Can I withdraw property from market?

I have had my property on the market for 2 months and have it listed with my current agent for another 2 months. However I am not happy with what they are doing and wish to cancel the listing agreement. I want to withdraw the property listed with my current agent. Can I do this?

The best thing to do here is to have a meeting with your agent to discuss your concerns. The Sales Manager and/or licensee may also attend. If you cannot come to some agreement you can ask the agent to release you from the contract. Most agents will do this in order to retain goodwill. However if they refuse, unfortunately you always withdraw the property from the market completely until the Listing Authority has expired, then list with another agent.

I am 23 and really want to start a property portfolio as I see young people doing this all the time now, but it’s such a daunting goal. How do you get started?

Firstly, well done on making a decision like this at such a young age! You will retire in style! Best to start by getting yourself a good accountant or financial adviser, but don’t get talked into any investment schemes! If you want to stick to property be firm. Save a deposit, ensure you have a steady income, start small with little apartments, choose a good location, make sure your rental almost covers your mortgage payments and use the equity you build to try and buy a new property every one or two years!

 

I believe there’s a new website where sellers can control their own sale process and offers can be made online. I don’t suppose you agents like this very much, but what’s it like as a selling tool?

I do know about this new “platform” – it’s an eBay style system which allows vendors to bypass agents, and its introduction does not worry me one iota. Sellers have always been able to sell their property without a real estate agent, but most sellers still do use one. This is because there are so many downfalls to doing it yourself that it ends up costing more; real estate agents have and always will have greater means to get a far better price – they’ve got (or should have!) a database of prospective buyers to expose your property too, knowledge of market conditions and local property competition, presentation advice, negotiation skills and the admin support to handle the paperwork to ensure the transaction is tidy. I’d love this scheme as a buyer – I might be able to buy a property for thousands less than I was willing to pay! But it would really worry me to think that sellers might find this an attractive option. Also interesting that this scheme has been introduced by a mortgage broker…a disguised lead generation system perhaps?

 

Can you give me an approximate minimum number of years you should keep an investment property before you sell in order to ensure it’s a worthwhile investment?

This is a tricky question to give a general answer to as every situation is different. In the past, we expected property values to double every 7-10 years but we currently aren’t seeing that growth consistently. The question to ask yourself if you are considering selling your investment property is; has the property reached its capital growth potential? This will depend on the property, the location and whether any improvements to the property have added to the capital growth. Buying and selling real estate is expensive, taking in to consideration the property price, taxes and fees that we pay. That is why my philosophy is not to sell at all! To buy and hold, and use the equity to grow my portfolio – that is the real key to successful property investment.

 

How do I sell a tenanted property?

I need to sell my property fairly urgently and unfortunately there’s a tenant in there for another 8 months. Can you please give me some tips for selling a tenanted property?

The most important thing is communication throughout the process. Meet with your tenant in the beginning and talk them through the sale process. Let them know that you understand it’s not an ideal situation for them and will be considerate of their quiet enjoyment of their home. Tell them how much notice they will receive before inspections, and discuss presentation at these inspections – the better they present the property the more likely a quicker sale. If the sale process is extended over a longer than expected period of time, incentives and gifts can go a long way to appease your tenant for the disruption – a rent reduction or a cleaner may cost you some dollars, but it’s worth the cost to ensure your property looks as valuable as possible for prospective buyers.

 

Can I be fined for cutting down trees on my own block of land?

I’ve just bought a bowl-over job with the intention of clearing the land and building my dream home. There are 3 massive trees on the block which I assumed I could cut down being that the land is now mine, however a friend suggested I might be fined for doing so. Could you please tell me if what my friend is saying is true and if there’s any way around the issue?

Your friend is right in that people have been fined for cutting down trees on their own land. As far as I know it depends very much on the tree, the council and the circumstances. My advice would be to contact your local council and ask what their policy is for tree removal. If you decided to bring in the ‘tree fella’ and go with the “what tree?” strategy, it could get you a hefty fine.

 

How come they’re hardly any auctions in WA?

I’ve just moved over to Perth from Sydney and have noticed there are hardly any auctions over here. How come they’re so much less popular in the west?

