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Should I sell ‘Off Market?’
Is it a good time to buy Real Estate?
What is happening to the Real Estate Market
How has the ‘Statement of Information” impacted the market?
Top 10 Real Estate Agents on the Mornington Peninsula
Top 5 key components in choosing the right agent
Step by step to selling my home?
Selling ‘Off Market’ means selling with no advertising or market presence. Selling ‘Off Market’ can seem appealing with no money spent on advertising and minimal disruptions to family life. However, the appealing nature of ‘Off Market’ selling could cost you thousands in the long run.
Picture this. A property in Mount Martha was appraised by two other local agents between $1.4-$1.5m. I was more
optimistic and valued the property between $1.5-$1.6m. Before placing the property on the market, I asked the
vendors if I could bring one of my investors through. I felt the home would perfectly suit their needs.
After inspecting, my investors bought the home for $1,615,000 - a great result! I was proud and the vendors were
Sadly, after one week, my investors were unable to secure finance and the deal fell through. We were all devastated.
It meant we needed to prepare the home for sale including styling, photography, marketing and advertising. We
had no guarantee the prior offer could be duplicated.
Fast forward to the first open for inspection. The electronic property gates were closed. Crowds began to gather out
the front of the gate. Momentum was building and the house was not even open yet. It was like the Myer Stocktake
Sale! By the time the gates opened, there were more than 100 people coming to inspect the home.
The next day, I received 6 offers ranging from $1.55-$1.85m. In the end, the owners sold for $170K MORE than the
offer they accepted off market.
This taught me the biggest lesson in my whole career.
The only real winners in an off market sale are the buyers,
5 REASONS WHY NOW IS A GOOD TIME TO BUY REAL ESTATE
Of all the reasons to buy real estate (first home, up-sizing/downsizing, investor, relocating, lifestyle), with the exception of builders/developers, most of these purchasers would be made with a long-term view in mind.
The market will average out over time. if you are looking to buy with a plan on staying for 10+ years, the current state of the market should not bear an impact on your decision
Boom time = Boom prices. Buying out of boom time usually means better value for money
Less competition means you are more likely to pay a fair price for a property
Properties in highly sought after locations will ALWAYS be in demand regardless of current market conditions
The Mornington Peninsula is a really special place to live and invest.
The final point is very significant to us who reside on the Mornington Peninsula.
The Peninsula is special. We have buyers from overseas, interstate and also inner Melbournians looking to enjoy a safe and healthy environment to live. We have a huge migrating society due to the attractive lifestyle offerings, therefore we experience a more insulated real estate market here.
On a personal level, I first moved to Mt Martha from Ascot Vale in 2002. My children were young at the time. Now as adults, my children often comment how they would not live anywhere else. We paid $550K, which at the time was $30K too much. The same property now is valued between $1.5-$1.8M.
Remember, long-term purchases are not affected by the real estate market conditions. Now is a great time to buy.
2018 proved to be a challenging year for many of us in real estate. Having been in this industry for over 32 years, I can honestly say that I have seen this before. The market has tightened for several reasons. For example;
Tighter lending from financial institutions
The decrease number of investors due to this lending restriction
The Statement of Information introduced 18 months ago by Consumer Affairs to eliminate ‘under quoting’
Media (negative news)
5 CRUCIAL STEPS TO SELF GUARD YOURSELF WHEN SELLING
1. Choose EXPERIENCE over Real Estate Brand name or Company. This is vital now. You need someone who is not intimidated and can negotiate hard for you. Don’t take this for granted. Negotiating is a skill and it’s finessed over time.
2. PRICE YOUR PROPERTY ACCURATELY. If you don’t need to sell, then don’t sell, but if you need to, you need to be competitive with other offerings on the market. This is more important than ever before.
3. CHOOSE THE RIGHT SELLING METHOD. Changed circumstances in the market require Agents to re-think the selling strategy. With auction clearance rates at the end of last year well below 45% we would expect longer selling periods, therefore an auction, with such a tight restraint on time, may not necessarily be the right choice. It is important you discuss this with your real estate professional and develop a selling strategy that is best suited to your type of home, the circumstances of the sale and the current market conditions.
4. INVEST MORE IN YOUR MARKETING. Marketing now is more important than before. You need your property to stand out and the only way you can do this is by making it shine on the Internet, local papers, board, brochures etc…. Allow for a longer selling period so that you spread the money accordingly. Aim to go big in the first 4 weeks and then thin it out if still for sale beyond this point.
5. INVEST IN STYLING/PRESENTATION. Now more than ever before, it is crucial to invest in styling and
presentation. Give your buyers no excuse to not buy your home. Make it so appealing that you give them no
choice to inquire, inspect and buy. This will help your home stand out on the Internet and other marketing
you may do and increase buyer inquiry. More heads you have through your home, the higher the percentage
of a successful outcome.
