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Private sales save you thousands!

Private sales save you thousands!

Private sales save you thousands

Private sales are fantastic.  They can save you tens of thousands of dollars….if you are a buyer.

I was recently contacted by a friend who wanted some advice on the best way to go about purchasing a house which was being sold privately. ‘Excellent,’ I said. This is the very best way to purchase a house. Buying privately allows you to have maximum control over the process and will generally end up saving you a huge amount of money on the purchase price.  After following my suggestions, my friend picked up a fantastic home in a popular Wellington suburb for $50,000 less than what they were prepared to pay. This literally saved her thousands.

So why do private sales save you money? A lot of it comes down to the mind-set of the owner. Most people who attempt to sell their homes privately are driven by a mind-set of savings not results. They place little to no value on the influence a good agent can have over the end sale price. They instead believe, a bit like the good old Kiwi DIY’ers, that they’ll be right.

Reasons why private sellers can get it wrong:

1. Because good quality photography entices buyers. Hence the existence of businesses such as Open2View. Dark rooms, pictures of toilets and shady entrances do not entice people through the door. No people = no sale.

2. The shop keeper approach. Buyers want to come and go as they please. They do not want to be tailed by emotionally attached owners keen to sell the benefits of every aspect of the property. Making buyers feel awkward hastens them out the door.

3. Private sellers allow themselves to form personal relationships with potential buyers, ignoring other parties so as not to offend. Not so in the case of agents who are acutely aware that two parties = competition which ultimately drives the end sale price.

4. Experienced buyers target private sellers looking to control the process and make savings. Anyone seen the 0800 we buy houses signs? That’s them.

5. A requirement of most banks for mortgages on private sales is that finance is subject to valuation. The savvy buyer will employ conservative valuers to come up with low level market values. This can lead to contract renegotiations and reduced sale prices.

6. Lastly, buyers will often look to make additional savings by asking the owner to reduce the price as they aren’t paying a commission. That doesn’t happen on the open market.

So while I too have heard rumour of successful private sales, in reality they have a very poor success rate. By the time they have languished on the market and end up in the hands of an agent, the damage has long been done.

Read more about the pros and cons of private sales here.

Lack of stock drives clearance and prices

Wellington is running dry on listings and over the last four weeks we have seen strong interest in properties. Many of our listings have received multiple offers and this has led to a lift in prices.  It appears that there are more buyers than sellers in the market, which is tipping it in favour of the owner.

Wellington property sales stats

May 2014May 2015
Northern Wellington$551,000$480,000
Western Wellington$560,000$575,000
Southern Wellington$540,000$550,000
Eastern Wellington$588,000$550,000
Central Wellington$412,500$405,550

Average number of days on the market: 32.8

Super 15 fun facts

  • Super Rugby started in 1996 as the Super 12 featuring twelve regional teams from NZ, Australia and South Africa.
  • The highest score in a super rugby game was 96 points to 19 when the Crusaders defeated the Warratahs in 2002.
  • The Canterbury Crusaders are the most victorious team with seven wins out of a total of 19 seasons. The next closest team is a distant second on three wins. That award goes to the Auckland Blues, although they have been unsuccessful since 2003.
  • The Hurricanes have never won the Super Rugby title, but that is all due to change this week – Go the Canes!

If you or anyone you know could value from some free and professional property advice, please do not hesitate to call.

 

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