moving, in the end there were 3 keen bidders and the house sold for $664,000. $14,000 above the advertised price!
The property was featured in the real estate section of The Advertiser on June 11, 2011 as one of the Top 5 Auctions in Adelaide for the weekend.
It is possible to do well in this market. Just give the buyers what they want!
Charyn Youngson
Professional Home Stager | Property Renovator | Author
Glenn has just conducted a secret shopper exercise by visiting 102 open houses in Australia and speaking to buyers. The No 1 Feedback from prospective buyers was not enough follow up and not enough feedback from selling agents. A staggering 72 agents out of the 102 agents DID NOT follow up at all. Zip, Zilch, Zippo! Both Glenn and Kevin expressed how unbelievably bad the results were and god forbid Kevin and Glenn mentioned two big L words. Lying and Lazy when talking about these type of agents who fail to follow up with potential buyers (and therefore potential sellers). How do you think vendors will feel when they find out that these Lazy, Lying agents fail to ring these potential buyers to see if they are interested in putting in an offer while their homes sit languishing on the market dropping thousands of dollars every week? Not happy, Jan!
I love that song from the Michael Douglas and Kathleen Turner movie, Romancing the Stone, “When the going gets tough, the tough get going”. It seems that for real estate agents the opposite is their mantra. This is to be evidenced by this recent article in the Financial Review, on June 3, 2011 Going, going, 10,000 estate agents gone!
Ben Hurley and Ruth Liew reported that ten thousand agents, about one in six, have abandoned the profession in the past year as low sales volumes and falling commissions wipe out their profits.
Frankly, I’m not surprised by these results at all. In the boom years all real estate agents had to do was show up and the house sold. Somehow their inflated egos let them believe they were super salespeople. The reality is a monkey could have been standing in the doorway of those homes in a booming market and got the same results! Houses actually sell themselves. The real estate agent just facilitates the sale with marketing and then assists the buyer fill out a contract. Oh I forgot, they do have to work hard at negotiating the best deal for the vendor. But do they? Maybe not. I found this tip in the real estate section of The Weekend Australian June 18, 2011, from Monique Sasson Wakelin, Managing Director of Buyers Advocate Wakelin Property Advisory
“The growth in properties sold privately or before or after auction means more vendors and buyers are negotiating. It’s not a skill you pick up overnight, so study it intensely beforehand or delegate the job to a professional”
No kidding! Now that we have a slow market, the great divide between a professional and not so professional Real Estate Agent has never been more evident, according to one of their own agents. Agents have to actually get off their butts and do some work to get a listing and sell a house but what are they doing? Are they working harder and smarter for their vendors? No they are sitting back and whinging about how the market is so bad instead of actually getting off their derrieres and bothering to call buyers back, or advise vendors on the best way to present their homes.
I have been canvasing real estate agents for years about how I can work with them to maximise the profit and speed up the sale on any home using my home staging and home makeover techniques. I get fantastic results with my clients after they improve their presentation and I have proven statistics to back up my claims. I have lost count of the times I have shown my beautiful PowerPoint presentation with amazing before and after house transformations to teams of sales agents. They nod their heads enthusiastically and agree that my methods and great presentation really works and I sit back and wait for them to call me.
How many agents do you think bother to call me back to use my services? Zip, Zilch, Zippo! After years of being in business, I only work with a very small number of professional hard working agents. Although it would seem logical for me to be working hand in hand with real estate agents to give sellers a competitive edge, my study confirms the results of Glenn Twiddle’s Secret Shopper Survey. The majority of agents are Missing in Action.
Charyn Youngson
Professional Home Stager | Property Renovator | Author
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The recent RP Data – Rismark Home Value Index Release landed in my inbox this week and the news for homeowners around the country wishing to sell their homes in 2011 is not great.
Capital city (-0.2 per cent) and ‘rest of state’ (-0.1 per cent) home values both fell in seasonally-adjusted terms in November. In raw terms, the declines were larger (-0.6 per cent and -0.8 per cent, respectively). RP Data & Rismark expect further weakness in 2011 as rates rise.