18 months ago, a new legislation was introduced that requires all real estate agents to provide prospective buyers with a ‘Statement of Information’. This was meant to give buyers a transparent view to the value of the property being sold in relation to the quote range provided. It came about because some unruly agents were quoting too low and frustrating the buying community. Hypothetically, a seller was wanting $1,000,000 for their property and the agent would quote $750,000 plus. Buyers were also out of pocket with Building and Pest Inspections, because the property would sell for $1,050,000 and they were never in the running.
The Statement of Information was introduced to rule out this practice, but 18 months later, what is evident is the same ‘unruly’ agents are finding loop holes and mucking up the market place once again. Now it’s even worse than before, because not only buyers are affected but sellers and ethical agents.
Let me explain:
Some agents are still finding ways to manipulate the system. They will use properties that are not comparable to the subject property to keep the price down. For example, the home they have for sale is in a quiet treed street and they will compare it to something that sold on the main road just to quote a lower price.
Alternative, it has made it hard when you have to use a sale that was freakishly high due to reasons such as; the neighbour bought it, the buyer paid more for personal reasons, etc…By having to use this sale, we are hindering the sale of our property by pricing it too high.
One of the most controversial things that I have ever done. I am going to rate my top 10 Real Estate Agents on the Mornington Peninsula based on my 30+ years experience and any personal dealings that I may have had with them.
These are in no particular order. My top 10 selection of Real Estate Agents on the Mornington Peninsula.
RAFFAELA DEL MASTRO (BELMAR REAL ESTATE)
I know this may seem biased, but I know what I am capable of and I know what I have achieved over the 30+ years that I have been in real estate. Most agents will tell you that they are great negotiators, but I know that I am. Fearless when it comes to getting more money from a buyer. It’s what I do best, so anyone selling will benefit from this skill. I have made some vendor’s up to $200,000 extra, due to my exceptional negotiating skills and this was not through Auction, but negotiating privately.
LEANNE WILLIAMS (BELMAR REAL ESTATE)
Leanne is an Associate of Belmar. I have worked with Leanne when I owned Bonaccorde in Mt Martha and worked with her when I was at Nicholas Lynch Real Estate. Her heart is always in the right place and when someone commits to Leanne, Leanne commits to them 100%. I would trust Leanne to sell my home.
AMANDA HAIMONA (BONACCORDE PROPERTY SERVICES)
I have known Amanda since she was 15 years old. She was our Saturday reception when I worked in Keilor and later joined me as a lead sales person when we started Progress Real Estate in Keilor back in the ‘90’s. Ironically, when we moved to Mt Martha in 2002, unbeknown to me, Amanda and her family moved only 800m away. At the time Amanda was working as a Recruitment Agent for Hays and sooner than later, she joined us at Bonaccorde. When the time came to sell the business, Amanda was the natural successor. Amanda is a caring, hardworking Agent that is really good at keeping in touch. I would trust Amanda to sell my home.
Sam is young, enthusiastic and a very good negotiator. His primary focus is mainly around Mt Martha, but he seems willing to venture to other areas.
NICHOLAS LYNCH (NICHOLAS LYNCH REAL ESTATE)
Nicholas is a great operator. He sold my home in Frankston South and I worked with him for over 12 months to discover that he is a great operator. His negotiation skills are sharp, he has a brilliant memory and his high energy is fuelled with every deal he makes. On a good day, NIcholas is one of the best.
DEAN PHILLIPS (McEWING PARTNERS)
I worked with Dean when I first moved to the Peninsula as a vendor’s advocate. Time and time again we would use his services and he always got a great result. He has gone onto running a successful company and seems to have a lot of energy that never runs out.
BILL BRANTHWAITE (NICHOLAS LYNCH REAL ESTATE)
I worked with Bill for almost a year and you could not find a nicer guy if you tried. He commits to every sale like it is his own home and he is extremely trustworthy. I would definitely use Bill to sell my home.
DAVID COWIE (NICHOLAS LYNCH REAL ESTATE)
I worked side by side David for almost a year and what I discovered is his dedication and great work ethics. He keeps chipping away and gets great results time and time again. David is a trustworthy agent.
MIKE PHILIPS (RT EDGAR - RYE)
Mike sold a home for me in Rye about 16 years ago and we have remained friends. He is an honest, hardworking agent with great morals and excellent negotiating skills. One that I would definitely trust to sell me home at the top end of the Peninsula. Mike is a trustworthy agent that I would definitely use to sell my home again.
VICKY SAYERS (RT EDGAR _ MT ELIZA)
I worked with Vicky only for a short time when I was at Nicholas Lynch real estate and I can honestly say she is a selling machine. I don’t know if Vicky does anything outside of real estate because from what I saw she eats, breathes and sleeps thinking of real estate. She has won many awards and is at a stage of her life that this is her world.
With the Market adjusting itself back to a more normal structure, it’s more important than ever to choose the right agent. Agents who have joined the industry in the most recent years would have an unrealistic view on how real estate is sold. They would lack the closing skills that most skilled agents have, which come with years of experience.
Here are the top 5 things to look out for when choosing the right agent;
At least 5 years experience in the Real Estate industry
Licensed Estate Agent. They are apt with all the latest legal obligations.
