Sell Property Tips

A house has two functions, it is a cosy, comfortable home when you decided to stay in it. However, it becomes an investment the moment you decide to sell it.

Ideally you want to sell high and buy low, but unless you are an investor, this is not always practical. However it does help to be aware of the economy because changes within local and national markets can affect property prices and the cost of living in general. For example, when the economy is doing well and interest rates are low, demand for property is generally high and this in turn pushes prices up. By the same token, when inflation is low, investors may be more attracted to the stock market that could also lower the demand in the property market. Industry successes and failures can also have a knock-on effect - the closure of a factory could mean the loss of jobs and hence a dive in house prices in a particular region.

Setting the Price

Location, demand, economy
The best way of knowing the true value of your house is to have an independent valuer to give you a valuation. They are skilled professionals who are legally liable for their services and have no financial interest in the sale. You can use this valuation against the appraisals given by the agents you are considering hiring to see how accurate the agents have been in their assessments. A good agent should be well aware of what similar houses in your area have sold for in recent months and can also access market analysis information that gives data on local properties that have sold or failed to sell, including the asking prices. Ask your agent to go through this information (usually called a Comparative Market Analysis) with you to show how they have arrived at the price they are suggesting. The agent (and therefore you) will also need to consider market conditions in terms of buyer demand, interest rates, inflation rates and any other factors affecting the economy. If changes in the economy are influencing the way people are spending, the property market is likely to be effected in some way. Your potential buyers too, should also have a fair knowledge of your house's worth, probably having seen every other house for sale in the area. Be aware however that it is in their interest to get it a lower price; so don't feel pressured into accepting a low offer.

Word of Advice: It is likely that you will receive varying recommended prices from the agents you invite to make appraisals. Don't immediately take on the agent who gives you the highest price. Some agents use this as a tactic to attract more business, however if you list your house at an over valued price, it may lose you valuable time in making the sale. In the meantime, you may get desperate enough to drop your price thus giving the dishonest agent the fee for a sale that could have been made months ago by the fair practicing agent.

Aim for the right buyers
Once you have set the price for your house you need to aim to attract the buyers who are able to afford it. Some techniques may attract many people to view your home, but this does not necessarily mean they are the right people. For example, if your agent has listed your house in a price range which begins much lower than its true value (say from $300,000 when it is worth 350,000), the people who will be interested will be those hoping to pay only the lower amount. If you only have offers for the lower amount, you may eventually be persuaded to accept a much lower offer than you could have received if you had aimed at people who can afford the full price (or more). Remember that attracting more viewers may give you more offers, but if you want to sell your house for what it's worth you need to aim for people able to pay your price or above. Quality is certainly better than quantity when it comes to finding potential buyers. If you have a good agent and trust them to get you the highest possible price, be patient and wait for an offer you will be happy with.

What's my profit?
Once you have a good idea of what your asking (or reserve) price will be, it's time to sit down and do the figures. You will want to have as accurate an idea as possible what you'll have left after everyone has been paid. Start with the lowest price you are willing to accept (though hopefully you will receive more than this) and take away the agent's commission, advertising and marketing costs, conveyancing fees, improvement costs and moving and relocation expenses. If you intend to pay off your mortgage or another loan take away this amount too. If you are buying elsewhere, there'll be many more expenses to take off as well, including the price of your new house, stamp duty, surveyor’s fees, conveyancing and so on.

Preparing Your Home

It’s Showtime. The curtain is about to be raised. Your potential buyers are on their way. But wait… have you done everything to achieve a successful sale.

Remember Murphy’s Law – ‘Anything that can go wrong, will go wrong’. Your job is to ensure that this does not come to pass. Instead, you should be striving for ‘everything went well…’

This is an important task because you may not have the luxury of a second chance to correct a negative first impression. Buyers will form an opinion of your house in the first few seconds of their visit and they will incline to reinforce their opinion as they continue to view the house. Your house should not only be in the finest possible condition just before the viewing, but should remain that way until it is sold. It’s always possible that a last minute viewing by a prospective buyer will end up as a sale.

