Is your property or Business Investment ready for sale?
Now that you have made the decision to sell your property or business investment yourself, you have taken the first step - Congratulations. But remember you only get one chance to make a first impression. By following a few simple steps (regardless of whether you are selling your own real estate or through a Real Estate Agent or Broker) you can market your property or business investment to its best advantage.
First Impressions Count
"Curb appeal" is a term often spoken by agents or brokers to describe the first impression a potential buyer gets when he or she first sees your property or business investment.
Cross over the street and take a good look at your property or business investment. Does it look appealing? Can you do anything that will add appeal? Remember, your objective here is to show your real estate, not to hide it. How do the lawns look? Could the shrubs use a bit of pruning? While we are on the subject, have a look at other aspects of the property or business investment interior. Could the driveway be improved? Are the gutters clean, are there any obvious repairs? What about the roof? Believe it or not, more sales are lost because of first impressions. If it looks doubtful, fix it up before you go to market.
Garages and Storage areas are important
Like "curb appeal", garages and storage areas can make or break a sale. It is easy to overlook this important area. Do you really have to keep all those old bits and pieces of furniture, bikes, tools, etc. You know what we mean here. Clean it out make it look tidy and spacious. Make sure the entire area is broom clean and free of cobwebs and all the lights are in working order. If any area needs painting - paint it. The money you spend initially can make a big difference.
Selling one room or area at a time
Inspect each room or area with an objective eye, going from one room or area to the other. Write down everything that needs repairing, replacement or removal - light switches, broken electrical fixtures, paint, squeaky doors and windows and the overall appearance. Also put everything away in the proper place.
Is it worth keeping?
It is time to get rid of those treasured possessions that you have stored, kept or collected. A few of such treasures on display will add interest value of course, but too many may distract or turn off buyers. "Keep it simple stupid" This is the philosophy of one of the world's largest food chains and it applies here. Another genuine reason to put away treasured things involves security. Most people are honest, but why put possible temptation in the path of those who are not as honest as you. By putting away valuable collections and personal treasures, you reduce the opportunity of things simply disappearing.
Rooms that buyers really scrutinise
Kitchens, bathrooms, wash rooms, offices, should get extra attention here because buyers always give these areas special attention. These are the hubs of all activity of a property or business investment and should be clean and pleasant. Make sure all appliances and equipment are clean and working. Organise your cupboards, drawers, so they are more efficient for your own use and pleasing to a potential buyer. Floors must be kept clean and swept where possible. Bathrooms and toilets should be scrubbed from top to bottom. Replace any broken tiles and discretely place pleasant smelling air fresheners around. You might also purchase a small potted plant to add natural colour.
Overall appearance
Buyers warm to appealing properties or business investments that the owners have taken pride in. It is also better to show off your pride and joy when it is clean and pleasant.
Is it worth all this trouble?
You might be saying by now. Is it all worth the effort? Everything we have discussed here is what a reputable real estate agent or broker would advise you to do and since you a re selling your own property or business, shouldn't you do it and be the one to reap all the benefits for your individual effort.
Market value of your property
Establishing the market value of your property or business investment is most probably the single most important decision you will have to make concerning selling your own property or business investment. If you overprice it, you may not get any genuine "lookers". If you under price it you will only get "bargain hunters" who will make all sorts of unrealistic offers.
It is important therefore to avoid overpricing or under pricing, you must get it right. You must know something about the current market values of your property or business investment.
How to find out your market value
Before establishing what a fair market price is, take the time to realistically consider what you are selling and view it from the eyes of a potential buyer. What are the advantages and disadvantages of your property or business investment compared with others similar to yours? Also find out the asking price of other real estate that is for sale or has sold recently in your neighborhood or business field. Selling prices are the most accurate gauge of current market value. Spend the time and do your homework as this way you will price your property or business investment within the most realistic price range.
Call two or three real estate agents for a comparative market analysis. Tell them you are thinking about selling and would like their opinion of your property or business investment's current market value. They will want to come and inspect your real estate and will either give you an approximate price or will get back to you with a market report. Note of caution - Any real estate agent you call will then do his or her best to get you to list your property or business investment. You should make it clear after they get back to you that you are only considering selling and may in fact market the property or business investment yourself.