Skilled at closing deals.
Great attention to detail
Excellent marketing skills or appropriate support
1. Go to as many open for inspections that you can prior to selling. This will give you a good insight as to how proactive an Agent is. During this process, see how well that Agent conducts themselves; how they follow you up; Are they arrogant?; Are they helpful?; Do they ask all the right questions to get an offer from you?;
2. Get your home ready before you call an Agent so that they can see it at its best and give the right value of the home. Call in an expert that can help you with this. If you are not sure who to call, we are happy to provide you with a few names of local stylists. If the Agent sees your property at its’ best, you are more likely to get a better value estimate. Just like buyers will vary in what they think the value is, so will Agents. In some cases you can get huge variances and is indicative that everyone sees things differently. Remember, this is only an estimate. The real value will come from the buyers.
3. Call at least three Agents to interview. Just like a job interview, ensure you have questions prepared that you would like to ask each Agent so you have a set agenda prior to the meeting and you get an answer to the same questions from each Agent. Ask for references and call those references too.
4. Not all Agents are created equal. The Agency itself might be well known to you, but the actual Sales Consultant that comes to your home, might be inexperienced. Experience is paramount. A skilled negotiator will undoubtedly get you more for your home. Don’t base your decision on liking the person. They may be a great & likable person, but are they a great sales person? A Licensed Estate Agent has more knowledge of the law that surrounds real estate. Ensure that the Agent as well as the Agency they work for are members of the REIV (Real Estate Institute of Victoria - the governing body for all Agents in Victoria). Don’t assume that they are members. Ask for evidence.
5. Interviewing for an Agent is the same as interviewing a candidate for a job. You may only need to interview three people, or you may need to interview ten. If you are not satisfied that the Agents you have interviewed are the best for the job, interview more. You need to feel confident that the Agent you appoint is the best person for the job - the job of selling your most valued asset. Once you have decided, appoint the Agent and then place your total trust in their ability.
Attend as many open for inspections and auctions as possible
During this process, assess the Agent’s skill set
Get your home looking great before the Agents come to your home
Interview stylists to assist if necessary
Have set questions prior to interviewing an Agent
Ask for references & call these references
Find out how much experience the sales consultant has
A Licensed Estate Agent is better qualified and knows more about the law
Don’t choose an Agent based on how well you know the Agency they work for. This doesn’t necessary guarantee a great Sales Person.
Don’t choose an Agent based on personality, but more on their skill set
Ask if they and their Agency members of the REIV
Three Agents is usually a good number of Agents to interview, but if you need to interview more, do so.
Once satisfied that the Agent is right for you, go ahead and appoint them.
What questions should I ask when interviewing a Real Estate Agent?
Interviewing an Agent should be the same process as any organisation interviewing potential employees. After all, the Agent you choose will be selling one of your most valuable assets and you will be paying them a generous fee to do this. Don't take this process lightly. As any job interview, do your homework. It's not a personalty contest, so ask the right questions to ensure you get the right person to do the job.
The following are some examples of what you could ask.
1. How long have you been in Real Estate?
Of course longevity of a career doesn't necessarily determine the Agent's qualifications and having the experience doesn't always mean an agent has the skill set to back it up, but this question will guide you to other questions that will assist you in determining their ability.
2. Are you a Licensed Estate Agent?
There are different qualifications to become a Real Estate Agent. An agent could be an 'Agent's Representative' or a 'Licensed Estate Agent'. A Licensed Estate Agent has completed a Certificate IV Property Services and has greater knowledge of the law, Contracts, legislation, Act etc... This is paramount when entrusting someone with your most valuable asset.
3. Are you and your Agency members of the REIV (Real Estate Institute of Victoria)?
The REIV is the governing body of all agents in Victoria. They provide Code of Ethics as well as enforce legislation. It's not too dissimilar to a builder being part of the Victorian Building Authority. You would seriously question why an agent is not a member of such an organisation.
4. Does your Agency have Professional Indemnity Insurance?
If an agent is a member of the REIV, it is compulsory to have Professional Indemnity Insurance. This protects you as well as the agent for any misrepresentations or legal issues that may arise with the sale.
5. What three recent sales can you refer to that compare to my home?
Consumer Affairs require agents to provide 3 recent sales (no more than 6 months) and within 2km of the property they are selling. If an agent cannot provide you with these, you need to question their knowledge of the area.
6. What three properties currently on the market do you think will be our competition?
This is paramount in pricing your home. You need to know what your competition is. Price your home too high and you will sell your competitor's home. Price it too low and the wrong buyers will come through.
7. What is your Fee for Service/Commission?
Observe how confident they are in telling you their fee. Great agents value their fee and are not coy in telling you. In my opinion, how one answers this question is how they will handle being asked the price of your home. It needs to be delivered with upmost confidence. Agent's lacking in confidence or skill, will avoid answering.