Empathizing with buyers
The key to buyers’ heart is empathy. What you perceive does not matter. It is what the buyers feel that counts. They determine the sale of your house. Looking at your house through their eyes will help you be more objective in determining what needs to be done to get a good first impression. Do note that while buyers evaluate logically, they buy emotionally. Ultimately, it is not just the logical justification for the investment, but the ability to see they living in the house that will lead to a buying decision. Buyers should have a ‘good to be home’ feeling when they enter your house.

Help buyers come to a decision
It would be a good idea, for example to remove your car from the porch or any other big objects, to give buyers a clear view of your house. This will facilitate their external evaluation of your property. Keeping pets and children away during showtime would further aid you in the process of selling your house. This will ensure that buyers are not distracted by the presence of barking dogs or noisy children.

Providing Virtual Tours of your property will help buyers able to view it as many times as they want without disturbing you. It must also show photographs to highlight the attractions in the community, including existing and potential developments.

Importance of a positive ambience
Your home should also have a positive feel about it. Buyers should be greeted by a welcoming ambience. It is important to appeal to all the senses when selling your house. Enhance the buyers’ mood by cooling your house and providing soothing background music. Even the smell of the house should be pleasant and refreshing. To appeal to their visual senses, display decorative lightings and beautiful pictures in addition to waxing the floor and polishing metal finishes.

Stand out from the crowd
When you market your house in a highly competitive market, do not make the mistake of being a frog in the well. Most buyers will see more then ten houses before making a decision and these days they are certainly spoilt for choices. Make a point to study open houses and show flats, plus interior decoration magazines and other publications. There are lessons that you can learn to help you improve your house and enjoy better returns. As you are preparing for your house, be guided by the principle that every part of the house must tell a story of benefits. More importantly, look out for the negative elements and remove them. Buyers tend to be sceptical when viewing houses and if they find something amiss, they are inclined to think that there will more things wrong with it.

Develop a checklist
Once you have gathered the ideas, develop a checklist and prioritize what needs to be done. Begin preparing your house from the outside. This is important because many a sale has been lost even before the buyer stepped into the house. The curb appeal, in other words, the external facade of the house sets the tone of the viewing. Prior to every viewing, check to ensure your house is ready and that nothing is compromised. If the house is not ready, request for time to dress up the house. It is better to lose some time than to lose a potential sale.

When you dress your house correctly and continue to improve upon it, there is no reason why success will not come knocking on your door soon. Remember! To be a seller, you have to look at your house like a buyer.

Showing Your Home

Prospective buyers never buy a house ‘cold’. They want to see the house, inspect it, ask questions and satisfy themselves that it is the best choice. The presentation of your house should therefore be a Positively Overwhelming & Memorable Performance or P.O.M.P. for short.

Buyers usually come with pre-conceived ideas of what they are looking for in a house. They always have a mental checklist in their mind to help them arrive at their decision. The P.O.M.P. must therefore address issues that will help the buyer decision to buy your house. You have to look at the whole selling process through the eyes if the buyer. What you show is not as important as what the buyers perceive. Perception is king and as sellers, you must manage the perception of the buyers.

The P.O.M.P. can be divided into 5 stages and requires you to address several key issues to ensure a successful sale.

Stage 1: Preparation Stage
- How to make your house more attractive and appealing?
As mentioned in the preparation your house for Showtime, the objective of this stage is to create an emotionally stimulating environment to the buyers. The goal is to give them a ‘welcome home’ feeling and convince them that this is where they will enjoy the comfort and pleasures of life.

Stage 2: Probing Stage
- What are the needs and behavioral patterns of the buyers?
You have to understand the motives, wants and personality of your buyers. Only then, you can help them realize the value and benefits of your house better. You must uncover the needs of the buyers - a process similar to peeling the layers of an onion to see if the buyer matches the following ‘F.R.I.E.N.D’ ly criteria.

