There is no avoiding the facts – Melbourne’s property values are heading slowly south. May 2018 saw the sixth straight month of decline in values.
A recent home auction in Melbourne’s East is a good example of how quickly the changes to investment lending and foreign investment rules, have taken effect. At auction, the vendors turned down a bid of $940,000 and passed the property in.
A mere three weeks later, the home was re-auctioned, eventually securing a bid just over $900,000. Accepting such a loss must have been a bitter pill to swallow for the vendors. It is a scenario all too familiar throughout Australia’s eastern states, in the current real estate climate.
The good news for sellers is, while Melbourne has quickly become a buyers market, properties are still selling; with the demand for houses growing by almost three percent. If you are considering selling your property in a market where stock is no longer flying off the shelves, there are still strategies you can employ to ensure your property sells quickly and for a solid result.
Value Adding
To compete and win against the competition in a tight housing market, demands that a home possess something exceptional, making it stand out. How is this achieved? Through carefully implemented, cost-effective staging and updating.
Kitchen renovations in Melbourne can be the single most influential factor in selling a home. The kitchen is an emotive room, the hub of the household, where buyers will usually envisage the majority of their social and family interactions occurring – Christmas, birthdays and casual dinners. A functional, inviting kitchen which has been designed to optimise socialisation and comfort, can transcend many other failings in a home. It can be a deal maker.
Expenditure on renovations should be consistent with a home’s value. As a rule of thumb, stick within the five to 10 percent range when calculating a budget. In the luxury market, buyers will be expecting a sumptuous, well designed kitchen with European appliances, stone benchtops and every modern convenience.
Street appeal is another crucial factor in selling a home. The external presentation will generally be the leading image used by an agent when advertising. Many sellers are choosing to render older homes, often making them indistinguishable from new builds. Landscaping should be low maintenance and attractive. Other cheap but effective fixes include:
- Resurfacing driveways
- Updating garage doors
- Replacing entrance doors
- Installing modern letterboxes
Selling Agents
You may have noticed that there has been a recent surge in marketing campaigns for cut priced, flat-fee real estate agents. There has long been suspicion surrounding the fees larger agents charge, and with some justification. To understand the pros and cons of each choice, it pays to get a clear idea of what each agent brings to the table.
Local agents
A local agent with a store front presence has the immediate advantage of offering prospective buyers who are house-shopping in your area, a ringside seat to your home. They will have knowledge of the local market in real time and be available to respond to inspection requests at short notice.
With cut price agents now gaining an increased market share, there should be substantial room to negotiate your local agents fee down. If not, there is always another one a few doors down…
Flat fee agents
Knowing exactly how much your agents fee will be is very attractive, particularly when that fee may be a third of mainstream agent’s variable commission. Conversely, you need to ask what is motivating the agent to sell for a higher price when he gets paid the same fee no matter what…
When using a flat fee agent ensure they live locally and understand your market. Ask a few pertinent questions:
- Will you be holding OFI’s?
- How quickly can you respond to buyer queries?
- Can you provide testimonials?
- Can you provide proven sales data including time on market?
Beware – In a slow market, there is a common practice amongst larger agencies to perform a version of the old ‘bait and switch’ with sellers. It goes something like this:
- Talk up the price expectation to secure the listing
- Insist that an auction will get the best price
- After the first inspection, begin ‘massaging’ down the vendor’s expectations by pointing out the home’s faults (which have miraculously appeared!)
- Sell it off quickly at auction, pressuring the vendor to accept the highest bid, in order to get a fast turnover and commission.
In a slow market it literally pays huge dividends to shop around. By investing wisely to raise your home above the competition and partnering with a hardworking agent, you can best position yourself to defy trends and secure a strong selling price.