8. How much will Marketing cost?
Another questions agents avoid answering or don't give you a straight answer. Remember, this person is going to be dealing with prospective buyers on your home and how he handles your questions are just important for you to determine how they will handle the buyer's questions or objections.
9. How long will my home take to sell & why?
Of course the answer to this is unpredictable, but I like to ask this question because it gives a perspective of the Agent's view of the market. Are they positive? Do they have a strategy in place? The answer to this should provide you with confidence, not doubt.
10. What is your process for handling offers?
This is such an important question. The general public are not aware that different Agencies have different processes and you need to understand what process each Agent you interview has because you may or may not like or agree with it. It's too late after you have appointed them, so make sure you fully understand how offers (especially multiple offers) will be handled.
11. What Estimated Selling Range would you suggest for our home and why?
12. Do you have a list of References of past clients that we can contact?
Crucial. Just like a job interview, a candidate would provide references, so should an Agent. Don't just read what the client has written, call them and ask about their experience with them and why they would recommend them.
13. How can I make my home more marketable?
What you are asking here is how to prepare your home or stage it for sale. Most experienced Agents would know what to do. A well presented home always achieves a better price, so make sure that the Agents you are interviewing care enough about this and offer you suggestions.
How do I choose the best Agent on the Mornington Peninsula?
Ask friends, family & Associates that have recently sold a property about their experience and if they would recommend the Agent or Agency
Knock on homes that have a sold sign and ask that Seller about their experience and if they would recommend that Agent or Agency
Look at the Marketing. You might have the best presented home, priced ideally, but if it doesn’t match the marketing, the right buyers will not be attracted to it. XYZ Real Estate Agent might be the right guy, the right experience, the best Sales Person, but how does the Agency’s marketing look? Look at the Real Estate Weekly Magazine, Leader Newspaper, real estate portals such as www.realestate.com.au and www.domain.com.au and see how their homes are presented/represented
Look at the Agency’s brochures. This is what the buyer takes home with them and ultimately remembers your home by. Is it how you want your home to be remembered?
What do their boards look like? Are they clear, crisp, informative and memorable? Will they represent your home at its best?
Ensure your agent isn’t too busy. An agent that takes on a lot of listings cannot best serve their Seller/Vendor. Belmar Associates accept a maximum of 5-7 listings at any one time. We know if our Associates take on more listings, our service will be compromised. Overcommitted agents cannot serve their Seller's with 100% focus and dedication. Overcommitted agents won’t be able to stay on longer for inspections because they will be running from one to another. Do you want someone that can stay one hour to show your home or only 15 minutes?
Of course, we will say that Belmar Real Estate is the best choice for selling your home on the Mornington Peninsula, including Frankston & Frankston South through to Mt Eliza, Mornington, Mt Martha, Safety Beach and Dromana. Ask us more about what Belmar can do for you.
Back in 1986, Commissions or Fee for Service was a set scale. Depending on what your home was worth, you paid XYZ. Approximately 1994, under the Kennett Government, the commission for real estate agents was deregulated and since then it has been open to negotiation. Understanding that it is negotiable is very important because an Agent might tell you that their Fee for Service or Commission is X% of the sale price or a fixed figure, but you can legally negotiate this percentage or set price. This is a good test to see how good your agent is because if he/she is desperate for the listing, they will drop their fee immediately. Is this who you want working on your side when selling? This is their money and if they are quick to drop it, how will they perform when it comes to negotiating a strong price when selling your home?
The fees or commission will vary from Agent to Agent. They can be a percentage of the sale price or a fixed fee. The more experience the Agent is, the higher the fee should be. It’s like going to a GP vs a Specialist/Surgeon. You’d expect to pay more for the Specialist or surgeon. On the Mornington Peninsula this will vary from as low as 1.8% to 3% of the sale price. On average it’s between 2%-2.4% of the sale price including GST. When an agent quotes you their commission it should always include the GST. On properties over $2 Million the average percentage does drop, but remembering that it is legally negotiable, should enable you to set a percentage or fixed fee that you are comfortable with.
It’s important to not choose an Agent based on their commission alone. The old saying “you get what you pay for" rings true. An experienced and great sales person will be more sought-after and usually more expensive. Ask yourself, if Agent A has 2 years experience vs Agent B who has 15 years experience, would you expect they both charged the same?
The cheapest Agent could end up costing you more by getting thousands of dollars less for your home. Our Belmar Associates have seen so many examples over the years where Sellers have gone with an Agent because they thought they were saving on their commission but ended up selling for $20,000, $50,000 and even up to $300,000 less. Yes they saved on commission, but they missed out on so much more.
Commission or Fee for Service is negotiable
The Commission can be a percentage of the sale price or a fixed price
The Commission or Fee for Service should always include GST when quoted to you
On the Mornington Peninsula the average commission is between 2%-2.4% of the sale price
For homes over $2 Million, the average commission usually comes down
The cheapest Agent can cost you more by getting you thousands of dollars less for your home
How much commission should I pay when selling my home or property?
Should I style my home?
