Sell your home faster using the right words

Professor Paul Anglin, a real-estate economist in Guelph, Ontario, says that homes described as “beautiful” in real-estate listings sell for 5% more while “move-in condition” has no effect on sale price.

Anglin and his colleagues from the University of Windsor and researchers from Canada Mortgage and Housing examined about 20,000 real-estate listings and sales data in Windsor and Essex counties, Ontario, from between 1997 and early 2000. Among other things, they studied how listings’ phrasing affected sale prices and the length of time it took for the listings to close.

When speed is of the essence

Listings with the words “beautiful” or “gorgeous” sold 15% faster. “Landscaping” in a listing hastened a sale by 20%. Describing a property as in “move-in condition” quickened the sale by 12%. Calling a home a “handyman special” cut sale time by half (researchers excluded listings that used the term to describe a workshop or hobby area).

Other familiar jargon, such as “must see” or “vacant,” or including the information that a seller was moving, had virtually no effect on the time before a sale.

The kiss of death appears to be language that reeks of desperation — words such as “motivated” and “must sell.” These slowed sales by 30%. The term “ranch” house slowed sales by 10%. Properties described as rentals (income-producing) took 60% longer to sell.

Though Anglin assumes the basic effects he identified are universal, the size of their impact will vary by locale, he says

Barfoot & Thompson’s Auckland market share now 39%

It’s official - As of August 2008 Barfoot & Thompson’s Auckland market share has rocketed to 39%.  That means we sell almost 1 in every 2 homes. 

I don’t know of any other City (population 1mil plus) in the world that can boast such a successful real estate company.  If you know of a City with a similar company, please let me know!

Someone asked me today ”why has Barfoot’s market share risen so rapidly during this market down turn?” 

The reason, I believe, is that property owners instinctively gravitate to a company they know is more likely to get them sold.  Solid systems, non-franchised family owned, experienced people, a stable employment environment, competitive fees and a rock solid 85 year reputation are some of the other compelling reasons I can think of.

What will happen to the residential real estate market if Labour wins the NZ election?

Having been through several election campaigns during my 12 years in real estate I’ve found that many buyers during this period use the excuse “I want to wait until after the election”.  An election, rightly or wrongly, instills uncertainty.  Should it though?  Doesn’t life just “carry on”? 

One healthy result of buyer procrastination, is that the election period is likely to be a slightly better time to buy than afterwards (assuming all other factors affecting the housing market remain pretty much the same).  It is likely to present excellent buying opportunities that otherwise may not have existed.

I’m keen to hear your views about this. 

What will happen to the market if Labour wins? 

What will happen to the market if National wins?

Prices falling in Auckland by how much?

Regarding prices falling, I understand a Meadowbank house that a colleague and I auctioned yesterday in Meadowbank was on TV3 News last night. Apparently the commentary said that the house would have sold around $900,000 at the peak of the market (last year) and couldn’t get $700,000 yesterday. Bidding stopped at $681,000 and current negotiations are into the $700,000s. Last year the owners paid $775,000 so I don’t know where they got $900,000 from. Don’t let the truth get in the way of sensationalism though eh! And by the way $775,000 minus 9% would be $705,250. This vendor will do better than the average punter when this deal is closed soon.  View the factually incorrect video here

Property Nut’s Paradise

If you’re a property nut you’ll love this website www.globalpropertyguide.com.  It provides great data and graphs on house price trends throughout the world.  It rates individual country’s investment potential etc etc.  Check it out!

July 2008 Newsletter

I’ve experienced so much success in 2008 that I feel a bit uneasy when people ask me “so how’s business?”  Despite a constant stream of negative financial news, I sincerely hope you’re managing to avoid the turbulence.  I’m not at all qualified to offer advice in this arena, but I sense that “debt reduction/avoidance” could be more important today than at any other time in recent history.  I suspect that only time will tell.

I’m telling you the following story to demonstrate why and how people sell in the current market.  Many people think now would be a bad time to sell, but is that really the case?   Clients of mine in Koraha Street were keen for a “tree-change” after I sold their home by auction last month.  The day after their auction (with two bidders) they reluctantly dropped and sold $60,000 (or 7.5%) below their expectations.  Realistically, they sold about 13% below what they might have achieved 12 months earlier.

