Selling property in Wellington
For any property questions talk to Ben Stevens and the team
1. How much does it cost to sell my home?
The upfront costs to sell your home are those associated with photography, advertising and, where recommended, reports specific to your property i.e building report and LIM. We always recommend the most cost effective ways to advertise your home without compromising the sales result. Houses are generally sold on a commission basis but the service is free so you pay no commission unless your house sells. When discussing commission rates with real estate agents, you will probably come across two approaches.
- A fixed fee regardless of sales price.
- A commission quoted as a percentage of the successful result.
Every seller would prefer to pay a low commission rate but beware, all agents are not equal. The ability of different agents can vary as much as the results. Make sure the agent you list with has the right qualifications and experience to ensure a great result for your home.
2. How much will my property sell for?
No two properties are the same. Potential buyers will make an offer based on their knowledge of comparable sales and the emotional value they place on your home. Regardless of what the buyer wants, you have the final say.
As an owner it is very important to arm yourself with the best information available so that from the outset you can make confident and informed decisions. Choosing a real estate agent with a solid understanding of the Wellington real estate market and the experience to provide a considered market appraisal will make this part easy. The appraisal should include an estimated sales range based on comparable sales in the area and take into account the current status of the Wellington property market.
3. How can I get the best price for my house?
As with any product, it is to your advantage to present your home as best you can for sale. When considering where to spend money you should keep your target market in mind and what would appeal to them. For example, if you are targeting families and have the ability to stage your home with a second living space or usable outdoor space, these would be excellent places to invest a bit of time or money. If your property is more suited to a double income couple, an office will generally hold more appeal than a third bedroom. The more buyers you can appeal to, the more people will visit your home. Staging a property to ensure those people form an emotional attachment to your home, and subsequently make an offer, is the final step of the process. The more parties offering on your property, the more likely you are to achieve a result in excess of the property’s market value.
When investing any money it is important to see a positive return and some spends will be more worthwhile than others. If you are unsure about your target market or where to invest, we are happy to help. Amanda, our home staging specialist, offers great tips and hands on assistance to prepare your home for sale.
4. What is the best way to sell my home?
All methods of sale work. Some sales methods will work better for your property than others. Selecting the right method of sale for your home is dependent on three things;
- The current state of the local property market. As Wellington is a city made up of public servants, consultants and educators, the government can have a large impact on the employment numbers. Confidence in these sectors is directly reflected in property demand and vice versa. Some methods, such as Auction or Tender, will be more effective in a market with high demand for property. In more balanced and slower markets it would be best to consider using methods which give buyers an indication of price. This could be in the form of a buyer enquiry level (BEO), RV if relevant, or fixed price.
- The style of property, be it a standalone home, townhouse or apartment. For example, a standalone home will attract more interest than a two bedroom apartment. ‘No price’ marketing methods such as ‘Tender’ or ‘Auction’ will attract buyers and encourage them to place their own value on the property. This is the opposite of apartment buyers who tend to shop with price in mind purely because of the oversupply or similar properties to choose from. Marketing an apartment with no price guideline would likely limit the number of parties viewing, and subsequently offering, on the property.
- The target market for your home. Using the right sales and advertising methods to attract your target market is essential. For example, first home buyers tend to search for property online and register to receive alerts on properties meeting their criteria. They will shy away from competitive situations such as auction and place a lot of value in having building and LIM reports provided. High value properties will attract experienced home buyers who will search via online and print media channels. These buyers are savvy and more inclined to seek their own professional advice. For the right property, methods of sale which put buyers in competition with each other such as tender and auction, can produce excellent results.
Many agents have a preference for one method over another. We, however, believe it is important to choose the sales method best suited to your home and to have a backup sales plan in place.
5. How long will it take to sell my house?
As no two properties are the same it is very hard to give an exact time frame for the sale of your home. The Real Estate Industry of New Zealand (REINZ) publishes statistics for ‘average days on the market’ but these do not differentiate one style of property from another so are likely to be skewed by apartment timeframes etc.