This is a subjective question because it depends on so many factors; your budget or finances, the style of property or home, big or small, vacant, occupied by you or tenanted? Just completed, run down etc... Generally speaking, a well presented property/home, whether it is styled professionally or enhanced by you, has a better chance of achieving a greater result. Even blocks of land can benefit from a quick mow and tidy up.
Some experienced Real Estate Agents will offer this advice for free and you can be guided by them and you can do it yourself. When you are limited by time and know-how, there are experts. You can hire or buy, and the cost will vary on size, amount of items you need, etc.
At Belmar, we're big on presentation. We understand how important this is and the impact it has overall.
CASE STUDY: 1 (If I told you that you could invest $5,000 to make $135,000, would you do it? This story is true and that's exactly what happened)
There was a property in Mornington for sale not so long ago that was with another agency and it had been on the market for some time. The owner was frustrated that it had not sold and could not work out what was wrong. They would have happily accepted an offer of $900,000 but the agent they were with could only get offers up to $850,000. It had been on the market for almost three months. A colleague of mine took this property on and realised where the problem was; the presentation. Sure it was neat and tidy but the home would not appeal to the masses. The owner’s lovely rugs and cushions were beautiful and in excellent condition, but a style that was very specific to her. At first the vendor resisted my colleague's recommendation on getting the property styled due to the $5,000 investment required but with his passion and conviction, she was finally convinced it could be worth it. After professional styling, re-photographing and a new marketing campaign, the property was sold in just one week for $985,000. The vendor's $5,000 investment resulted in a $135,000 profit. Same home, same market, different approach = great result. This vendor was lucky - she received a second chance. Not everyone is this lucky.
CASE STUDY: 2
A colleague listed a home in Mt Eliza. 3 weeks prior, the home next door had sold with another agent for $875,000. The home next door was 4 bedrooms, in similar condition to my colleague's listing and same size land. On our recommendation, our Vendor proceeded with getting their home styled. Their home was only 3 bedrooms and they agreed to invest $7,000 towards professionally styling their home with 'Coastal Styling'. This home sold after just one opening for $1,000,000.
Same market, same selling conditions but an exceptional result compared to the home next door. Sure other factors may have played a huge part in this outstanding sale price, but without a doubt, the investment of $7,000 towards styling played a huge factor.
There are many companies offering a styling service for selling. There are two types:
You can hire as little or as much furniture and soft furnishings for a weekly rental figure. Usually an initial 5-6 week campaign and then pay weekly after that if the home doesn’t sell within that hire period. This can range from as little as $3,000 up to $10,000 plus, depending on how much furniture you need and how big your property is.
You buy knick-knacks and furniture to enhance that you can keep forever. These styling companies usually work on a budget that you set and you can be as involved as you want. Budgets can be as little as $500 up to whatever you want to spend. Remember, with this one, you can keep it... We have a list of companies for you to call upon in our section 'Suppliers'
We can recommend both kinds of stylists (hire or buy) for you. Get in touch with us to ask for details.
Styling your property/home professionally may not always be possible. A good Real Estate Agent can give you advice on what you can do yourself and this will only cost you your time
Borrow from friends
You can hire or buy
Choose a styling professional to assist you if necessary.
Should I use a Vendor Advocate to sell my home?
This is a great question because Belmar's Founding Director, Raffaela Del Mastro was a Vendor Advocate for a few years when she first moved to Mt Martha in 2002. A true advocate is most beneficial but unfortunately today most advocates can hinder your sale.
What does a Vendor’s Advocate do? We can best answer this with by asking Raffaela what she used to do.
"I used to interview a minimum of three Real Estate Agents. I would have a list of questions that I thought were really prudent to me if I was going to appoint them. These questions are available to you under “What should I ask the Real Estate Agents that I am interviewing?”
I would then become a buffer between the Agent and the Seller/Vendor so that the Agent was unable to manipulate, coerce, or pressure the Seller/Vendor into accepting something that they were not happy to. I considered myself a ‘protector’ or ‘Guardian Angel’ for all Sellers/Vendors, because I literally was. But these days it’s all about just getting a piece of the commission pie. What Vendor Advocates do, you can do yourself. If you don’t feel comfortable with the process, it’s either because you are not dealing with the right agent or you may just need some guidance. Please see “Choosing the right Agent” section to assist you."
Real Estate Agents don’t like sharing their commission, so unless you are paying for that Advocate’s services separately, you’re going to have the Real Estate Agent that is potentially selling off their game. Also, good Agencies and great Agents choose to not work with Vendor Advocates because they don’t see the benefit (usually there isn’t one), so the Advocate is resorted to choosing an inferior Real Estate Agent because they are the only ones that will work with them.
Good Agents don’t need monitoring and hate to lose control. The information gets lost in translation.
How do I sell my property fast?
Of course it’s great to sell fast, but this should never be your primary aim. Getting the absolute best financial outcome should be your upmost concern. Having said this, properties that are high in demand, well priced and have a skilled Sales Person to negotiate, should achieve a great result quickly within the first 2-3 weeks that the property/home is put on the market, and up to 4 weeks if your property/home is being auctioned.
