Guidelines

A-Z of Real Estate Part Two

Marketing-

You are selling your most expensive asset and you want the world to know.  Maybe there is one more person you could reach, who loves your house and will pay a little more.  You must be prepared to spend a little to make a lot.  You can’t sell a secret.  Marketing campaigns in Sydney can cost $15,000 or more.  On the Central Coast, you can expect to spend between $2,500 and $5,000 for a reasonable marketing budget.  For a quality home you should consider upping that marketing budget to $10,000.  An extra commitment of $1,000 here could reap you ten times that amount. 

Negotiating-

This is where your real estate agent makes- or costs -you money.   No one ‘gives’ away your home but a good negotiator can put an extra thousand or two in your pocket.   Or ten.  Or twenty.  Or more. Buyers must also feel they are happy to pay the price and a good negotiator will ‘feather the edges’ so both parties win.

Open house-

A necessary evil or a really great way to introduce your home to prospective buyers?  Yes, you might get some sticky beaks or local nosey parkers, but who cars?  Your home is neat and tidy and looks its best, and they might just tell their colleague at work.  I think open houses have value for most properties and allow buyers to look at a home ‘anonymously’. 

Professional photography-

Please oh please get a professional to do this.  How do you expect to make a million if you won’t spend $500? Most clients these days are also choosing to get a lifestyle video to help their property stand out in the crowded  market.

Qualifications-

Is your agent fully licensed, or do they at least hold a Certificate of Registration? This may not be something people think to ask, however it is imperative your agent is qualified to sell your biggest asset.

Realestate.com.au vs Domain.com.au-

Typically Domain attracts out of area buyers and realestate is more likely to attract local buyers. This is slowly changing as local buyers get behind realestate.com.au. Personally I advertise on both, because who wants to miss out on that one buyer who might pay $5,000 or $50,000 more? 

Stamp Duty (also known as transfer duty)-

The very annoying tax paid to the government on the purchase price of the property, paid by the purchaser.  Its a variable calculation and there are online calculators, but to offer an example,  stamp duty in NSW on a $800,000 property is $31,490 as of Sept 2018.

Target Market-

The buyers we want to target for your property.  If your home would suit as an investment or holiday home, or needs lots and lots of work, we need to target the buyers who would pay the most for this type of property.

Underquoting-

Is just bad for everyone, and illegal. Under quoting means an agent is advertising a property for less than market value. This practice of underquoting can cause interested buyers to waste time and money on inspecting properties, getting reports and attending auctions based on misleading estimates of the selling price 

Vendor-

A fancy word for seller. Which comes from the Latin, then French word to sell, Vendre.  

Walk through-

A final visit to the home by the buyer, just before closing the deal. The property should be in fundamentally the same condition as when you originally saw/purchased it.

eXchange-

A formal legal process creating a binding Contract of Sale. Conditional (with some terms to iron out) or Unconditional (committed, baby), once both sides sign, and the contract is dated, you are exchanged.

Yield-

A term for investors- how much annual return you are likely to get. A prospective year’s rental income as a percentage of the property cost.

Zoning-

A tool controlled by local planning authorities or council to control future development. Permissible uses in the area, density of building for instance.

For part one of everything real estate, click here!

A-Z of Real Estate Part One

Agency Agreement –

The legal document binding you to your chosen agent.  Can be for any period of time and can be exclusive or open.  Typical in 2260, agency agreements are for 12 weeks and generally exclusive so you work with one agency but everything is negotiable. 

Buyer –

What it’s all about!  Finding the best buyer for a property, one who might pay a premium and accommodate the sellers’ terms and conditions.  Where will you find your buyer? 

Contract –

Prepared by a solicitor or conveyancer and must be obtained prior to listing the property for sale.  The front page will be completed except for the buyers information and the price paid.  Your real estate agent will provide a copy of this to any prospective buyers. 

Décor –

There are plenty of companies around to help you stage a home and a good staging company can put thousands onto your end sale price. You want to try to appeal to a broad spectrum so neutral colours are best.  You might love the purple wall, but we are not trying to appeal to You.  We want someone else imagining themselves living in the house. 

Exclusive vs Open –

legally binding agreement between seller and a real estate agency.  Do you want one agency overseeing your sale, or to open it up to multiple companies.  (p.s. – you want one!)  An honourable exclusive agent will always offer another agency the opportunity to bring through their own buyers. 

Fee or commission –

This is negotiable but really depends on your area and local customs in that area.  Don’t expect to get the best agent in town and then undercut their commission.  This person is about to negotiate on the price of your house!  Do you really want to pay peanuts (and get a monkey?) In California the fee is typically 5% or 6%. In London it ranges from 1.5% – 4%.  On the Central Coast it ranges from 2% – 4%.  Bear in mind that ½ % difference in commission for the right agent might ultimately put more in your pocket. 

Gap –

The difference between the buyers offer and the vendors expectation-and our job as agents is to close the gap. A good agent will negotiate a buyer UP to the vendor and not just sign paperwork at an unrealistic amount in order to secure the listing.

Handover –

When settlement occurs (typically after 42 days) the real estate agent receives legal notification from both buyers and sellers solicitor.  This is permission to release the keys to the purchaser and the deposit to the vendor.

Interest rates –

Shouldn’t affect your purchase.  1 or 2% difference in RBA rates should make little difference to whether you buy property.  Rates will fluctuate, your long term plan shouldn’t. Get a bigger picture and plan for your future. 

Junk –

Get rid of it!  It’s a great opportunity to have a clear out and no one can imagine living in your property if all they can see is knick knacks, old magazines, broken appliances or any other junk. Carol can advise if necessary.

Keys  –

When selling, you will need to provide a copy of your keys to your agent and those keys should be kept securely locked in the real estate companies key safe (withOUT your home address on them!)  When you purchase, some families  consider changing the locks for their own peace of mind.

Loan –

Make sure you have already spoken to a mortgage broker before you go house shopping.  You should not have to pay a fee to a reputable mortgage broker, and they should find you the best lender for your particular circumstance.  Ask Carol for recommendations.

For part two of everything real estate, coming soon!