According to REIWA only about 2% of properties are auctioned in Western Australia, as opposed to 25% in Sydney. So yes, there is a big difference! The most likely reason for this stems from the completely different sales processes (for private treaty and auction) in each state. REIWA developed the “Offer and Acceptance” form used for Private Treaty sales in Western Australia which has proved very successful – very straight forward, transparent and easy to add unique clauses. Media reporting of low auction clearance rates also plays a role in their scarcity – last rate reported by RP Data was 50% (usually only around 30%) out of only10 auctions for Perth, as against 57.6% of 446 auctions for Sydney. Both these factors act to perpetuate the preference of Private Treaty over Auction in Western Australia.

// 30 October 2012

After pruchasing a property I found that the floorboards has damage. Do I have any recourse to go back and re-negotiate the sale price?

I’ve just bought a property and arranged for possession prior so I could begin my renovation plans straight away. I’ve knocked down a wall separating the kitchen and living area and found that the levels are not the same and one of the floorboards has some termite damage. Do I have any recourse to go back and re-negotiate the sale price? I feel that this makes the property less valuable than initially thought as my renovations will now be a lot more expensive.

In my opinion you would have no recourse at this stage, but it depends on the clause you signed for Possession Prior. The standard REIWA clause clearly states that “At Possession date the buyer accepts the property on an “as is” basis and shall make no claim against the Seller or the Seller’s Agent for any repairs, defects, errors or omissions in respect of the condition or character of the Property or for any Loss incurred after entering into this Agreement”.

Will I have to pay stamp duty to add my wife to the title of my investment property?

I’ve just been married and would like to add my new wife to the title of my investment property as a joint tenant. Will I have to pay stamp duty for this? And if so, is there a way we can work it so that the duty will not be payable?

The stamp duty rules as they currently exist would state that stamp duty would be payable in your situation as it is an investment property. If it had been your own home and you wished to add your new wife to the title there would be no duty payable. It would also be wise to contact your bank to see how this affects any loan you may have on the property, and your accountant to examine whether capital gains tax might apply.

Hardly anything has an “asking price” anymore. Why is this?

I am looking to buy a property at the moment and have been keeping a close eye on what’s available, and I’ve been really frustrated that hardly anything has an “asking price” anymore. Why is this?

Over the last few years (apart from the last few months) the market has been quite slow, especially in the higher price ranges. A fixed asking price can chase away a lot of potential buyers, so agents have been using more open pricing strategies to attract more buyers to the property. However in my opinion agents should always give the buyer a “guide” to pricing, which is why we have adopted an “Offers Over” strategy which gives buyers a base figure.

Is this a good time to buy?

Hi Niki, could you please tell me what’s happening in the market at present? Things seem to be selling really quickly and there’s not much for sale. Is this a good time to buy?

In my view there is no better time to buy. The prices are still low, the interest rates are low and the rental rates are high. Because of this, investors are jumping back into the marketplace, as are first home buyers. Many people are opting to buy as it’s so expensive to rent and all this is creating competition which could cause a surge in property prices in the near future, especially if availability is low. So now is definitely a good time to jump in if you’re a buyer!

// 22 January 2013

How do I choose a good Buyer’s Agent?

I’m looking at buying another investment property but I’m really pressed for time at the moment. I’ve decided to hire a Buyer’s Agent to help me out but I’m just not sure what to look for. How do I choose a good one?

As you pay the Buyer’s Agent fee, you should definitely take the time to find the right Agent for you. Their role has the same objectives as a Sales Agent, but they are working for, and being paid by, the Buyer. Communication is very important, as you want someone who will carefully listen to and fully understand your needs. After all, they’re there to save you time so you only want them to show you properties that match all your requirements. If you’re not going to be able to achieve exactly what you’re after on your budget they should be able to advise you of this too. They should also have the expertise and knowledge to be able to research those elements of the property that are important to you, such as rental return or proximity to transport. Lastly, you want a Buyer’s Agent with fantastic negotiation skills. Negotiating the contract is where Buyer’s Agents can save you money as well as time.

 

Why can’t I have the keys until 12pm the day after the settlement?

The property I’ve just purchased settles at the end of the month and I’ve already arranged for the removalists for the day of settlement but my agent’s now trying to tell me I can’t have the keys until 12 noon the NEXT day! Why on earth is that?! Once it settles it’s mine!