The following will definitely help;
Present your home at its best. Either do it yourself or get professionals to style it for you.
Price your home appropriately and competitively. Look at past sales no older than 6 months and no further than 2km, of properties/homes similar to yours in your area. Compare your property/home to properties/homes for sale no further than 2 km & with similar attributes to yours i.e.; land size, home size, condition, age, pool etc.
Choose a skilled negotiator/Sales Person to close a sale quickly and obtain the best price and terms for you.
The best offers can often come in the first week or so and your first offer might also be the best because the most active buyers are desperately on the hunt and will come through straight away. Don’t over look your first offers. Get your Real Estate Agent to negotiate hard and get a result if you can in this important/small window of opportunity. Past experience has shown me that Sellers/Vendors that think “it’s only the first week, we will get more”; often lose out in the long run.
What are the legal steps to selling my home or property?
If you are selling with a Real Estate Agent, you will need to sign an Authority to Sell. This can be a General Authority (you can appoint more than one Real Estate Agent), An Exclusive Authority (only one Agent or two working in conjunction) or an Auction Authority (one or two Agencies working in conjunction).
You will need to appoint a Solicitor or Conveyancer. It doesn’t matter which one, both can do conveyancing. A solicitor could cost you slightly more.
The Solicitor or Conveyancer will prepare Contracts of Sale and Vendor Statement (Section 32). A Vendor Statement or Section 32 refers to Section 32 of the Sale of Land Act and it’s a statement by the Seller/Vendor to the buyer outlining every legal component of the property/home. It includes a copy of title, rates, utility costs and connections, any building works completed, covenants, insurances etc.. Real Estate cannot be sold in Victoria without a Contract and a Vendor Statement. It is not legally binding. You must have the two.
When you finally accept an offer, you must have some consideration (deposit) paid to make the Contract binding. It can be already paid by the buyer or a date has been set on the Contract for the buyer to pay it.
Before signing the Contract of Sale, be sure to check the following;
a. Any Special Conditions? If so, what are they and when do they expire? Are you willing to accept these conditions?
b. Has the Real Estate Agent obtained a deposit? Even if the full deposit is not due until a later date, it’s important that the Real Estate Agent has obtained an initial deposit. This can vary from $1,000 to $10,000 and is important because in the event the buyer exercises their right to ‘Cool Off’, there is a penalty to the buyer of 0.2% of the sale price. If the Real Estate Agent has not taken an initial deposit, it is really hard to enforce this penalty. For example; on a sale price of $1,000,000, the penalty to the buyer if they ‘Cool Off’ will be $2,000.
c. Check the settlement date is what you prefer.
d. Check that there is a provision in the Contract to settle earlier by agreement.
The short answer is “No”. If you are comfortable preparing a Vendor Statement or understand the process of settling a sale, you can do this yourself. However, most people engage either a solicitor or conveyancer to do this for them. Unless you are sure and feel comfortable with your knowledge of the Sale of Land Act and the conveyancing process, we would recommend appointing a specialist.
Do I need a solicitor or conveyancer to sell my property?
How much should I spend on marketing my home/property for sale?
Marketing is another integral part of selling. Marketing is what’s needed to attract as many buyers to your property or home. Some believe they only need the internet, others believe they don’t need a board and others think that print advertising is a waste of money, but what you truly need to understand is that there are different categories of buyers and the different mediums reach out to specific categories. For example the internet is great for Active Buyers, interstate and overseas buyers, but of no use to passive or local buyers. Print will reach the passive and local buyers better. The board is definitely great for the passive or local buyer, but will be of no use to someone living in another state or country, or even if they are not from the area. So make sure you have a balanced and well thought out campaign so that you don’t miss out on any categories.
This investment will genuinely depend on certain factors; how much is the value of your home? Where is it located? What is your budget & financial situation? Marketing is a vital part of selling your home. Even on a tight budget, you can maximise this exposure. At Belmar, we don’t have a rule of thumb. Our campaigns vary significantly on the above scenarios, but as a guide expect to budget around $3,000 - $6,000. If your property is over $2 Million, expect a budget around $5,000-$10,000.
You need to have a good balance between the Mediums; Print, Online & Social Media. There are different categories of buyers. Some are Active and others are Passive. Some are local and others might be overseas or interstate. While the Internet can be great for some, print will definitely be appropriate for others. Reach out to everyone.
Marketing Costs are usually an extra investment that is paid separately to your agreed Fee for Service or Commission.
Some Agents may include the Marketing but make sure you see what they will actually commit to giving you. Just because they are including it, doesn’t mean you will get the right exposure or anything at all.
Marketing costs can be paid up front, during the campaign or at the completion of the sale. Each Agency is different, so make sure you get clarity on this with your Real Estate Agent prior to appointing them to sell your home/property.
If the marketing investment is required up front, it is a legal obligation for the Real Estate Agent to put this money into their Trust Account until such time as they have spent it.