To help limit your time on the market it is important to choose the right sale method and target the right buyers for your property. Being prepared, deciding on a backup plan and knowing the best stage to implement this to maintain interest in your property is as important as the initial launch. This should be done in consultation with your real estate agent and as a result of market feedback. We provide a weekly written report which includes buyers’ feedback post open home. Being informed during the process makes the decisions you need to make as a vendor much easier.
6. When is the best time to sell my house?
The price of an ice cream doesn’t change much over the course of the year but hot weather makes ice cream more appealing and this is when demand is at its highest. The same rings true for property. Demand for your property will be highest when it is at its most appealing.
Buyers are looking for properties at all times of the year so if your property is warm and gets good winter sun, why not market it at a time when there is less competition? Alternately you might have a well-established garden that flourishes in spring so this will be the best time to market your home. Whatever the season, take the time to present your house well to maximise interest and achieve the best possible price.
7. How do I choose the best real estate agent to sell my house?
When you are making the decision on the best agent to represent your property, do your homework. The most influential factor in the sale of your home is the person greeting the buyers at your door. To find the best agent for you;
- Ask your family and friends who they used and what they thought of the experience. You will quickly get an honest picture of how well an agent actually performs.
- Research agents online. Review their website, follow their social media or visit one of their open homes. Is their advertising filled with spelling and grammatical errors? Were they engaging well with buyers at the property? Did they follow you up after the open home?
- Invite your selected agents to submit a proposal to sell your home. When you met, did they make the meeting about your needs and your property or all about them? What ideas did they have for the marketing of your home? Did they seem honest and likely to show enthusiasm for your property even if it were to sit on the market? Who, regardless of the commission rate, did you honestly believe was the right agent to sell your home.
- Check client testimonials. These will generally reflect the personality and priorities of the agent. Make sure that those same priorities are a good fit for you.
8. What do I need to know about Anti-Money Laundering?
To prevent money laundering and terrorism financing in New Zealand, the Government introduced the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act.
This action required ‘Phase 1’ businesses, such as banks, casinos and financial service providers, to comply with new regulations from 2013 onwards. In 2017, the AML/CFT entered ‘Phase 2’ in a greater attempt to restrict the flow of laundered money.
Last year – beginning in July – lawyers, conveyancers and businesses providing trust and company services were required to comply with the AML/CFT Act, with accountants seeing similar requirements in October 2018.
- Why does my real estate agent need to comply with the AML/CFT Act?
To prevent money laundering and fraud, real estate has been a popular way to launder money made from illegal activities into legitimate assets or ‘clean’ money. Real estate agents complying with the AML/CFT Act will offer an initial deterrent for criminals and provide a greater level of scrutiny for transactions that may otherwise go undetected.
- If I want to sell my house what are my requirements for AML?
There’s a lot of information online for professionals looking to understand their requirements. There’s not the same level of information online for the people wishing to sell their home. Real estate agencies are now required to designate a specific AML/CFT compliance officer and maintain high standards for detecting potential money laundering activity. If you’re unsure of the AML/CFT requirements, ask your real estate agent to explain the process to you.
- Our advice for buying and selling real estate within the AML/CFT Act
Each company would have developed their own set of processes in order to meet their compliance requirements. For the everyday individual, selling a property and complying with the act is a relatively painless process requiring little more than the verification of two forms of ID and proof of address.
For those who own a property in a company or a trust, the compliance is slightly more involved, but not impossible. To reduce any potential stress for yourself and other parties involved, it would be best to notify your real estate agent in plenty of time to allow you to collect and verify all relevant documentation, and have the paperwork approved by the compliance officer. Once submitted for consideration this can take up to ten working days. This probably seems excessive and we anticipate this process will become more efficient as the market becomes more familiar with the requirements.
- Are all the new requirements really necessary?
While the new compliance measures are enough to induce a ‘we don’t have a problem with money laundering’ eye roll, the evidence states otherwise with a reported $1.35 billion dollars being laundered annually.
The good news is that we’ve been preparing for this for quite some time, and the Department of Internal Affairs has provided great assistance in ensuring all real estate agents across New Zealand are ready to comply with the changes this year.
The good news is that for good people we should see: better houses, better prices, better processes, and a better New Zealand housing market.