Finance: Do the buyers have the money to buy the house?
Responsiveness: Are they willing to discuss and cooperate with you?
Inclination: How motivated are the buyers about buying your house?
Eligibility: Are they in a position to buy your house?
Needs: Can you meet their needs and requirements?
Decision: Will they have the authority to make the decision?

Stage 3: Presentation Stage
- How to convince the buyers to buy your house?
Falling in love with a house is like falling in love with a person. It is better if the sellers are “unobtrusive” during the presentation of the house. This will make the prospective buyer feel more relaxed and be more open about sharing his or her opinions after viewing.

Stage 4: Prevention Stage
- What prevents buyers from buying your house?
Life, including the sale of your house, is not a bed of roses. You must expect buyers to raise questions, doubts and objections. It is part and parcel of the decision making process. When prospective buyers raise concerns, it is an indication that they are interested in your house. The best way to remove a concern is to prevent it. To do so, you need to apply the 3 P’s strategy. You need to pre-empt a buyer’s potential concerns prior to meeting him or her. You need to prepare the appropriate responses and if necessary, respond to them proactively.

Stage 5: Position Stage
- How to make the buyers believe (logic) and feel (emotion) that your house is the best choice for them?
You will do well to remember the words of Sun Tze, the famous military strategist, ‘Know your enemy…’ Why? Because prospective buyers will visit other properties and make comparisons before deciding to buy a house. It is therefore important for you to visit and study other show-flats and properties, especially those that are in your neighborhood, so to ensure that your house is well positioned to achieve success.

The Art of Negotiation

Negotiation is the process of influencing buyers to purchase your house at the best possible price, terms and conditions. It is not a platform to obtain everything you desire, however, if you plan carefully and negotiate effectively and efficiently, you can achieve the highest possible price for your property.

The following are some negotiation tactics to help you achieve better success.

Plan for success
Before entering into a negotiation, you need to know what you want and how you can potentially achieve it. There is no point in closing the sale only to find out later that you have lost much money in selling the property at the contracted price. Therefore, make sure you have done your homework on your property financial calculation in the beginning so as to achieve your desired results.

Always negotiate face-to-face
This is the best way to size up buyers and promote the value of your house. If you negotiate over the phone, it is easier for buyers to say “No”. They can also change their mind before they sign on the dotted line.

Set the stage
Always choose on appropriate time and place to negotiate with buyers. It should be ideally occur when they are in a good mood, not occupied with other matters and are in a position to make a decision.

Prepare yourself
An unprepared mind and uncontrolled emotion can kill the sale. If the atmosphere becomes tense or negative during negotiation it will not help to bring the sale to a close. Worse still, if there are disputes in which careless words are spoken, it may even kill the sale completely.

Negotiation is power play
You should try to negotiate from the ‘superior’ ground. The party with lesser power, real or perceived, will find their position being eroded over a period of time. Power in negotiation is centered on your character (who you are) and competence (what you can do). To be successful, you should be able to build positive relationships, earn the right to be listened to and even be trusted. You need to be skilful in communicating to and persuading buyers to accept your offer. Project an image of professionalism and reliability. In addition, be pleasant at all times without being perceived as a pushover.

Negotiation is psychological
If you are not convinced about the selling price, do not expect to be able to convince others. You will only get what you believe, desire and deserve.

Negotiation is a management of perception
There is no need to be perfect to command the best returns although it helps. More importantly, you need to know how to influence buyers’ perception about the value of your house. From the dressing up of it to the presentation, you need to communicate the advantages of the house and help buyers perceive the tangible improvements that it will make to their lifestyle and returns on investment. The principle is: The more they want the house, the more they will pay for it. Generally, there is an upper limit to the fair market value of your property so aim high – this will at least leave room for negotiation. However, do not set too high a price. It will deter genuine buyers and possibly make them feel insulted.

Stretch the deposit
When a deal is agreed upon and the option form is signed, it should be accompanied by a non-refundable deposit (also know as option money). The sum of which should be large enough to deter buyers from defaulting it should also cover the cost for removing your property from the market.