Yes, once it settles it is yours, however if immediately prior to settlement the seller occupies the property they may remain in occupation until 12 noon the following day. This clause can be found in the Joint Form of General Conditions which you would have received when you signed up your offer. This is mainly just to give the seller time to finish moving out after settlement has gone through (after all settlement is sometimes delayed in which case the seller may have moved out unnecessarily). You need to rebook your removalists for the following afternoon or the day after that.

 

What am I supposed to be looking for in the final inspection before settlement?

My settlement agent has told me I must do a final inspection of the home I am buying just before I settle on it. What am I supposed to be looking for in this inspection?

A final inspection is really to ensure that the property is in the same condition as when you bought it, and to check that any conditions on the contract have been satisfied. For example, if the property had a lush garden when you put your offer in but the garden has now died, the seller must ensure it is returned to its former lush state. Also, if the contract states that all gas, plumbing and electrical items must be in good working order at settlement, you should check all the lights, powerpoints, taps, stove etc. If you find something is not working, the seller must rectify the problem before settlement can take place.

Is there a standard way of finding out how much your home is worth?

Is there a standard way of finding out how much your home is worth, or do you have to just rely on what real estate agents think it’s worth?

You can always get a sworn valuation on your property from a licensed valuer, however this tends to be conservative and does not include “emotional” aspects of the home which can affect its value in the marketplace. It is an inexact science at the best of times as each person will have a different idea of its “worth” – some people would pay hundreds of dollars for a collector stamp, others wouldn’t take it for free! Generally it is best to get 3 different market estimates from 3 local agents, as this should give you a pretty accurate idea of the range you are looking in.

What can I do to make my tenant application more attractive?

I have applied to rent 4 properties now and have been turned down every time. What can I do to make my application more attractive?

Well you’re not alone! The rental market is crazy at the moment – we’ve received up to 20 applications for some properties! Each owner is different in what they’re looking for in a tenant, but there certainly are a couple of things you can do that may make your application more attractive.

Be well presented at the home open – treat it like a job interview. Make sure the application form is completed neatly, fully, all documents are provided and everything is signed. Alert your personal referees to expect a call, and pay your option fee promptly. You can also offer to pay more rent than asking, or offer to pay rent in advance. Regarding the rental term, 12 months is usually the preferred period. Most importantly, don’t give up! Keep honing your application, submitting, and something will come through eventually!

// 6 March 2012

I received an offer much below my sales price. My agent say I should take it, what do you think?

I have my property on the market at the moment for $1,180,000. I have just received an offer after 3 weeks for $1,080,000 and my Agent is urging me to accept it because it’s a cash offer. I think the buyers have a nerve coming in this low and I can’t believe my Agent wants me to accept it so early in the programme. Shouldn’t they be working for me here?

Well obviously I don’t know the property, but I’d suggest that your Agent probably is working for you here. This is where not taking your first offer can cost you in the long run. You have just had your most opportune 3 weeks on the market and you have received just one offer within 10% of the asking price – this is not bad at all in this market. History shows that your offers will most likely go down from here. You can always counter the offer, but you risk losing your buyer. Cash offers are also hard to come by at the moment. So if you’re serious about selling, I’d be listening to your Agent’s advice if I were you.

 

Why do real estate agents get paid so much money?! I begrudge their huge fees!

Whoa – hit me between the eyes! Well the truth is that they don’t get paid bucket loads unless they are very, very good at what they do. And when they’re that good they are making a lot more money for their seller than they are for themselves which makes them worth every cent.

You see your property does not have a fixed price tag – along with the state of the market, your agent and their skills determine the worth of your home. Not all agents are the same!! Highly skilled agents will achieve a higher price; poorly skilled agents will cost you money even if they charge the lowest fee. In fact you should beware of agents charging the lowest fee for this very reason.

Many people are under the impression that agents get paid a lot for doing very little but this is simply not the case. In order to be successful, agents need to put in a huge number of hours – it’s certainly not a 9-5 job! If you average earnings over the hours worked, the hourly rate is not by any means outrageous, even for top agents.

What is happening in the property market right now? I seem to get a different answer from everyone I ask!

