Critical for sellers to get price right
House sale activity has declined, and more homes are being passed in at auction. But experts say owners of properties that do not sell right away should not give up.
The red-hot boom of recent years has ended, but most commentators say the market is unlikely to crash, and it is instead rebalancing to more normal conditions.
There has been a significant increase in the amount of properties on the market, which gives buyers greater choice, and Fomo (fear of missing out) has gone. With prices easing, buyers are now willing to keep looking rather than snapping up whatever they can.
These changes mean sellers need to recognise they no longer have the upper hand, and that sales are taking longer. Nationally, the median number of days it took to sell a property was 36 last month, an annual increase of eight days, according to the Real Estate Institute.
Real estate business consultant Lauren Mirabito says many people think that if a property is passed in at auction or does not sell rapidly the sales process has been a failure, but that is not the case.
‘‘It’s all part of the process. An auction is the best way to get solid feedback on where the market sees the value of a property. So if there are lower than expected auction bids, or price offers during a campaign, that’s a useful signal to take on board.’’
In such a non-sale situation, that type of information should help the seller and their agent move on to the next stage of the process, she says.
‘‘New buyers enter the market regularly, so the pool is refreshed every four to five weeks, and demand is still there. That means the question for sellers is ‘what should I do next’ to ensure a good sale.’’
The first step is to look at a property’s price. Industry representatives, such as the Real Estate Institute, have been talking about the need for sellers to re-adjust their expectations for some time.
And that is a reality, Lodge Real Estate managing director Jeremy O’Rourke says.
‘‘In this market, it is critical to get the price right. It’s normal for sellers to want to get the best price they can, but prices have come back, and there are more houses for sale. It is unrealistic to have expectations based on last year’s market.’’
As an example he points to one part of the Hamilton market where there were 61 houses for sale but just 13 sales last month.
‘‘A property needed to be in that top 13 in price and value proposition in order to sell.’’
Establishing the right price, particularly if it involves a downwards adjustment, requires solid market information. Sellers can research this by going to open homes of similar houses in the area and looking at comparative sale prices.
But Ray White Carpenter Realty owner Glenn Carpenter says a good agent should provide their client with data gleaned from offers, feedback and up-todate information on comparable sales before any pricing decision is made.
‘‘If there have been some offers under the sale price it indicates something about their expectations. If there have been no offers, an agent has to present a seller with relevant market evidence.’’
Similar to a stockbroker, an agent needs to advise their client in relation to what is happening in the market and with prices, he says.
‘‘A broker might say this share is selling for $4.20 today, so do you want to sell for that now? It’s the same for property.’’
If a seller wants to stick to their price and wait it out, that is their call, but they should be informed the market might stay flat or fall further, Carpenter says.
‘‘It is worth looking back to the GFC in 2008 when potential sellers who waited to list didn’t see prices start to come back until mid 2010.’’
Once a pricing decision has been made, a seller’s agent has to proactively step up the campaign.
Mirabito says an agent should be information gathering, boosting marketing, working the phones and their client databases, as well as their colleagues, to reach the maximum potential buyers.
It is easy for agents to sell in a hot market, but ‘‘when the tide goes out, you can see who is naked’’, she says.
‘‘In a slower market, an agent can’t sit back and wait as they’ll miss opportunities. And sellers are entitled to ask, and be given, details on what is being done to secure a sale.’’
Century 21 New Zealand owner Tim Kearins says if a seller is not getting a result, they should look for ‘‘the best second agent’’. That means interviewing a number of experienced agents to establish which one will work best for their particular sale.
People, not advertising, is what sells properties in this type of market, so agents who have an active network of potential buyer relationships are who a seller should want, he says.
‘‘But changing photos and rewriting ads can help. A seller needs to focus on presenting the benefits of the house, and a story of how it can be lived in, rather than just listing its features. Reworking the sales material for a new pool of buyers can help reach the buyer needed.’’
All the agents say a property should have been presented in its best possible state from the start of a campaign, so further decluttering, or repair or renovation jobs should not be necessary. But staging a property could be worthwhile, if it has not been done previously.