By Pam Walkley,
Money Magazine,
Putting your home up for sale is a major undertaking, especially since it is usually your most valuable asset.
Getting the highest price possible within a reasonable period should be your number-one aim. And while there is no "one size fits all" strategy, there are some basic rules that all sellers should follow.
Once you have made up your mind to sell, the next thing you need to decide is if you are going to use an agent or DIY. With the average real estate agent commission on a house sale being around $10,000, on the surface you can make a huge saving if you DIY.
The risk you take is that if you do not have the time or the temperament to do this well, you may sell too cheaply, or not at all, and wipe out any savings and perhaps more. But if you do have the time and ability to handle your own sale it can be really worthwhile from a money point of view.
If you decide to use a real estate agent, find a good one. The agency you deal with is not nearly as important as the actual person.
"The vast majority of estate agents are hardworking people," says real estate expert Michael Yardney, "But some just seem to achieve better results than others, and that's who you want to look after your home."
In his latest book, All You Need to Know About Buying and Selling Your Home, co-authored with wife Pamela, Yardney advises sellers to use local papers, signboards and the Internet to find the agencies that dominate in their suburb, and then identify the agents within them who make the most sales.
Invite these agents to your home to give you their estimate of what it will sell for, a marketing plan to sell it and details of the commission they will charge.
Don't choose your agent purely on the price they say they will achieve for your property because agents are often tempted to talk up the purchase price to win listings. Also don't see the commission figures quoted as set in concrete. Most agents will negotiate on commissions, especially if you offer a bonus incentive for achieving a better than expected price.
Overall commissions range from 1.5 to 3 percent of the sale price, plus GST. Generally, more expensive homes will attract a lower commission, Yardney says.
Real estate is a people business, so it makes sense to choose an agent who is personable as well as highly competent. Pick one who makes you feel comfortable and whom you trust, to have on your team, Yardney says.
Sydney real estate agent Steven Chen agrees. "You need to connect with your agent," says Chen, who is with leading agency McGrath. "You need an agent who can put himself in the vendor's shoes and ask 'If this was my property what would I do to sell it?'."
Once you have chosen your agent give him or her an exclusive listing for 60 days, as this will ensure they work hard for you.
But before you sign the agreement you need to have nailed down some details.
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How you are going to sell the property: auction or private treaty?
The timing of the sale. Do you need to get in a stylist or someone to do some repairs before you put it on the market? What legal documents do you need to prepare before you can sell?
The advertising and marketing campaigns and budgets.
The sales commission plus any extra costs.
Auctions work well with properties that have unique features, such as water views, says Chen. But properties in an area where there are a lot of recent sales of similar homes can be fairly priced for sale by private treaty.
In some areas, such as inner Sydney and Melbourne, auction is the usual method and works well, says Chen.
The other plus of auctioning is it sets a time limit on the marketing program. Even if the property does not sell at auction, most sell as a result of the process.
Before you go to sale, you will need either a contract or a vendor's statement, depending on which state the property is in. Your lawyer or conveyancer can help you with this.
Presentation is a crucial factor when you are selling your home, says Chen, who advises most vendors to use a stylist. "It's similar to detailing your car before you sell," he says. "If you don't present your home in its best light, it can throw out the wrong signal: is this home really well looked after?"
A third party can give an honest appraisal, says Chen. "Pet lovers rarely notice pet smells, but others, potential buyers, do," he says by way of example.
The cost of using a full-service stylist, which normally also includes hiring appropriate furniture, ranges from $3000 to $6000 but can add much more to the sale price, Chen says.
Yardney agrees presentation is important. "Most of us don't really see our home as it might appear to someone coming through the door for the first time." But generally he recommends the DIY route, devoting a chapter of his book to advising people on how to prepare their homes for sale.
"Spending a few weekends and a few dollars upfront might just result in you getting anything from $5000 to $50,000 more for your home," he says.
And he recommends that you use your selling agent as your fresh set of eyes to spot the problems. You can also use a stylist to get a written report on what needs to be done to your property and take it from there yourself.
Look up home stylists on the net and you will find it is a growing industry. For example, in Sydney, www.redesign.net.au provides a DIY service for $175. This includes an on-site visit, a written detailed checklist, trade and service contacts and colour selection if painting is required. A one-day service costing $750 provides additional services such as furniture rearrangement, de-cluttering and removal of some items.
In Melbourne, www.movinginteriors.com.au will provide a written appraisal for $120. Stylists can also provide a full-service restyling and refurnishing job typically costing $2000 to $2500 for a two-bedroom home.
Gardens are also very important, says Chen, who often recommends a vendor get in a garden stylist to bring in pots, hedges and other items to show a garden or terrace to its best advantage. McGrath has a list of recommended stylists and tradespeople that it makes available to its clients.
The main aim of your marketing program is to attract buyers who will be interested in your property, Chen says. This means if you have a relatively modest home you should not be sending out signals that the price tag is higher than it actually is. For example, taking out a full-page advertising spread in the local paper would be over the top for a home valued at about $600,000. "But if you have a grand residence, the full-page advertisement is appropriate and you should not spend too little," Chen says.
To capture all potential buyers, Chen says the marketing program should be a combination of the local paper, Internet, a 'For Sale' sign on the property and the major metropolitan daily on a Saturday, although this is becoming less important.
He estimates you need a marketing budget of $3500 to $5500 for a $600,000 property, and $7000 to $10,000 for a $1 million home.
As most people first see your home on the Web or in a newspaper ad, the quality of the pictures is very important Chen says. These must be professionally taken and well lit so they invite people to come and have a look.
Most auction campaigns run for about three to four weeks with at least weekly open houses, where your home must be absolutely spic and span to attract prospective purchasers.
First impressions are vital, but it's also worthwhile to make sure your home is always appealing while it is on show to encourage potential buyers to linger and notice the good points. "Nice soft music, pleasant smells and a clutter-free environment make people want to stay," Chen says.
For the complete story see Money Magazine's October 2007 issue. Subscribe now.
