The awful truth of the 5 "P's" of getting ready to sell and the selling process
The awful truth of getting ready to, and of selling
Date:
24-Feb-2017Category:
SellingThe awful truth of the 5 "P's" of getting ready to sell and the selling process
The awful truth of getting ready to, and of selling
The Awful Truths of selling your property - The 5 “P’s”
Pricing
1. “Your first offer is the best” - Well, almost right. I always draw my sellers a graph showing activity versus time after listing. We all have seen properties which have been on the market for ages. What do we say? Must be overpriced, must be something wrong with it. The fact is that we become blind to these properties – we don’t even notice the signs after a while as we drive by. I call this the “pool of buyers” theory. If the average time on market is 3 months in your area, and there are at any time 4 people looking for a property like yours, then we assume that there are 12 immediate prospects for yours. They will all look at your home in a week or two. Activity, freshness, looks like competition at the open homes. Expect an offer within 3 weeks. If not, then what went wrong?
2.“We can always come down, and I need to leave room for negotiation” – This sets you up for number 3.
3.“Don’t bring me any silly offers”. We are obliged to present all offers to you. I have taken offers I thought were dreadful to sellers who grabbed them and good offers to sellers who laughed at them. The offers are for you to decide upon. If you want, we will tender our thoughts on them to you.
Plans, ‘provals, and paperwork
4.Do you have a copy of the final inspection certificate for your property if you built it or have had extensions or renovations done? It is surprising how many sellers do everything but the last step - getting the “Final”.
5.Are all improvements (covered pergolas, carports, pools, new plumbing etc) approved by council or a certifier? If in doubt, check. Again do you have the stamped plans?
6.Have you had regular termite inspections? (not getting the house sprayed for cockroaches)
Do you have the receipts? Is there a certificate in the meterbox? If there was an extension, was a proper barrier installed in that area? Be aware that in virtually every Building and Pest inspection, and that in over 90% of sales is going to happen, if you have no chemical barrier, (and that needs to be inspected and topped up annually anyway), then the inspector will automatically make an adverse recommendation, and we frequently see this being renegotiated as a seller cost – around $4000. Disclosure
As Australia continues to embrace the concept of liability and disclosure, and away from “caveat emptor”, it is important that sellers disclose relevant issues.
7.Ownership and title
We as agents are required by law to make diligent enquiries as to the ownership of a property, which is defined as carrying out a title search at the time of listing. We have had sellers give us a copy of a title produced at the time of their purchase many years ago, saying there is no need to pay the $22.95 for a new one. A title is valid at the time of issue and all title searches are date time stamped for this reason. Mortgages, encumbrances and caveats can be registered at any time.
Case History:-
A. A property was listed – title search done – contract signed – 3 days prior to settlement a financier lodged a caveat to prevent settlement unless their alleged debt was satisfied. A pre settlement title search revealed this fact. The seller then had to payout the financier to achieve a settlement. If the title search had not been done then the property may not have been settled.
Common problem – marital issues not disclosed, and family court consent caveats and orders hindering sale. One party trying to sell a marital property behind the other party’s back. All parties need to sign all documentation.
Termite and approval issues
Common issues – pergolas, sheds, decks, built in areas, not approved or final inspections not done. Sellers need to be aware that it is highly unlikely that anything they try to hide will not be discovered. Building inspectors frequently cross refer a copy of stamped council plans to what is on the property. If you are in doubt, discuss it with your agent.
Case History 1
A house in Noosa Waters had had a termite attack. The seller had discovered it and treated it himself, then simply polyfillered over it. The seller did not disclose it to the agent at the time of listing. When it went under contract a building and pest inspection quickly found the site. Further inspections then discovered the tracks. The seller’s assurances were considered unreliable and the buyer terminated the contract. A second buyer entered into a contract and also terminated for the same reason. It is a small world and once a property is tainted you are coming from behind from then on. Word spreads. If an issue is brought out up front it easier to deal with it. We can also incorporate an appropriate clause into the contract that the buyer accepts the issue as is.
Case History 2
A Noosa Heads house had a seller who built an un-approved pergola and carport. The seller did not disclose this to the agent. A contract was entered into and the building inspection revealed the issues. The pergola was able to be retrospectively approved but the carport did not comply in several respects with council regulations. The buyer negotiated a substantial reduction in the purchase price.
Pools
8.A change to the Pool Fencing Act was passed in Sept 2010. It is not illegal to sell a house without a pool safety certificate, but it certainly helps to have one. If not we have to issue a form 36, and it raises questions with the building inspection. The deadline for registering your pool on www.dlgp.qld.gov.au/pool-safety/pool-safety-register.html has long passed. Your certificate will have a validity of 2 years for a house (non-shared pool) and one year for a shared pool (usually in a unit complex). In this case it is the body corporate’s responsibility.
Presentation
9.Please either listen to our advice on presentation, or get a professional stylist. I often hear “The buyers can see past that”. Well, they probably can, but a discount. Watch the UK Lifestyle show “Selling Houses” or the Australian version. Take a look at our separate articles “Buyer’s Pet hates” and “Preparing for photography”. We are assuming that you want to sell a finished product, but if it is a “renovator” be wary of wasting money, as doing one thing well can make the rest look ordinary. In this section I also include tenants. Are you selling or renting??