This is generally a budget set by the Vendor/Seller. How much you budget for depends on;
Size of the property
Price of the property
And of course the seller/vendor’s financial means.
It’s important to cover all marketing mediums such as print, internet & social media. A good Agent should be able to design a campaign that will attract as many clients as possible to your property.
Marketing budgets/cost is usually paid by the Vendor/Seller. It can be paid up front or taken out when the property sells.
Some Agents may tell you that the marketing is included. Be wary of this. If an Agent includes marketing, you as the Seller/Vendor needs to know exactly what they intend to include. Get an itemised list of what they intend to do. Usually this does not include much and it’s only a ploy to attract your business.
Do I pay for my marketing costs up front or at the end of the sale?
What is a Section 32 or Vendor Statement? Do I need one?
Both these terms can be used meaning the same thing. Section 32 refers to Section 32 of the Sale of Land Act in Victoria. In this section, anyone selling a property in Victoria must provide a Vendor Statement to prospective buyers outlining all the legal information about the property such as;
A copy of the title
Any building approvals granted in the past 7 years
Any notices that can affect the property
Costs to utilities such as council rates
All services available and connected
You cannot sell real estate in Victoria without this document. It is advised that you have this document on hand before your property goes on the market.
A Contract of Sale is binding when all three of the following are met.
There is an offer (from the buyer)
There is an acceptance (by the owner)
Consideration has been paid (a deposit has been paid)
All of the above need to be on legal documents (A Contract of Sale with a Section 32 Statement or Vendor Statement). A verbal offer or an email is not legally binding.
When is a Contract of Sale binding?
A covenant is registered against the title. It usually is a rule set against that property. For example;
You can only build one dwelling on the land
It can only be single level
It needs to be a certain size etc....
Covenants are usually imposed on a title when the land is developed by the Developer. Covenants are difficult to remove because they are attached to the title and legally describe the use of the land.
What is a Covenant?
A caveat is registered on the title and shows a financial interest by the party that has lodged it. This could be a financial institution or it could be an individual.
It lets a buyer know that someone else, other than the owner has a financial interest in the property and will require funds from the property when it sells.
A property will not settle until the financial interest has been adhered to. It is important to address this before settlement or you may face delays.
What is a Caveat?
When does the 'cooling off' period end and is there a penalty for cooling off?
This is a commonly asked question that not even all Real Estate Agents can answer correctly.
Firstly, the Cooling Off Period” refers to the amount of time that a buyer has to change their mind. The following is only in relation to sales in Victoria. Different states have different rules. In Victoria the Cooling Off Period is 3 clear business days. It commences when the buyer makes their offer, not when the owner signs. It does not include weekends and public holidays. It ends at midnight (not 5pm) on the third business day.
Cooling Off Period does not apply to Auction properties. If you purchase 3 days before, on the day of or 3 business days after an advertised auction, the Cooling Off Period does not apply.
For example, if a home sells on Thursday, the Cooling Off Period ends midnight Tuesday night provided none of the days in between are not public holidays.
Exemptions to the cooling off period:
You must either give the vendor or the vendor’s agent written notice that you are ending the contract or leave the notice at the address of the vendor or the vendor’s agent to end this contract within this time in accordance with this cooling-off provision.
You are entitled to a refund of all the money you paid EXCEPT for $100 or 0.2% of the purchase price (whichever is more) if you end the contract in this way.
Example: If you purchase a property for $1,200,000 and change your mind, the penalty will be $2,400.
you bought the property at or within 3 clear business days before or after a publicly advertised auction
the property is used primarily for industrial or commercial purposes
the property is more than 20 hectares in size and is used primarily for farming
you and the vendor previously signed a contract for the sale of the same land in substantially the same terms
you are an estate agent or a corporate body
The answer is “No”. Once a Vendor or Seller has signed a Contract of Sale, they do not have a Cooling Off Period.
Does the Vendor/Seller have a cooling off period?
Should I sell by Auction or Private Sale?
This is such a loaded question because there is no right or wrong answer. It truly depends on so many factors. Let's break it down to the pros and cons of both methods and then look at all the different circumstances surrounding your decision to Auction or Private Sale.
Of course there are other methods available to you such as For Sale by Tender, Closed Negotiation, For Sale by a Set Date etc.... Be sure to ask your Real Estate Agent what methods are available to you and what they recommend.
At Belmar, we understand the benefits of all methods.
We have designed a system that combines all the benefits of an Auction and applied it to our Private Sales. Having said this, we do Auctions and most of Associates are Auctioneers. However, over the years we have come to discover that the following formula is one of the best methods in achieving a great result time and time again:
We create urgency with our Premier Viewings. Our Premier Viewings are the very first time someone can inspect your property
We ensure that all interested parties are there on the said date and time to create a massive atmosphere and urgency amongst buyers
We prepare buyers of our process before they inspect so that they are aware that the property may sell shortly after the Premier Viewing
We encourage all buyers to submit an offer on our uniquely designed Offer Registration forms shortly after a Premier Viewing
We are skilled negotiators and feel extremely comfortable with our ability to negotiate a successful result
Our closed negotiations ensure that all parties put in their best offer regardless of what anyone else is offering. This usually results in a much higher end price for our Vendors
We are happy to discuss this in more detail with you.