Take a drive around your area. Write down addresses, phone up advertisements in the newspaper of properties or business investments with similarities to yours. Contact the real estate agent or broker for the listing prices of any signage you see in your area.
Contact an independent appraiser for help in pin-pointing "fair market value". Beware that hiring a professional will cost you money but his report will cover market conditions, recent sales in your area or field, current land prices and other objective conclusions. Ask your local bank manage to recommend someone or look up the Yellow Pages if you want to use this valuation method.
Set your Asking Price
Once you have formulated all the information together and have a clear idea what similar properties or business investments are being sold for, you are now ready to set your asking price. You must establish firstly what you need or would like to make from the sale. You cannot however use this as your only consideration. The fact that you need so much to pay off your mortgage or put a large cash deposit on another property or business investment can have no bearing on the property or business investment's actual market value (what buyers will pay).
Question - Can you afford to sell right now?
While pondering this important question, you will also need to know how much you will clear in the sale. You don't want to actually sell and find that your net is less than you had planned because you did not take the costs of selling plus other costs into account. Such costs include some or all of the following:
- Cost of marketing
- outstanding mortgage
- repair work needed
- solicitor's fees (selling)
- stamp duty
- searches
- other miscellaneous expenses
The actual selling price will also be affected by current market values. Consolidate all of the data you have collected, being honest with yourself to establish the best and worst selling price. You can do this calculation on maximum, fair market and bottom line values - it is up to you. To actually establish that (after all of this) you are priced too high, give your selected price a 30 day trial period. If there is very little interest or activity during this time, you may consider a price reduction. This might just be the thing you need to generate interest and keep your property or business investment in the spotlight, increasing your chances of selling your property or business investment.
Be prepared to sell your property or business investment
The better you prepare for selling the quicker and easier it will be to sell your property or business investment. Nothing kills buyer's interest more than getting misinformation. Remember that buyers have short attention spans. Be knowledgeable and prompt in your answers to their questions. It is a very good idea to give them as much information as you can to take with them. This way, they can review all your information at their leisure which will reinforce their interest in your particular property or business investment.
Street signs are valuable tools
"For sale" signs generate more enquiry than any other form of advertising. You must compete for your buyer's attention. YOU MUST HAVE A STREET SIGN. It needs to be attractive, easy to read and placed in a predominant position on your property or business investment. You can either purchase a ready-made sign or have one made by a professional sign maker. (Check out the Yellow Pages under "Sign Makers") The last choice is generally more expensive but is worth the extra investment and will help your property or business investment to stand out in an overcrowded and competitive marketplace.
If you intend to hold "Open Houses" you will also need signs for these occasions. You should have a minimum of three "Open House" signs. Place one on your property or business investment, one on the corner of your street and one at a major approach to your location.
Listing Description Sheet
This is an absolute must and is the most versatile selling tool you will possess. It is invaluable as a free giveaway and for giving to prospective buyers as they view your property or business investment. It can also be used for direct mailing and as a mail-out sheet. Ideally it will be in A4 size (standard letter writing page size) on regular photocopy type paper, or it can be as elaborate as a professionally designed and printed four colour full gloss brochure or card. If your property or business investment is worth say .. One million dollars plus, you should be prepared to invest more time and money into your Listing Description Sheet. In the age of computers, it is not difficult or expensive to produce or have a friend produce a nice looking professional Listing Description Sheet. If you do not have the capability to generate your won sheets, there are many quick print type shops which can prepare it for you.
General Information Description Sheets
These do not need to be as professional as your Listing Description Sheets but never-the-less are just as important as they provide the basic nuts and bolts information on your property or business investment. You list the same basic information such as :- address, phone number, description (as with your Listing Description Sheet) however, you do not need a photo or sales pitch as this sheet contains your property or business investment's confidential information. As a minimum a well constructed sheet should include:
For a Property
- Type of property
- property title
- suburb/town
- city
- area
- other
- asking price
- GV valuation
- street address
- postcode
- construction
- size of block
- zoned
- outlook
- rates per annum
- age (aprox)
For a Business Investment
- Asking price
- business name
- street address
- postcode
- location & premises
- product & service
- urnover
- net profit
- plant value
- stock
- plant on lease
- options
- current rental
- outgoings
- trading hours
- staff wages per week
These sheets can be as long as necessary to provide a buyer with an accurate picture of your property or business investment. Not only does it answer all a buyer's possible questions, it helps a buyer to recall important details about your real estate. These sheets will also be a helpful reference when you are talking on the phone to a potential buyer. At the bottom of all sheets you should include a disclaimer saying the information is correct to the best of your ability, but in no way is to be considered a warranty or guarantee that such information is correct (or words to this effect).