Well if you are getting a different answer it’s probably because you’re getting opinions not facts. So here are the facts, based on my recent experiences.

The property market around this state is gaining pace – we have certainly seen more sales activity over the last 3 months, likely due to interest rate cuts giving buyers more confidence. For the first time in a while we have seen competition for properties with multiple offers and some very quick sales.

Investors are predominant in the market place, and why wouldn’t they be? The rental market is strong and the returns being offered are very attractive. This coupled with low interest rates and reasonable house prices makes it a ripe environment for investing.

First home buyers are also stepping back into the market, which creates a ripple effect up the property ladder.

Generally the outlook for property tomorrow based on the facts of today is very positive. It’s always a safe investment over the long term, but especially when you buy in conditions like this.

// 1 May 2012

Can I check on the advertisements for my property before they go to print?

Hi Niki, could you please give me some advice here as I am a bit annoyed with my agent. We were asked to pay marketing money for the ads, which is fine, but I wanted to check on the advertisements before they went to print and also the choice of photographs and wording on the brochure. They basically (and quite rudely) said that I may as well sell it myself if that was the case. Haven’t I got the right to do this if I am paying for the ads?

Well as owner of the property you have a right to do whatever you want, however I think that the point here is that if you have engaged an agent to market the property there has to be an element of trust in that agent’s strategy. This is why the right choice of agent at the start of the selling process is critical! Remembering that the agent only gets remunerated on the successful settlement of the property, you’d think that they would be making every effort to sell the property. But it definitely pays to examine the marketing prowess of your potential agents before making a selection. Once you have chosen an agent you trust, my advice is to leave the marketing to them.

 

I bought a 1920’s home and a number of maintenance items needs attention. What is my position?

I just bought a 1920’s home and had a structural report and white ant report as conditions on my offer. The structural report has come back saying “structurally sound” but there are a number of maintenance items that need attention. I think the owner should have these fixed or at least negotiate the price to allow for these things to be fixed but my agent is telling me that this is not covered in the report. What is my position here?

Your position here depends very much on the wording of your structural report condition. If it is the standard REIWA “Australian Standard Pre Purchase Structural Inspection” form, this purely identifies any structural defects in the integrity of the building and is not a maintenance report. The owner would not be expected to fix any maintenance issues in a 1920’s home or to renegotiate the price in this case.

 

What are the repercussions if I was to discover something that wasn’t compliant after the purchase?

I’ve found a property I’d like to put an offer on but I want to make sure it applies to all building codes. What are the repercussions if I was to discover something that wasn’t compliant after the purchase?

First of all I need to clarify that building codes are not retrospective. Every now and then certain laws are created that require property owners to make changes to their properties to bring certain items up to compliance (such as pool fences, smoke alarms, RCDs) however general building codes created after the property is built are irrelevant unless you undergo a renovation or repair. If you plan to renovate the property and would like further advice I would suggest that you contact the Building Commission on 1300 489 099.

 

What can I do to get a successful sale in the winter months?

My kids have just left home and I’m ready to downsize, but I’ve heard that it’s not a good idea to sell in winter as the house won’t look as good and there are less buyers. I really don’t want to have to wait until the end of the year – what can I do to get a successful sale in the winter months?

First of all, winter is definitely not a bad time to sell! Yes, there are generally fewer properties on the market, but this lack of supply can translate to higher prices. Buyers’ motivations to buy don’t disappear during winter, so there are always going to be people looking for property. There are definitely a few things you can do differently in winter to get yourself a quicker sale at a top price. Firstly, keep the place nice and warm, cozy and inviting. Lighting is particularly important in winter – cut back any trees blocking out sunlight and make sure all your lights and lamps (including outdoors) are on for viewings. In terms of styling, you want to include warm colours and heavier, textured fabrics. Some cushions and throw rugs work wonders here. Outside, clean away any moss, rake the leaves and keep the garden looking as healthy as possible by trimming any dead branches.

 

What happened to the old system of a straightforward asking price?

Hi Niki, I want to know whatever happened to the old system of a house having a straightforward asking price that you could then negotiate on. These days it’s all these silly “Offers Wanted”, “End Date Sale”, ranges, and many other crazy ways of marketing so the buyer doesn’t know where they stand. What was wrong with the old way?