Armed with a lighter bank balance than anticipated, they were understandably nervous about their ability to find and fund a more expensive home.  Before long they found a dream opportunity in semi-rural Riverhead.  They negotiated well and secured a very special property about 15% below vendor’s expectations.  Realistically, they bought about 20% below a figure the market would have supported 12 months earlier.

If the market was rising I could understand people’s hesitancy to sell at a price they weren’t happy with.  In a flat or falling market, if you’re buying again, it’s a great time to sell.  Until next time, thank you for your ongoing support.  If I can help you or anyone you know, please let me know. 

How to sell in a falling market

This post is written to help you if you are on the market selling and feeling the heat.

How quickly we’ve forgotten the heady days of sky-rocketing prices where buyers were literally jumping over eachother to buy a home. 

Let’s look at the best way to sell in a rising market.  Don’t risk a fixed price because your price might be higher than you think.  Market widely and attractively so more people buyers inspect your home.  Make buyers compete, it will probably drive your price higher.

In a falling market?  Don’t risk a fixed price because the risk is your price is lower than you think.  Market widely and attractively so the right buyer inspects your home.  If two people find and like your home you’ll get the best price by making them compete for it.  If you only find one buyer my suggestion is work with them if they are within 5 - 10% of your bottom line.  That level is probably where the market is for your home right now.  Remember, if you’re struggling to sell, you’re not alone.

Ask yourself what you wouldn’t sell for.  Ponder that figure for a few days.  You’ll likely conclude that you should sell at that figure.

Top 5 future trends in New Zealand Real Estate

I was privileged to be invited this week to attend a dinner and talk by US based real estate visionary Stefan Swanepoel.  The evening was hosted by Alistair Helm and the team at www.realestate.co.nz.

Stefan is a sought after speaker at major real estate conventions around the world.  His message is unique, well researched and insightful.  I am adapting some of my business practises to ensure I continue to meet and hopefully exceed the needs and expectations of my clients now and in the future.

You can read a summary of the top 5 trends here:  Top 5 Future Trends in New Zealand Real Estate

The first change I made was to join Linkedin - a business social networking site.  Check it out, it’s great!

Auckland house prices fall by $416 per day in June 2008

Today’s NZ Herald headlines shouted the above statistic.  Auckland’s median had gone from $447,000 to $435,000 in just one month.  Low sales volumes were a major contributor.

Four months ago, in March 2008, I wrote this:  “In a few months (say May 2008 we may see a headline that says “Auckland house prices falling by $100 per week”.  By the time a headline like that is published, the decline is likely to have stopped, and the buyers are likely to have returned to the market en masse.”

So, it seems I got the figures a tad wrong.  Are buyers flooding back to the market as I write this?  No they’re not, but I can’t remember a winter in which sales numbers were at all bullish.  When buyers sense that prices are right, they will come of out of the woodwork.  Anyone who is buying right now will tell you they feel good about the price they are paying.  Did they say that during 2006/7?  No they didn’t.

Imagine the opportunites that are about to present themselves to buyers.  Wouldn’t you love to be a cashed up investor right now?

On a personal note - 2007 was my best year in real estate.  More sales, more income than ever!  This year, 2008, I am tracking better than I was last year.  Fact.  The negativity, falling prices, fewer buyers etc, are simply not slowing my business.  If anything, real sellers are calling me, because (if I do say so myself :), I am selling homes without too much difficulty in this market.  The difference?  Experience and skill.

US realtors pay for ads and NZ agents don’t

In the USA most homes for sale are advertised widely on the internet and only occassionally in newspapers.  In NZ, many vendors pay for (bigger) newspaper ads and agents pay for the internet.

A ballpark average fee to sell a million dollar home in NZ is $24,000 (approx Barfoot & Thompson fee). In the US my understanding is that the equivalent fee charged to sell a million dollar home would average somewhere between $40,000 an $60,000. At that fee, US realtors could afford to risk quite a few Property Press full pages! I’m guessing, however, that if I was a realtor in the USA and was earning their higher fees, being more internet focussed and less newspaper focussed would serve my own interests by increasing my profit. Perhaps the vendor’s best interest would be served if the US realtor spent more dollars on print advertising? Imagine doing something that would benefit the vendor!

When seen from this viewpoint it’s possible to understand why web based advertising is pushed more in the US than it is in NZ.