Marketing your property
You have now made the big decision to sell your property or business investment. You have your real estate in market shape, prepared the necessary tools. You are now ready for all those buyers. Yes! You are now ready to let potential purchasers know that you are now "Open for Business".
How do we tell the market you are ready for sale?
We must first explain to you the difference between "Marketing" and "Advertising" and how to use them both.
Marketing
Marketing encumbrances using all your skills, contacts and networking opportunities to let the marketplace know that your property or business investment is for sale.
Advertising
Advertising is a way we get a message to the marketplace using advertisements that will catch the eye of potential buyers.
Real Estate Agents and Brokers who are really successful do not rely on advertising alone to sell property or business investments, but use a combination of both marketing and advertising to get maximum exposure. With a little know-how you can also market your property or business investment like the professionals.
Let us show you how - using a Listing Description Sheet
Making your Listing Description Sheet work for you by handing them out to buyers, neighbours, friends and associates. If you think about it, you will find many other ways to use your Listing Description Sheet. The important thing is always to have plenty, keep them handy. You simply never know who might be interested.
Talk up your property or business investment, you will be surprised at how many people will become your selling allies. Your local shopkeeper, hairdresser, mechanic, etc. Many will want to help and will pass on information to someone who just might know someone else who may be interested. Don't be afraid to take opportunities as they present themselves. Always carry a few sheets with you just incase.
The more people who know about your property or business investment the better the chance you will have of selling it.
Advertising your property or business investment
It is important to identify your potential audience to determine which type of publication or media best meets your needs. Your local major newspaper and the internet is usually the most cost effective means of advertising your property or business investment.
Advertising budget
Without a predetermined advertising budget, your advertising cost could easily eat up most or all of any commission savings you might make selling your own property or business investment. You must be careful what you spend on advertising and create a plan to spread the advertising evenly over a period of time anticipated to sell your property or business investment.
As a general rule of thumb, you should spend between 10% and 15% of the commission figure you will be saving.
Where and when to advertise
Your choices can seem totally overwhelming as there are literally hundreds of advertisers out there who will be happy to take your money without much thought to how appropriate their actual publications or media are for your type of property or business investment.
In most cases, your most valuable advertising medium will be your local daily or weekly newspapers. These are the ones with the largest circulation, the ones that while everybody probably complains about them, everybody reads them. If they have a large and active real estate section with ads representing the busiest agents or brokers in your area, you can probably assume that these professionals know where it pays to advertise. Smaller local suburban papers can also be valuable. They are not only less expensive they can also draw a large audience. Again, you must determine the circulation, size of real estate section, etc.
Using the internet
This medium is today, is here now, and things are selling on it. All real estate agents and brokers have their own internet sites and also put listings on to separate commercial sites simply because it achieves incredible exposure for them with a potential audience throughout Australia for over 20 million people and with a global worldwide exposure. This advertising tool is inexpensive and the most cost effective advertising tool available.
By listing with a service provider, you do not need to be an expert in web design, coding, search engine, etc. to get the buyers to visit your site. After all, you would not be reading this if the internet did not work - would you!
Showing your property or business investment
So you have never sold anything before. By using these simple to learn techniques, we will show you how to professionally present your property or business investment. Your absolute biggest advantage is that you really know what you are trying to sell. No one else not even the professionals can know more about your own real estate than you do.
The art of selling
Selling when you think about it constructively is no different to any other person to person contact. The rules are always the same. Be honest, be interested in the other party, be enthusiastic, but most of all be prepared to listen. At first you will be understandably nervous, but after a few conversations and inspections you will relax and confidence will grow with each showing.
If you have to sell due to whatever reason, try not to let the buyer know - Never appear desperate. Be honest but brief "We are going through a divorce settlement" - "It is too big for us now" should stop further undesirable questioning. You must always keep control of the situation but don't be pushy. Show your prospect the same respect and consideration you would expect. A hard-sell approach will kill more interest than it creates.
