I would like to elaborate on what I touched on in my previous blog: the importance of setting the right price for your home. Setting the right price makes the selling process much more enjoyable and helps get it done in a short time, compared to overpricing it and dragging the sale on for months, only to realise you still cannot sell it.

Start with your purchase price

A good way to determine how much money you want to get is to start by thinking about how much you paid when you purchased the property. Naturally, you want to get your money back and hopefully make something on top. If you are not getting your money back, then something has gone wrong. Perhaps you bought after Covid, when prices were flying, and now you want to sell two years later, when the market has gone down.

I read an article on OneRoof about an apartment in Remuera, which, from memory, was bought for $5.3 million and sold for less than $4 million five years later. That was not a good buy. If you are one of the unlucky ones who bought at the height of the market and now want to sell during a downturn, I can feel your pain. Unfortunately, unless you can afford to wait until the market improves, there is not much that can be done. You have to be realistic about what you can get in the current market conditions.

Factor in improvements

You know how much you have invested in your home, and you want that money back. If you have made improvements to the property, such as landscaping, tree cutting, building a swimming pool, or installing a retaining wall, you need to factor all those costs in on top of your original purchase price.

Do your research

To establish the right price, you need to do your research. It is all available on realestate.co.nz. All you need to do is log onto their website and go to the ‘Sold’ section. If a sale is very recent, it might take a bit of time for the price to be published, but it will eventually appear.

If there is a particular house you are very curious about because it is similar to yours, you can find out by contacting the real estate agent who sold it. Tell them you are thinking of selling too. They will likely be more than happy to tell you, and if you invite them over, they will be completely enthusiastic. They will come over and present you with what they call a Comparative Market Analysis (CMA), showing recent sales in your area, perhaps even on your street or involving your neighbour’s house.

I assume they source the CMA information from realestate.co.nz as well, so if you do not have time to research yourself, this is another way to find out. Call an agent, and they will bring a little brochure and tell you what they believe your property would sell for.

Why I cannot provide a valuation

This is something I cannot do for you, because to provide a formal appraisal, you have to be a licensed real estate agent. That involves completing a three-day course and working for a real estate company. Since I have not completed that course and do not work for an agency, I can only point you to where you can get the data yourself.

The same applies to open homes. I cannot hold an open home for you, and frankly, I would not want to. You are the best person to host your open home because you have the most accurate and relevant information about your property.

When buyers come to your open home, they will not be told, “I need to check with the owner and get back to you,” which, while not a terrible answer, still delays the process. It is better if you can answer on the spot.

Why weekend open homes matter

I have noticed an alarming trend recently. Real estate agents now often hold open homes on only one day of the weekend, either Saturday or Sunday. I was interested in an apartment in Ellerslie, but the open home was only held on Saturday. Since I work most Saturdays and have Sundays off, I missed the opportunity to view it.

This is a major problem. There are plenty of people who work Saturdays, so not holding an open home on Sunday means missing out on potential buyers.

Yes, agents often say, “If you called us, we would have shown you around any day.” The thing is, as a buyer, you do not want to appear too keen when dealing with an agent. I wanted to attend the Sunday open home along with the other visitors and pretend I was not very interested.

This new trend of holding open homes on only one day is sheer laziness. I would strongly advise my clients to hold open homes on both Saturday and Sunday, at a set time. I do not understand why anyone would pay a real estate agent $50,000 in commission when they will not even showcase the property over the entire weekend.

How to get an accurate valuation

I would like to believe that most people have a rough idea of what their property is worth. If you are not sure, it is worth getting a real estate agent to provide a valuation. They will be more than happy to do this, even if you do not intend to list with them.

You can still sell your property yourself, especially with the help of services like Corban+Dallas, or even entirely on your own if you know what you are doing and are confident enough.

Be aware of tricks agents use

When dealing with agents, there are a few tricks to watch out for. One is overvaluing your property to entice you to sign a listing agreement, making you believe you will get more money than you actually will. Another is undervaluing, though I am less clear on how that technique works. Perhaps it happens when sellers are desperate and the agent suggests a lower price so that when it sells for more, they look like champions.

I recently read an article about a land sale in Wellington after COVID. The sellers sold the land to a colleague of the real estate agent. What they did not know was that the colleague immediately sold it on, before the original transaction even settled, with an $800,000 margin.

It was blatantly obvious what had happened. When the sellers found out, they filed a grievance with the New Zealand Real Estate Institute. The whole affair was a shambles, with the agency pretending they had no knowledge of it.

The principal of the agency said the agent involved was no longer working there and claimed that things would have been handled differently had they known. It was nonsense. They knew exactly what was going on. The Real Estate Institute issued a fine of $5,000, which would have barely made a dent in the $800,000 profit.

Summary

When establishing how much to ask for your home, start with your purchase price, factor in all costs you have incurred, do your research, check what similar properties in your area have sold for (It is all available on realestate.co.nz), and do not be afraid to ask questions and seek help.