This is a good question and there’s no distinct answer. But I will give you my opinion. Because real estate lives in a free market environment, it has no firm recommended retail price. Properties, and especially homes (as opposed to investments), are worth different amounts to different people. By opening up the fiscal possibilities for a particular home you are able to attract a far broader group of buyers to view a property and hence end up with the best possible result for the seller. However I do support you in the desire to have some guidance as to the price a buyer will be expected to pay – I believe there should be an indicative figure in the price (for example; “Offers over $950,000”).

Is there a maximum amount of time a seller can take to respond to an offer?

My husband and I put an offer in on a property 10 days ago now and we still haven’t had an answer from the seller. The agent is equally frustrated that they won’t make up their mind. Is there a maximum amount of time a seller can take to respond to an offer?

There is no set time limit for an offer to be accepted, unless stipulated on the contract as a condition that it is only available for acceptance up to a certain time (at which point it is withdrawn). However a buyer can advise the agent that they wish to withdraw their offer at any time prior to being advised that the offer has been accepted without penalty. A seller that does not respond within a reasonable time runs the risk of a buyer doing just that.

What’s your opinion about buying an investment property since the interest rates are so low at the moment?

My husband and I are thinking about buying an investment property because the interest rates are so low at the moment and we like the idea of starting a portfolio. But I believe rents have dropped and may continue to do so. What’s your opinion?

Well my opinion about buying investment properties is that I truly believe it’s the fastest way to creating future wealth, so I highly recommend it as a strategy. However I don’t advise getting in over your head. I would suggest you do your sums and buy a property that is affordable, in a highly desirable area and shows a good rental return history. It’s true that rents have come down from the high of early 2013 but I believe they will level out now and possibly start to climb again toward the end of the year.

It’s worth noting that the rental market has a much more prominent annual cycle than the sales market, usually being a bit slower over the winter months, so a drop in rents is quite normal for this period of the year. The important thing is to always have a “safety net” – If you do your sums based on current rental returns and allow for a month of vacancy then you’ll be in good stead to pay your mortgage comfortably through the highs and lows of the market.

// 3 September 2013

 

I have had three agents in to appraise my home and they’ve all given me a different figure, opposite advice and they all charge different fees. How do I go about knowing who to choose?

This is a hard one to answer as I do not know what advice you have been offered, but feel free to call me direct if you have specific queries, or go to our website and get a free copy of my book which gives excellent advice. If an agent suggests you sell a home empty or not well presented – run a mile. If an agent offers you a very low commission rate – run a mile. If an agent suggests a price that gets you really excited – run a mile – as it is probably way too high and will cost you a lot of money in the end. Check out who is selling most of the property in your area, as they are probably the best agents to go with.

I recently bought a home and did the final inspection only to find that a few things weren’t working properly. For instance, the grill on the electric stove and a light fitting. I wasn’t going to settle until these things were fixed but my agent said I couldn’t hold up settlement because it was only a “warranty” that they would be working, not a condition. Is that correct? And if so, why even include such a clause in the contract then?

It does depends on how the offer is written, but many offers do say that the Seller warrants that everything will be working at settlement.  It’s true that you cannot hold up settlement if items aren’t working but there is an obligation on the Seller to have these things fixed – if not by settlement then shortly after. An alternative solution is to adjust the purchase price to reflect the cost of the repairs prior to settlement and arrange the repairs yourself.  This is offer the easier way around it.

The reason it is included is so the buyer doesn’t have to check all items before making an offer on the property. That is, so the property is in the same condition at the pre-settlement inspection as when they viewed it.

I am wanting to sell my home soon and wondered if it was better to list with a large real estate chain or with a local single office agency. What do you advise?

Great question! OK well at the end of the day large chains are mostly franchises, so they’re basically lots of small agencies tied together by a common brand. The most important thing to look for is a WELL ESTABLISHED AGENCY that has been in the area for many years, has a great track record and a large pool of buyers (which is something that takes years to build up). Check which agencies are doing most of the business in your area and speak to them. They will nearly always get you a quicker sale and a much better price.

“Offers Over” explained

We have recently been listing our properties for sale using an “Offers Over” pricing strategy. A lot of buyers and sellers have asked me about this marketing strategy, so let me explain.

