House Vendor Confusion Leading To Losses And Disappointment
Property vendors who try to outsmart the market by holding out for the heady sales prices of yesterday are bound to come unstuck, a local Ray White real estate agent is warning.
Ray White Mairangi Bay real estate agent, Drew Miller, said today that mixed messages from commentators about where the market is going is leading to vendor confusion, indecision and, in some cases, cause financial losses.
"People hear that prices are trending down, then they read that some regions are recording record prices and they remember the price increases of the past and they end up making emotional decisions to hold out for prices that the market just won't support," Miller said.
"We have the same buyer pool as last year, but Miller believes that there will be many more properties for sale because some investors are getting out due to rising bank rates. Most investors are comfortable around a bank rate of 3-4%, but with interest rates now at 7% they're having to top up the mortgage, fix or sell because they don't want to subsidise mortgages from their own pockets."
He said the resulting vendor behaviour will be interesting to observe.
"Some vendors are meeting the market and selling, but there are some that are not meeting the market and holding out for top dollar. They will end up wishing they took the first offer because the longer a property sits on a market the more buyers will begin to suspect that there is something wrong with it."
Miller said that while prices are down 12.7% year on year, according to the Real Estate Institute of New Zealand, the last three years saw 30% increases. "This makes a 12.7% drop inconsequential in light of the fact that the vendor is still going to be 18% in the plus”.
He offers the following advice to vendors contemplating selling their homes this summer:
1. Do your homework
Ask you agent to compare your property to similar properties that have sold. This includes analysing the benefits of each one against your own property.
2. Ask for a comparable market analysis
"When you ask an agent for an appraisal, they will most likely utilise the comparable market analysis and be able to show you what prices similar houses in the area have sold at."
3. Make decisions from unbiased, factual information
"Some vendors think their real estate agents are just after a quick-fire sale, but that doesn't serve anybody. To give yourself piece of mind, make sure you get a written report from each open home what prospective buyers liked and disliked and how much they think your home will sell for.
"If your number resonates with feedback, then its honest information," Miller said.
For more information visit www.drewmiller.co.nz