Handling questions and phone calls
You could start getting phone calls almost as soon as you put a sign up or your advertisement hits the newspaper. Thank them for calling, introduce yourself and ask for his or her name. This approach, although hard at first, brings the anonymous caller to a level of a personal exchange. Some callers will not give their names but most will respond pleasantly to your answer "Thank you for calling, I'm Bill Smith, what is your name and can I have your phone number?" The caller will then ask for specific or general information. Respond clearly and concisely but remember to be brief and pleasant.
When would you like to see it?
Sounds simple enough doesn't it. But many people have trouble stating the obvious, entering into long conversations without ever getting to the point of the call. By asking this question early, you can save time for both of you plus you generate a response.
You will be surprised how easy it is to get them committed to an inspection time by offering them a choice. "I can show you the property (or business investment) anytime. Which time works best for you?"
Once you have set a date and time, don't forget to ask them for their phone number and address in case you have to cancel or reschedule any inspection. What you are really doing here is gaining a little more information about them.
Occasionally the caller will not commit saying they want to think about it and will get back to you. This usually means he or she is mentally weighing up your property or business investment against others he has already seen. This puts your property or business investment at a big disadvantage so try to neutralize this situation by offering to mail or e-mail them a listing description sheet. Buyers will normally welcome this offer and it will at least give you a foot in the door so to speak, but if the party still hesitates "Forget it" as in all possibility they are not serious buyers.
The countdown before showing your property or business investment
A few hours before you expect to show your real estate, go through the property or business investment from to bottom and don't forget the outside. Put your listing description sheets and other selling tools within easy reach so you can give any interested party a coy to take with them when they leave.
A good idea if you a re a bit nervous is to do a mock tour through your property or business investment. This will help you firstly to get wheat you are going to say right and secondly will mentally prepare you for the countdown.
A brief word about pets - Although we all love them, they might just scare the potential buyer off (some people do not like dogs or cats). They may distract the potential buyer to a degree where they stop paying attention to the property or business investment and focus totally on old adorable Rover to Puss. Obviously this is not a desirable outcome, so keep them out of sight and under control.
Inspection techniques used by the professionals
Basically this involves some simple extra little touches that, while not necessary, will make your property or business investment more inviting by utilizing some very basic a simple steps.
Inspection techniques check list
- Flowers are always a nice touch and adds class.
- Turn on pleasantly soft background music.
- During the colder weather, keep the house warm.
- Have something in the oven cooking makes the home smell inviting.
- Keep windows and blinds open for maximum brightness.
- Turn on all interior lights.
- Have all your selling tools neatly arranged in a convenient location so you can get them.
- Caution - Do not serve refreshments.
- This is a business meeting not a social event.
- Put your best towels in the bathroom.
- Putting nice smelling scent in each room is a good touch.
- Any other little tricks you may think of to enhance your property.
Welcoming buyers
Greet prospective buyers warmly. Give them a copy of your Listing Description Sheet and let them know that they are welcome to ask any questions and have whatever literature they would like to take with them when they leave.
The actual tour
Don't let buyers wander through your property or business investment always escort them, remember these people are strangers to you.
A good salesman will always be prepared to listen
Good listening skills cannot be over-stressed here. By listening to what they are saying, you can better understand their particular concerns and objections. Don't worry about objections because this means a buyer is trying to visualize themselves in your property or business investment. It's your job to show them how this can happen. Agree with them and help solve their objectives by making suggestions. Do not get defensive.
Another major mistake is overselling. Don't get sentimental as this will only serve to make the buyers feel mildly guilty for their intrusion into your personal life. They begin to see the property or business investment as "yours" with no possibility of it ever becoming "theirs".
Lookers versus buyers (or sellers beware)
You will meet all sorts of people when you are selling your property or business investment. Most will be sincere however, there are a few types out there who give others a bad name.
Some are just lookers with apparently nothing better to do than spend time touring other people's houses. The thief can usually be defined as anyone that takes a whirlwind run through he property or business investment, asks few if any questions and seems suspicious in general. If you have nay doubt, discretely record his license plate number, make and model of the car they are driving just in case. Sounds too good to be true (it most probably is) Another type of buyer who can waste a lot of your valuable time is the one who keeps telling you how much money they have, all the properties they own. You know the type. Don't rule out this buyer entirely, just be a little cautions as usually if it sounds too good to be true, then it usually is.