No residential property has a “set value” – a property will be worth one price to one person and another price completely to someone else. So to place a set price on a property (which is usually above the sellers expectations) is not only saying “don’t pay me any more than this amount”, but also sets your buyers up to be disappointed with the home when they get there having judged it on the higher asking price. And we all know buyers have a strong dislike for the use of “Offers”, “EOI” or “POA” and will often skip over these properties with no price guide in their search.

So what better concept than picking a figure that the seller would not accept as a baseline and inviting buyers to offer what they feel it would be worth to them? This provides the ideal opportunity for a willing buyer and a willing seller to meet and agree on mutually satisfactory grounds. It does not mean that the seller has to accept any offer over the “Offers Over” price; it is an invitation to negotiate over this baseline figure.

I want to have a crack at selling my property privately, but I’m just not sure what features to focus on in my marketing. What are buyers looking for at the moment?

That’s a really tough question to answer without knowing anything about your property! There are lots of buyers out there looking for all sorts of things – some want character features, some want modern. Some want a big block with a yard, others want low maintenance. But whatever people are looking for, they’re always looking at presentation. Whether it’s an old or a new property, it needs to be clean and free of clutter. Dirt and mess signal that the property hasn’t been looked after, and no one wants to purchase disrepair. Also you’ve got to price your property for what it is – look at properties sold and for sale of a similar age, condition and style to yours and use that to set your price. There’s a buyer for every variety of property, as long as the price is right.

I’ve had a few agents come and have a look through my property and I can’t decide which one to go with. Can I list my property with more than one agent?

You can, by having an open listing rather than an exclusive one, however I really wouldn’t recommend it. There is no synergy in having more than one agent as they’re each working independently, and also in competition. At the end of the day, only one agent will get paid, and that will be the agent who can get you to take the lowest offer first, not necessarily the best offer out there. When you’ve got one agent, all your paperwork and marketing is being managed by a central hub – nothing is done twice or overlooked, and the marketing is consistent. The agent is aware of all the buyer interest in the property and is therefore in a much better position to advise the seller when it comes to offer negotiation. With an exclusive listing, other agents are still able to introduce their buyers to the property so you are not limiting your access to buyers. But don’t make your decision based on commission – go with the agent you feel offers you more knowledge, industry experience and a more impressive marketing plan.

I’m selling an old disused property of mine that’s really run down and ready to be demolished or seriously renovated. Do I still need to make sure there are working smoke alarms and RCDs in there? There hasn’t been electricity or water to the house for years so it would be really expensive and a bit pointless if the house is just going to be bowled over!

I would wait and see who buys the property and what their exact intentions are. If they are intending to demolish the home, they buyers can sign a form called “RCD Exemption in the Case of Demolition” on which the buyer signs to say they will be demolishing the home and therefore the sellers are exempt from having to make the property RCD compliant before settlement. The form also states that if the buyers change their mind and do not end up demolishing (for example they chose to renovate instead), then the onus is on the buyers to install the RCDs within a certain time. However if the buyer has no intention of demolishing then yes, you as the seller would be required to install RCDs, even if it requires significant work to the wiring of the property. Hard-wired smoke alarms have to be installed regardless of whether the buyers intend to demolish or not.

I’ve heard there aren’t very many first home buyers or investors around at the moment. I’ve got a small 1 bed unit to sell but wondering if I should wait until first home buyers and investors are active again?

It sounds like you’ve been reading media reports that are largely based on the eastern states markets. In WA, First Home Buyer numbers have been growing steadily since the Grant was introduced in 2000, and are still very strong at the moment with low interest rates and a recovering housing market being attractive conditions. Investor activity has dropped off a little as the huge number of properties available is resulting in soft rents. But in general, we’ve been finding that the bottom half of the market is turning over nice and quickly at the moment when the price is set at market value. If you’re not in a hurry to sell and require a certain capital gain, you could consider renting the property out for another 12 months and see where the market is sitting then. However depending on your situation you may have to factor in the mortgage repayments and interest you’ll be paying over that year, do your sums and see it it’s worth holding on to.

We have been tossing up whether to extend our current home or just sell and buy something bigger. We were a bit shocked at the quote we got to add an extension.