Christopher Joye, Rismark’s managing director, stated “We believe that there is a risk of at least three cash rate increases in 2011”, in which case he predicts there will be little-to-no nominal dwelling price growth over 2011, with a chance of small nominal declines.
What is happening in today’s real estate market?
A slow real estate market is called a “buyer’s market” because there are lots of homes for sale and fewer buyers fighting for them. With a glut of houses on the real estate market pushing prices downward, buyers have more power in any negotiation. They know the seller needs to sell their house more than they need to buy it. The perceived pressure to make a quick buying decision is gone and buyers have higher expectations than ever before. They demand value for money and will walk away if a property fails to impress. Houses that don’t appeal are left languishing on the market dropping in value with each passing week that they sit there.
How can sellers improve their bottom line?
Home staging right now is more important than ever because of this shift in the balance of power from sellers to buyers. With house prices trending down, it means home sellers have a greater need for home staging services to preserve their equity and help them make a faster sale. The current statistics for average days on the market is 120 days or longer – that’s 4 months! What is it worth to you to sell your home fast and to achieve the best possible price?
I am happy to report that even in this downward market, my clients have been achieving great results. Some are still selling on the first open which is the absolute perfect time to get your highest offer when buyers are first exposed to the property and there is the highest level of interest. If you are contemplating selling your home any time soon then take my expert advice.
Charyn’s Top 3 tips for Selling in a Buyer’s Market
- Be realistic about price – face up to reality and accept that if the market has dropped in your area, you will have to lower your expectations. Do your research and compare similar house sales in your suburb. Go out to open inspections and get a feel for what buyers are looking for. Make mental notes of the best things that appealed to you and see how you could improve your home in a similar way. Listen to what buyers are saying at open inspections – you will be surprised at the things that they don’t like and won’t compromise on.
- Change your mindset about spending money on a pre sale makeover – There is a big difference between something that “costs” you money – you understand the money has gone and that’s that. But when you make an “investment”, you plan to see a return on your money. Home Staging is an investment in your single largest financial asset.
- Put in 100% effort. It may sound like a no brainer, but unfortunately not all of my client’s fully embrace the recommendations that I make to prepare their home for sale. Some only put in 50% effort and therefore they end up with 50% result. This is your largest asset. Get off your rear end, put in the hard yards and you will receive the best possible outcome. Remember like all things in life – you only get out what you put in!
Happy Selling
Charyn Youngson
Professional Home Stager, Property Renovator, Mentor, Speaker
Author of Sold for Top Dollar.
What will it take to sell my property? That is the burning question on home seller’s this lips this silly season. But are they willing to listen to the answer and take appropriate action. In my experience home sellers are their own worst enemy and they sabotage the sale of their properties by failing to meet the buyer’s needs.
It is a buyers market out there people! This is the toughest Real Estate market experienced in years with a record amount of homes on the market and these homes are staying n the market for an average of 120 days or more. That’s 4 months of week in, week out stress of keeping their house in open inspection mode for the average home owner.
Buyers have a virtual smorgasbord of homes to choose from and if they don’t like what they see they will just keep on looking until they find that elusive dream home. If a house doesn’t measure up to their high expectations, buyers aren’t even putting in low offers. Homes that fail to impress, are getting no offers!
Home sellers are not responding to market conditions. They believe they can just whack their home on the market “as is” with minimal effort and expect to get their asking price. They are delusional – no buyer in their right mind is going to pay top dollar for a home that has poor presentation and no wow factor. Buyers have all the power and they are not going to part with their hard earned cash in these economic times for any old house. They are seeking perfection. They are not buying a house they are trading up to a new lifestyle and if a house isn’t presented to them in a “move in” ready state with nothing to do but unpack their bags then home sellers have no hope of getting a favourable deal anytime soon.
So when a new client asks me “What will it take for me to sell my property?” I give them the hard cold truth – give the buyers what they want. Walk out of your home, put on your buyer’s glasses and look at your home through their eyes. Invest some time, effort and dollars in presenting your house like a show home because that is the only way to you are going to get sale in this heavily weighted buyer’s market. Show them the lifestyle!!