HOME NOT SELLING? Kylie Davis from RP Data talks to Andrew Winter, host of award-winning television show Selling Houses Australia, about why homes don’t sell and what you can do to fix the problem of vendors behaving badly.
THERE ARE three reasons why properties don’t sell, according to Andrew Winter, host of award-winning television show Selling Houses Australia.
Each of these reasons has a common cause – they are all based on a lack of understanding by vendors, either about the process of selling or about how the market is behaving.
But how do you handle recalcitrant vendors? They are, after all, one of the great and common hazards of selling real estate.
What you need to do is guide vendors towards a greater understanding of the value of their home, the market they are in and the best way to sell it, by presenting relevant, recent data, rather than engaging in an opinion fuelled debate.
Andrew told me about the key ways in which vendors misbehave, and I’ve matched them to solutions to help you empower your next vendor conversation.
VENDORS WHO HAVE NO IDEA ABOUT THE COMPETITION
“Often sellers focus on sales in their area from recent years or even months ago, while many others simply have no idea or clue what else is happening in their marketplace,” says Andrew.
“This is a fundamental error and one we deal with on the show all the time. Selling is all about the competition – what is for sale right now, in your area, similar homes to yours and similar price/value ranges.”
What agents can do: The CMA report is a key tool in helping vendors understand what homes like theirs have sold for recently. But equally, agents can provide vendors with a list of homes similar to theirs which are currently on the market and encourage their vendors to go to the open for inspections to get a feel for the competition.
“Being aware of the competition helps vendors understand if and why they need to consider improvements, or how well placed their home is to compete in their market,” Andrew says. “Agents can play a much larger role in making it easy for vendors to get this knowledge.”
VENDORS WHO DON’T TAKE THE MARKETING SERIOUSLY
“Good agents know you cannot sell a secret, but still the myth persists in the mind of some sellers that marketing a property is unnecessary if an agent is good; or alternatively that marketing is just so agents can extract more money from vendors,” says Andrew.
“It’s all rubbish, of course. Agents need to encourage vendors to invest in marketing and be involved with the process. Allow your vendor to read all the ads you prepare for them, read all online content, and proof read everything.”
What agents can do: Showing vendors how properties like theirs were marketed and the result they achieved is a really powerful way to demonstrate to vendors the power of marketing.
Analyse the impact of the different kinds of marketing and how they affect the final price and time on market. Available data shows conclusively that a combination of print and online advertising is the most effective way to promote a home, resulting in less need to discount and a faster sale. This information can be incorporated into your CMA and provides definitive evidence to support a vendorpaid advertising pitch.
VENDORS WHO ARE NOT REAL WITH THEIR PRICE EXPECTATIONS
“Most homes sell for market value; many may sell for slightly less if supply exceeds demand, and some may exceed the believed value due to a boom in the market – but huge demand and a very low supply are the ingredients for this pretty rare phenomenon,” says Andrew.
“But hardly ever will a property sell for considerably more than market value, even though this is a dream many vendors firmly believe and cling to. Agents really do need to have those tough conversations early on with vendors – otherwise it nearly always ends in tears.”
Managing vendor expectations is one of the toughest things to do in real estate: vendors traditionally seem to over-inflate local gains in price when applied to their own home, and dismiss price falls on the basis that those factors don’t apply to them.
What agents can do: There are many tools that can manage vendor price expectations and keep them real.
RP Lister, for example, is an iPad app that allows agents to upload properties similar to the vendors and then engage the vendor in deciding by moving a sliding bar if their property has features that are stronger or weaker than those shown. At the end of the process, a price expectation is generated by the app, giving the vendor a firm outline of a likely value on their home based on the competition and their own assessment.