Interesting question – and I am now giving a different answer to this one than I did before 2006. Prior to 2006 I was encouraging people to extend their own homes to a) avoid the buying and selling costs, and b) to get exactly what they wanted. However, these days the costs of extending are so astronomical (as you have discovered!) that you are usually better off to buy something that was extended on redecorating to bring it up to present day. I extended my home in 2005 and it cost $320,000; today the same extension would cost around $850,000 – I rest my case!

Why is there such a difference in agents commission rates?

I am planning to sell my house and have had four agents look at it. They all said it’s worth a similar amount but there’s a big difference in their commission rates. Why is this? I thought it was standard.

There used to be a maximum scale of fees for agents, and most agents charged the scaled fee. Now agents can charge as little or as much as they wish, but it’s important that you don’t just chose the cheapest agent as they can, ironically, end up costing you a lot of money! You want the agent who has all the skills and tools to get you the top price in the current marketplace, so check out their marketing and sales strategy, as well as their results from marketing price to sale price, as agents are definitely not all the same!

I don’t want to lose money on the house by selling in winter. Should I hang on until spring?

I really want to sell my house now as I plan to move to Melbourne as soon as possible but I don’t want to lose money on the house by selling in winter. Should I hang on until spring when the garden looks really pretty?

My advice has always been to sell when it suits you to sell and not worry about other possibilities, as you can never second guess when that “perfect buyer” will be there. At present there are a shortage of properties which is good for a seller. That may change by spring and as long as the home is cosy, warm and welcoming – and priced appropriately – you will, I’m certain, get a great result. Then…Melbourne here you come!

How do I make sure my offer is the one that’s accepted?

I’ve put an offer in on a property and my agent says there are multiple offers. What do I need to do to make sure my offer is the one that’s accepted?

When you are in a multiple offer situation you only get “one bite of the cherry”, so it is essential that you put in your highest, cleanest offer possible to make it attractive to the seller. This includes such elements as your best offer price, as few conditions as possible and a strong deposit. The seller will no doubt have a number of good offers to choose from and will therefore be likely to accept the best outright rather than countering.

Should we put in a cash offer or go with a subject to finance offer?

My partner and I have pre-approval for a $700,000 loan and are looking to buy a property for about this amount. When we find a property we like is it better to put a cash offer in since we have the pre-approval, or safer to go with a subject to finance offer? What are the pros and cons of each option?

This is a great question because when there is a lot of competition for properties as there has been lately it is an issue that is often raised. If you put a cash offer in on a property you need to be 1.) absolutely certain that you are able to borrow the money, and 2.) confident that the bank valuation will be substantiated. Without giving any specific advice here, if I was borrowing less than 80% of the purchase price, had a pre-approval in place and was in competition for the property, I would put in a cash offer as this will nearly always be more appealing than a subject to finance offer. For the slightly faint hearted, you could always put in a cash offer with the condition that the bank valuation is satisfactory for the loan.

Should I choose a local agent or a friend who works as a real estate agent?

I’m planning to sell my property in Wembley in the next 6 months. My partner’s friend works as a real estate agent in Belmont and recently told us to make sure we come to him for the sale, but I’m more keen on getting a local agent to sell it. Do you think having a local agent is important, and if so how can I tell my partner’s friend we’re going with someone else without upsetting the friendship?

Generally it is always better to use a local agent as they have the buyers for that area, they are very familiar with the locality and they know the properties that are in competition. I would suggest discussing it with your partner’s friend and explaining the reasons why you’d like to use a local agent, emphasizing that it’s nothing personal. The friend should understand the benefits of choosing a local agent and therefore hopefully not allow it to affect the friendship. My personal opinion is that you are more likely to lose a friend by doing business with them than by not doing business with them!

An agent that appraised my property said he’s got a buyer that will buy my property. Should I advertise the property to see if I can maybe get more?

I’m preparing to put my property on the market at the moment and one of the agents that appraised my property said he’s got a buyer that will buy my property for $965,000 which will save me the hassle and cost of marketing (apparently it’s exactly what they’ve been looking for). The estimates of the other 2 agents were around this mark too. I don’t know whether to take the $965,000 or advertise the property to see if I can maybe get more. What would you suggest?

