If you are thinking about selling, try and time your campaign so that your house is for sale at a time when there’s not much else out there. This way, you have less competition for the attention of buyers and are more likely to obtain a premium price.
You will also need to consider what sort of budget you have to work with and what sort of value a major renovation would add to the property. For a more detailed analysis on this, click here to request your complimentary copy of Top 10 Property Selling Secrets – The essential home seller’s resource.
If you are an investor, selling a property that has tenants occupying can often be a tricky business. Some tenants are lovely people and are more than happy to cooperate – However some tenants you will find to be extremely difficult. Access is a constant problem, and often they will not make any effort to clean or present the house for buyer viewings, which will impact your chances of a sale and the price you will most likely get.
If you have a difficult tenant, then it is best to evict them prior to marketing. This will give you an opportunity to fix the place up a bit and hopefully increase your potential sale price. It will also ensure your agent has access to the property whenever they need it.
If you do decide to sell the property vacant, you then have to deal with the conundrum of not deriving any rental income from the property. If there is a mortgage in place, and the interest payments are dependent on the rental income, this could present a serious cash flow problem for you as you are responsible for making up the payment from elsewhere.
Firstly – If you have not yet obtained a contract of sale for your current property, then it is likely the owner of the house you’re buying will want what’s referred to as a “sunset clause” in the contract. This basically entitles them to continue marketing the property and encourage other offers. If a better offer comes along, then they reserve the right to pull out of your contract and accept the other offer. This essentially means that until you sell your existing property, the house you’re trying to buy is still technically on the market. Be prepared to suffer the disappointment of having the house you’ve fallen in love with taken away from you by another buyer.
The other pitfall with trying to buy subject to sale, is getting the owner of the property you want to buy to even consider your offer in the first place. Subject to sale contracts have a large degree of uncertainty attached to them, and with no definitive time-frames on offer you may find sellers of properties you like won’t even be willing to negotiate with you until such time as you sold your existing house. Once again, going about things in this fashion may be setting you up for a major disappointment.
The other options you’ll have are to either sell your property prior to going out looking for a new one, or approach your bank to arrange what’s known as ‘bridging’ or ‘relocation’ finance. This is where your bank agrees to finance your new home purchase prior to you having sold your current property. You would then be given a certain amount of time to sell after you have moved into your new place, which takes a lot of the pressure off. The only catch is that it will cost you to do this – bank fees for relocation finance can be quite expensive, so be sure to do your research around this.
Depending on a number of factors, most agents charge anywhere between 2% – 3.5% of the sale price, although there are agents who will charge both lower and higher rates. It is important to remember that the advertising costs or “Marketing Investment” will often be a separate component of the agent fee structure. This is sometimes paid upfront, other times at settlement but normally this will be in addition the the commission.
It is important to invest in marketing your property to ensure you are giving yourself the best chance of getting the best price. Well marketed properties tend to sell in less time and for higher prices and a simple $2000 investment could mean an extra $10 – $15k on your bottom line if it helps you find the right buyer.
Besides – The best real estate agents naturally gravitate towards companies with more prosperous fee structures, where they are paid well for their efforts – Fixed fee companies are essentially the antithesis of this and so by engaging one it is unlikely you are getting a highly skilled agent working for you.
Most importantly, if there is no sale, or if you change your mind and take the property off the market, the agent makes no money from the transaction. In fact, they have lost money simply due to their investment of time and resources for no return. If the marketing costs have not been paid for, then they would then be left not only with no fee, but they would also have to pay the advertising bill out of their own pocket – No matter which way you look at it this is just bad business.
Think of it like this: If you had a plumber out to install some pipework in your back yard, his quote would certainly have two components: Materials and labour. Often, you would be required to pay a deposit of up to 10% to ensure the cost of the materials at the very least were covered. The plumber makes no money from the costs of the materials or parts, he makes money by completing the job and being paid for his investment of time and expertise.
Selling your house is very similar – You pay one fee for “Materials” and another for the completion of the job.
If you do want to go it alone there are numerous companies out there who cater to this and can help you get your property advertised with a minimal outlay, but from that point on you’ll normally be taking your own enquiries, handling your own inspections, conducting your own negotiations and executing your own paperwork. Make sure you’re comfortable doing all this before you decide to try selling privately.
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