Never reject an offer outright
Do not close the door permanently. Like fishing, always have a ‘bait’ to attract buyers to review and improve their offers. Throughout the process, you need to be patient and be sensitive to every move of the buyers.

In conclusion, remember that all of us will have to negotiate something during our lives. It can be an educational, exciting and enriching experience. If executed correctly, it can help you get what you want not only in the selling of property, but also in other areas of your life be it business or leisure.

Closing the Sale

If you have done a good job in preparing and presenting your house, you will soon have a buyer who is interested in talking to you about buying it.

Successfully closing the sale depends on how you relate to, negotiate with and close the prospective buyer.

Work with genuine buyers
This sounds like an obvious statement if not for the fact that many sellers have invested time and effort in their prospective buyers only to realize they are property ‘tourists’. There are many reasons why these pseudo buyers view properties: curious; getting furnishing ideas; looking for out-of-this-world buys; establishing a negotiation position for offers to other properties; and because they have noting better to do.

*NOTE: Using Virtual Tours for your property showing can minimize this inconvenience, as prospective buyers are pre-qualified. The agent will analyze the sincerity, motivation, credit-worthiness and co-operation level of the buyers to ensure only the genuine ones negotiate with you.

Analyze the offer
When the prospective buyer makes an offer, make sure that it is not just a verbal offer to one that is not legally binding. The following are factors to consider in a Sale and Purchase Agreement, Option Money/ Deposit, Price, Terms & Conditions and Contingencies, i.e. stipulated conditions that must be satisfied before the sale subject to approval for financing from the bank. The above factors should be justifiable, reasonable and, not detrimental to your interests. If in doubt, consult your lawyer before responding to the buyers. Remember, the best offers in the world will mean nothing if the sale is not completed.

Evaluate your options
When an offer is made, you can accept it, reject it, hold on to it for a mutually agreeable or reasonable period of time, or make a counter offer to the buyer. Take time to analyze the offer and consider the consequences.

A word of caution: while it is the hope of every seller to get the best returns, it is wise to note that there may be valid reasons why you cannot have everything you want, for example, a sudden increase in interest rates may change the equation foe the sale. Ultimately, it is the market that determines the selling price of your house and NOT what you think you should deserve.

Build bridges with your buyers
Negotiation is about working with and through people. Your negotiation position will be stronger if you understand the objectives and motivation of the buyers. It also helps to move the sale forward if you listen effectively (always ask “Why?”) to the buyers’ objections.

Counter the offer effectively
A counter offer is a two-edged sword. It can get you the price you want or lower the price than what the buyer is prepared to pay. The deal may also fall apart if the counter-offer is perceived as being totally unreasonable. It is always better to negotiate face-to-face with the buyer as you can test the motivation level of the buyer and the price they are willing to pay. In a counter-offer never bargain for ‘small stuff’. By giving a little, you make the buyer feel a sense of victory and it will help close the sale. If you don’t, it may trigger them to reject the sale. This is because buyers are usually anxious and worried about making a wrong decision, and may be looking for a reason to back out from the deal.

Prepare a comprehensive inventory list
When a house is sold, it is usually sold with its permanent fixtures. These include anything that is fixed, built-in, extended from or deemed to e an integral part of the house. To avoid any misunderstanding, disputes and potential litigation, it is advisable to draft out a comprehensive list of what goes with the sale.

Strike while the iron is hot
In the new economy, you need to be first, fast and focused and this is principle applies similarly in the sale of a house. If you have prepared yourself and done your homework, you should be able to move quickly to negotiate, close the sale, prepare the necessary documents and, take the necessary action to complete the sale.

Beware of post-handshake dissonance
Many buyers go through an emotional dip where they suddenly become worried that they have made a wrong decision. It will intensify their desire to look elsewhere for a better buy. Some of their friends may even discourage them from proceeding with the sale. To prevent this, seal it with a legal binding contract as soon as possible. If you don’t, your competitors might.