I would still put the property on the market, particularly with the way the market is at the moment with more buyers than sellers, putting sellers in a strong position. If these people are genuinely interested then they can put an offer in after it’s all prepared and looking its best. Putting it out to the market will create a fair competitive environment by allowing other people the chance of putting in an offer too.

During final inspection a few things weren’t working. Can I hold up settlement over this?

I bought a house recently and during the final inspection found that a few minor things weren’t working. One of these was a burner on the gas oven and another was the lights in the range hood. My agent told me that I could not hold up settlement over this even though the seller warranted that everything was in good working order. Is this correct?

Yes it is correct, as that warranty was from the seller and not a condition of the contract. So holding up settlement is not an option. If the seller is unable or unwilling to fix these things before settlement I would negotiate the price to allow you to do this yourself after settlement.

Should we buy now or wait for the market to change?

I’ve heard that there are very few properties on the market at the moment and lots of buyers so we’re not sure if we should go out and buy another property now or wait until things calm down a bit. What’s your advice?

This is getting a little into crystal ball territory but I don’t think that there are any real indications out there that would make the prices of properties go backwards. So if I was in your shoes I would be buying sooner rather than later. Prices have not moved significantly for the last 6 years and the pressure on the market now is quite likely to drive prices up rather than down in my opinion.

// 14 May 2013

I signed with an Agent, can I now use a different Agent?

I have recently signed with an Agent to sell my property but for various reasons would now like to use a different Agent. Is there any way I can do this? We haven’t done any advertising for the house yet.

If you have signed the listing with the first Agent you will have to get that Agent’s permission to release you from that contract. Obviously he or she will be reticent to do this, especially if there is not a specific reason for doing so (eg lack of performance), but they may agree to do it in order to retain good will. However, if the Agent does refuse, then you will either have to keep working with the initial Agent or withdraw your house from the market for the period of the listing (usually 90 days). Another alternative is to use both Agents in conjunction, but you will still need to get the first Agent to agree to this.

What is allowed at the final inspection when selling a house?

I have just sold my house and had the final inspection with the buyers, and was really taken aback when the Agent arrived with the buyers plus an army of relatives, friends, an electrician and a builder who then proceeded to crawl all over the house and in the roof. Is this allowed?

Well, no the buyers have no right to do that at a final inspection and that is stated in the Joint Form of General Conditions for the Sale of Land. A buyer can bring a maximum of 2 people with them but any building inspections of the home must be carried out prior at a time stated on the contract. The final inspection is simply to determine that the property is in the same condition as when it was purchased, and that the included appliances are in good working order.

Our pergola isn’t approved, do I have to tell the agent?

I am about to sell my home and was asked by an agent if everything on the property was council approved. I know that our pergola isn’t approved, but do I really have to tell this to the agent? I’m scared it might put buyers off.

The answer to this is simply “yes” – you do have to let the agent know otherwise you risk being taken to court after the sale. You will in any case be asked to fill out a Sellers Disclosure Form which will have that question on it. I would recommend that prior to selling you go to your local council and seek retrospective approval for the structure. If all is approved then there is no need to disclose it was built without approval.

Is it expected to contribute to the advertising costs when selling a property?

I haven’t sold a house for quite some time but was really surprised when I was asked to contribute to the advertising costs. Is this “the norm” these days? As I remember it, this was included in the commission.

Yes this is very much “the norm” these days as the advertising is a lot more sophisticated and costly now than it was a few years back before the internet. Gone are the days of 2 line newspaper ads saying “Character home close to shops and transport”! The commission payment is for service, advice and expertise that you receive throughout the sale of your home and is only paid on a successful result. The marketing cost however pay for the tools required to give your home the maximum exposure to find your best buyer.

We want to downsize in about five years’ time – would you recommend we wait until we are ready or buy new and rent it out?

Well, every person’s situation is different but, generally, I would recommend that you buy now, rent it out and negatively gear it (to use the tax advantage if you’re still working). If prices rise (as they are predicted to), you will have a capital gain in both properties, putting you in stronger financial position later on. However – and I stress this – before making any moves at all, speak to your accountant or financial planner to make sure this plan suits your financial circumstances.

 

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