Your obligations of Disclosure
You are legally and morally obliged to tell all you know about your property or business investment good and bad. If you know for example, your fence is on the neighbour's side and you don't tell them, you could be held responsible later on. Yes, you may lose some buyers but honesty is always the best policy when selling your own real estate.
Inspection summary
Also make sure you answer any questions put to you. Ask them if they have any further questions. Thank them for coming. Encourage them to call again at any time with any questions they may have. Se them off the property and wave goodbye.
Follow up all buyers
If you have followed all the rules, you will have their name, address and phone number. A follow-up call (say a week later) will either help your to eliminate them as potential buyers or create further interest. Be brief, polite and to the point. "Hello, this is Bill Smith, we met last week when I showed you my property (or business investment) at.......I'm calling to see if you have had a chance to consider my property (or business investment) and if you have any further questions.
If their response is "Yes", great.
If their response is "We are no longer interested", wish them luck and say goodbye.
You will at the very least know where you stand with these buyers. It costs you nothing but a phone call and you might be surprised by the results of your follow-up call that will help you make decisions later on such as:
Is the price too high?
What else you can do to present your property (or business investment) differently?
Remember all information is a valuable marketing tool that will help you sell you real estate.
What if a Real Estate agent or broker calls?
Expect to hear from local real estate agents or brokers as soon as you put your "For Sale" sign up or run an advertisement. This is because a high percentage of sellers who try to sell their own property or business investment end up turning the task over to a real estate agent or broker because they become discouraged or because they were not properly prepared to market their own property or business investment efficiently and correctly. This publication exists to help sellers like you around both scenarios.
Handling an agent's phone calls
Persistent agents will phone up religiously checking your progress week by week and less frequently throughout the entire selling period. Don't be discourteous. This type of agent is definitely worth considering should you decide to use an agent in the future.
Be polite but firm when thanking them for their call and re-enforcing the fact that you intend to sell your own property. Don't get sucked in by the old saying "I have buyers waiting".
What if you decide to use an agent as well?
If you decide to use an agent or broker as well, that is your choice, but tell the real estate agent or broker that they may show your property or business investment without a listing authority agreement and that if he/she sells to a buyer, you will be happy to pay X% commission. Explain that you will consider offers but never disclose your bottom line.
Seller's agent, buyer's agent, dual agent, and yourself
There is always confusion over just who the agent represents. To clarify this situation we list the various types.
Seller's agent
This is the most common and is where the agent works for the seller and gets paid by the seller.
Buyer's agent
This is relatively new on the real estate horizon, but who represents whom? In theory they still get paid as a real estate agent or broker a parentage X% commission and yes, also get paid to represent the buyer who pays an up-front fee for their services. Because the buyer pays an up-front fee, guess whose interest they really have at heart.
Dual agent
Is this a joke or what? How can one agent represent the buyer and the seller at the same time? How can this type of agent fulfill his responsibility to both parties without favouring one or the other?
The absolute best agent is - You.
No one will or can represent your interests better than yourself. Who knows your property or business investment better than you? Who understands all the features and reasoning behind your selling rice and or bottom line price? We don't have to tell you who - its You. In most cases even if you do ultimately use an agent, you will still do most of the selling anyway so why not do it yourself in the first place and save.
When do you get your Solicitor Involved?
Do it yourself is great and has got us this far. But this does not apply to the complicated legal aspects of selling your own property or business transaction.
Know when to ask for help
Even the most competent real estate agents or business brokers cannot possibly keep up with all the laws and changes that occur, and because real estate laws vary from state to state, you should consult a solicitor as soon as you have decided to sell your real estate yourself.
What to ask your Solicitor
- Tell your solicitor exactly what you are doing and how you intend to do it. Ask his advice.
- The solicitor should explain exactly what to expect from hi and exactly what services he will be providing for his fee.
- Once you reach an agreement with a buyer, your solicitor now becomes the key player in your transaction. He will draw up a formal Purchase Agreement, handle deposit money in their trust account, manage all the legal aspects associated with the sale.
