| WINTER 2010 PROPERTY UPDATE
Honest price estimates
By Paul Kounnas,
MD Hudson Bond Real Estate, Victoria, Australia.
When home sellers ask an agent to give them a price estimate on their property, quite often the sellers expect a higher figure than an honest agent will quote. Some real estate agents may be tempted to raise their estimate price in order to get the listing.
Once you have signed up and committed to an advertising budget they commence negative market feedback designed to condition you to lower your price expectations. Despite the Australian Fair Trading Act of 1999*, and more recent legislation, there are still some agents who over-quote the price of properties and then, when marketing the property, mislead buyers by under-quoting how much the sellers will accept. This is called bait pricing.
Real estate agents should be familiar with recent sales of properties that are similar to yours. This is the best guide an agent can use to determine what a property is worth, by looking at what buyers are paying for similar properties. The agent will generally quote you a likely range, for example $500-550,000. This is not a valuation; it is an estimate.
So how do you know if it’s an honest estimate? One way to detect deceit is to ask the agent to support his or her price estimate with recent comparable sales. Look at these examples closely and objectively and make sure you really are comparing similar properties.
Occasionally agents encounter unusual properties that can be harder to estimate because there are no recent comparable sales available for comparison. This makes things a little more difficult, but not impossible.
Most importantly the market price of a home will not be determined by what price the agent gives you or by what you want – it will be determined by market forces, particularly what buyers are prepared to pay. If you put a fair price on your property it will sell. Price your property unfairly and it won’t.
Treat price estimates as a guide only, and seek honest agents who will give you honest estimates.
*The equivalent legislation in new Zealand is The Fair Trading Act 1986
Bring on the Festival of Lights
We can’t wait to see what Hang Up Lighting have in store for our front window for the 2010 Lyttelton Harbour Festival of Lights. This year we are taking the option of having our window designed for us, but we’re taking part as always in the fabulous atmosphere of the festival.
We live in such a vibrant community and there are many ways to get involved. I have always been happy to support local projects of all kinds and I’m proud to be a business supporter of the 2010 Festival of Lights too. This event, from 18 to 27 June, will indeed “light up” Lyttelton during the cold month of June, giving locals the chance to celebrate Lyttelton’s many talented and creative residents. It will bring thousands of people to port to enjoy the range of events and of course the very popular street party on 25 June. That can only be good for local businesses.
See you there!
Autumn 2010 - Property update
Hot tips for getting top dollar when you sell:
We recently sent out a flyer about our free booklet: How to Get the Highest Price for Your Property, which is packed with good advice about presenting your home in the best possible way to attract buyers.
“Buyers are attracted by the appearance of your property and, when they inspect it, they are influenced by its atmosphere” the authors write.
Tips for the outside appearance of your home will help create an impression that says ‘Welcome, come inside’.
Buying a home is an emotional exercise and once inside your home, buyers should be captivated by the warm, clean atmosphere.
For tips on successful selling, please visit our office or call us and we will send you a copy of How to Get the Highest Price for Your Property.
The Rise and Fall of House Prices
The housing price slump seems to be over, but what will prices do now? Stay the same or rise?
The RBNZ looks likely to increase the official cash rate (OCR) midyear. The RBNZ noted in its January Statement the NZ economy continues to recover and is “comfortable” with the outlook for inflation.
Latest comments from ASB chief economist Nick Tuffley indicates they expect RBNZ to lift the OCR at the time of their June Monetary Policy Statement.
Good news for home owners often comes with attendant bad news. The media were quick to pounce on what they perceived to be a rising housing market towards the end of 2009. While a rise in house prices makes home owners feel secure, it strikes fear into the heart of Mr Bollard. As rising house prices are seen as the root of all evil by Mr Bollard he would respond to this by a more rapid tightening of monetary policy.
However the ASB economist sees “signs that the housing market rise is ending”. He also believes the relationship between the OCR and lending rates is likely to be “a lot firmer than we had previously assessed”. Mr Bollard sees rising house prices as inflationary and would act to curtail this.
We have certainly seen falling house prices hit the bottom, with a slight bounce back towards earlier levels, but there is a long way to go yet.
There remains an air of caution in the market place fueled by signs of stress in the economy at a national level with job losses, restructuring and closures. This will override whatever Mr Bollard does with the OCR and interest rates and determine how the market reacts to property prices.
Min Sarginson. |