You have a set date to work towards
If it sells at Auction, the Contract is unconditional, so it is definitely sold. You do not have to wait for certain conditions to be met.
The buyer does not have a cooling off period 3 business days, on the day and 3 business days after the auction.
Buyers bid openly and transparently for the property. This could result in a much higher price for your property than what the agent could have negotiated privately.
You can take your time to sell
You have time to process each offer. No pressure
You can negotiate the terms and conditions you desire with each and every offer made
There is a lot of pressure on the buyer and seller to make snap decisions on the day
If you have an unskilled auctioneer, it could affect the end sale result
It may not sell on the day and this could influence buyer’s thinking of the property going forward
Some properties could take longer to sell due to their unique nature and a condensed selling period might not be beneficial
A buyer will only pay one bid more than the other and could have much more to spend
Sales can be conditional for some time
Buyers can change their mind by exercising their Cooling Off Period
It could take longer to sell
There is no urgency for a buyer
You could sell for less because of the lack of competition.
CIRCUMSTANCES SURROUNDING THE SALE
The following need to be taken into consideration when deciding Auction or Private Sale.
The size of the home/land and attributes
Your expectations on value of your property . A successful auction usually transpires when the owner’s expectations are lower than usual, allowing a larger buyer’s group to inspect
Is it a Deceased Estate, a Mortgagee Auction, do you need a quick sale, is it a matrimonial separation, are you in financial difficulty, do you need to move quickly for work outside of your area? All these questions contribute to your decision
What is commonly being used in your area? If most properties are being Auctioned, then you will be governed by this
What does your Real Estate Agent feel more comfortable with? Not all Agents are good negotiators and tend to recommend Auction so that this process is taken out of their hands. Usually inexperienced Agents will feel more comfortable with this process than a more accomplished Agent that is highly skilled in negotiating
Supply and demand. If your property is a highly sought-after property such as a development site, it may be beneficial to have a public Auction
In short, yes you can. However, a Vendor or Seller could always say no. It will depend on their circumstances. Conditional contracts mean that the property is taken off the market for some time and some Vendors may not be in a position to do this.
If it is accepted, the time can vary. It usually can be completed within a week.
If the property is going to Auction, you will need to conduct this beforehand, usually at your expense.
Can I make my offer subject to a building or pest inspection? How much time do I have?
Real Estate has changed so much since Belmar director Raffaela Del Mastro started back in 1986. To get the same amount of exposure that you're able to achieve now with the internet & social media, an owner would have had to have spent beyond $40,000 on marketing to reach interstate and overseas buyers. Now it’s accessible to everyone.
In the 80's is was certainly an added advantage to be part of a large franchise group. An agent in one suburb was able to notify a buyer in another through the franchise group and the smaller agents were left with the local paper and walk-ins to their office. Buyers wanting to buy in an area outside of theirs would have to make a trip to that suburb, whether it was to fly or drive, go to all the local agents and seek what they were looking for. Buying and selling now is so much easier.
To answer this question, we can honestly say from experience it doesn’t matter one bit. Whether an Agency has one office or 10 or whether they are national or global, it literally makes no difference.
If you are in the process of choosing a Real Estate Agent to sell your property/home and they have told you that being part of a large franchise benefits you because all the offices around the state/ Australia or the world will be working to sell your home, try this simple exercise:
1. Choose any property/home for sale with that franchise
2. Call another office completely out of the area
3. Ask them to tell you about that property/home
It will be an interesting exercise. I’m almost certain that they won’t know what you are talking about. Alternatively, if you ask them about homes for sale in an area that’s outside of theirs, the best you will get is the address. Ask them what kind of heating? How far to the nearest school? What is the roof made of? And so on.... They won’t be able to tell you. Better still. Call the actual agency that has the listing for sale and ask another Real Estate Agent whose name is not on the listing and they too won’t be able to answer all of your enquiries. You know why? Because the listing Agent, the one whose name is on the advertised property is the Property Specialist. He/she is the one that should know and will know all the ins and outs of that property for sale.
This leads me to another very important point. The Property Specialist is the person you have appointed to sell your home/property. They are the one you trust. Do you want someone else that either has never been through your home or seen it only once very quickly talking to buyers? How bad would it be if a buyer is asking someone else from that office about your home/property and they need to get back to that buyer with every question they have? Or do you want the buyer to be completely confident that the Real Estate Agent that you have appointed as your Property Specialist knows all there is to know about your property?
Choose the Real Estate Agent that you trust over and above the size of the Agency that they work for
The internet has made it easier for Sellers, Buyers and Real Estate Agents making for an even playing field across ALL agencies, big, small or otherwise.
Have a Property Specialist and ensure that they are the only ones talking to buyers about your home.