- As soon as you accept an offer, you should get the name, address and phone number of the buyer's solicitor. From this point on all communication regarding the sale will be done by solicitors.
- If a purchaser pays you a deposit, pass it on directly to your solicitor. It is generally accepted that your solicitor, rather than the buyer's solicitor controls the deposit monies. (In the event that any problem does arise).
- Your solicitor continues to represent you right through to settlement. Million dollar deals have been known to fall apart just before settlement over something really trivial. You are paying good money to have your solicitor represent your legal best int4rests, so resist any temptation to turn into sudden shifts of direction that your solicitor is not aware of. After all your solicitor is on your side.
Negotiating the price of your property or business investment
Negotiating the price is something a real estate agent or broker would have you believe is a mystical ritual that only professionals can master and control. Don't be fooled, the agent is no more qualified than you are to intelligently weigh up offers and present counter-offers. Common sense, understanding your market and what you have to sell is the only qualification you need.
Price objections and how to handle them
As a general rule the closer a prospective buyer comes to making an offer, the more objections they raise. When a buyer makes a verbal offer you then have a starting point for discussion. If they are offering you a lesser amount because of this and that, they may be objecting to your asking price over things that can be easily and inexpensively repaired. You can say you will fix them. While this is a very simple helpful scenario, most transactions are not so straight forward. Most price objections come with contingencies and conditions. Only you can decide how much you will do or negotiate to get the sale. Just remember, when a prospective purchaser starts negotiating, he is committed and ready to purchase for a price, so price objections are in fact a telling sign that your are getting close to a sale.
Negotiating the offer
Say your asking price is $200,000 and the buyer offers $170,000, you must compare the offer with your bottom line that you have established. If it is say $180,000 then you know you can not accept the original offer. You may then counter-offer with $190,000. If the buyer then splits the difference between their offer and your counter-offer, they will come back at $180,000 which is your acceptable bottom line. If you are not sure what to do or say here, then do not commit yourself. Tell the buyer you will take their offer under consideration and get back to them very shortly. Give yourself time to think it all through or seek advice.
Cash is king
Simple put, if you have buyer who makes a reasonable cash offer, this might be worth considering at a price as if you agree you have virtually sold your property or business investment.
The actual Sales Contract
Your solicitor will draw up the actual Sales Contract or Purchase and Sale Agreement. This document contains all the legal aspects of the real estate transaction such as trials, warranties, conditions and representations. Generally your solicitor draws up the Contract and sends it to the buyer's solicitor to be signed by the buyer before being presented to you (the seller) for your signature. To assist your solicitor to prepare a Contract of Sale, basic elements of the sale should be supplied such as:
- Date of agreement
- name of seller
- address of seller
- contact phone number
- name of buyer
- address of buyer
- contact phone numbers
- seller's solicitor
- seller's solicitor's phone number
- buyer's solicitor
- buyer's solicitor's phone number
- description of what is being sold
- address of same
- purchase price agreed to
- what is included in sale
- deposit to be paid
- who holds deposit
- all other general conditions agreed to
- timetable of agreement
- inspections (if any)
- special conditions (subject to finance, etc)
- signatures to agreement made.
Ideally you should write out two copies of this information - one for each solicitor.
How long does it all take?
The buyer generally determines the overall timeframe of the Contract. This does not mean you are at their mercy in terms of completing the sale as rapidly as possible, you always have the option of accepting their timeframe or not.
It is now time for Settlement
Settlement is the final meeting between the buyer and seller. Simply put, after all the paperwork is signed, the buyer gets the property and the seller gets the money. Your solicitor will advise you of the settlement date, time and location. We recommend that you bring your entire property sale folder with you just in case. It is important to understand that you are paying your solicitor good money for his professional services so you should let him do his job. Most sales go through smoothly but some can fall apart at the very last minute unexpectedly. But take heart, most issues can be resolved but it is important for you to let your solicitor handle things.
Thank goodness most settlements are relatively uneventful. Once everybody has signed loads of paperwork and documents, the cheques (money) are distributed and everyone walks away happy.
All that remains is to deposit your cheque with the satisfaction of knowing that you did it yourself . You also saved thousands upon thousands of dollars in commission because you did it.
Congratulations.
Hunter Realty.com.au
http://www.hunterrealty.com.au