Case History 1
Seller had rented the house himself (also not a good idea) for 5 years at a below market rent. We advised the owner to give 2 month’s notice and then put on market, but owner wanted to keep getting the rent. The tenant agreed that she would co-operate but became difficult about open times, had her dogs loose and ran washing machine tv etc during opens. Had also without consent rented the storage under house which restricted access. Owner finally gave her 2 month’s notice but tenant did not leave. Owner then disregarded advice to apply for an urgent application for vacant possession. At time of writing tenant is still there and house is unsold.
Case History 2
Similar to above but after 2 month’s notice and tenant not leaving, tenant alleged that owner had verbally agreed to let her stay a few extra weeks. When owner went to QCAT, after delaying a few weeks, the magistrate found that Owner had lost their right to vacant possession, and had to start 2 month’s notice all over again.
Photography
10.If the photographs look rubbish, we are starting behind the line. For what it costs, around $250 -350, it’s worth every penny, and we help with the preparation. We also now have packaged with virtual tours and a floorplan.
These are original thoughts and suggestions from David Garwood based upon over 20 years selling property, and on what has gone right and what can go wrong.
Pricing
1. “Your first offer is the best” - Well, almost right. I always draw my sellers a graph showing activity versus time after listing. We all have seen properties which have been on the market for ages. What do we say? Must be overpriced, must be something wrong with it. The fact is that we become blind to these properties – we don’t even notice the signs after a while as we drive by. I call this the “pool of buyers” theory. If the average time on market is 3 months in your area, and there are at any time 4 people looking for a property like yours, then we assume that there are 12 immediate prospects for yours. They will all look at your home in a week or two. Activity, freshness, looks like competition at the open homes. Expect an offer within 3 weeks. If not, then what went wrong?
2.“We can always come down, and I need to leave room for negotiation” – This sets you up for number 3.
3.“Don’t bring me any silly offers”. We are obliged to present all offers to you. I have taken offers I thought were dreadful to sellers who grabbed them and good offers to sellers who laughed at them. The offers are for you to decide upon. If you want, we will tender our thoughts on them to you.
Plans, ‘provals, and paperwork
4.Do you have a copy of the final inspection certificate for your property if you built it or have had extensions or renovations done? It is surprising how many sellers do everything but the last step - getting the “Final”.
5.Are all improvements (covered pergolas, carports, pools, new plumbing etc) approved by council or a certifier? If in doubt, check. Again do you have the stamped plans?
6.Have you had regular termite inspections? (not getting the house sprayed for cockroaches)
Do you have the receipts? Is there a certificate in the meterbox? If there was an extension, was a proper barrier installed in that area? Be aware that in virtually every Building and Pest inspection, and that in over 90% of sales is going to happen, if you have no chemical barrier, (and that needs to be inspected and topped up annually anyway), then the inspector will automatically make an adverse recommendation, and we frequently see this being renegotiated as a seller cost – around $4000. Disclosure
As Australia continues to embrace the concept of liability and disclosure, and away from “caveat emptor”, it is important that sellers disclose relevant issues.
7.Ownership and title
We as agents are required by law to make diligent enquiries as to the ownership of a property, which is defined as carrying out a title search at the time of listing. We have had sellers give us a copy of a title produced at the time of their purchase many years ago, saying there is no need to pay the $22.95 for a new one. A title is valid at the time of issue and all title searches are date time stamped for this reason. Mortgages, encumbrances and caveats can be registered at any time.
Case History:-
A. A property was listed – title search done – contract signed – 3 days prior to settlement a financier lodged a caveat to prevent settlement unless their alleged debt was satisfied. A pre settlement title search revealed this fact. The seller then had to payout the financier to achieve a settlement. If the title search had not been done then the property may not have been settled.
Common problem – marital issues not disclosed, and family court consent caveats and orders hindering sale. One party trying to sell a marital property behind the other party’s back. All parties need to sign all documentation.
Termite and approval issues
Common issues – pergolas, sheds, decks, built in areas, not approved or final inspections not done. Sellers need to be aware that it is highly unlikely that anything they try to hide will not be discovered. Building inspectors frequently cross refer a copy of stamped council plans to what is on the property. If you are in doubt, discuss it with your agent.
Case History 1
A house in Noosa Waters had had a termite attack. The seller had discovered it and treated it himself, then simply polyfillered over it. The seller did not disclose it to the agent at the time of listing. When it went under contract a building and pest inspection quickly found the site. Further inspections then discovered the tracks. The seller’s assurances were considered unreliable and the buyer terminated the contract. A second buyer entered into a contract and also terminated for the same reason. It is a small world and once a property is tainted you are coming from behind from then on. Word spreads. If an issue is brought out up front it easier to deal with it. We can also incorporate an appropriate clause into the contract that the buyer accepts the issue as is.
Case History 2
A Noosa Heads house had a seller who built an un-approved pergola and carport. The seller did not disclose this to the agent. A contract was entered into and the building inspection revealed the issues. The pergola was able to be retrospectively approved but the carport did not comply in several respects with council regulations. The buyer negotiated a substantial reduction in the purchase price.
Pools
8.A change to the Pool Fencing Act was passed in Sept 2010. It is not illegal to sell a house without a pool safety certificate, but it certainly helps to have one. If not we have to issue a form 36, and it raises questions with the building inspection. The deadline for registering your pool on www.dlgp.qld.gov.au/pool-safety/pool-safety-register.html has long passed. Your certificate will have a validity of 2 years for a house (non-shared pool) and one year for a shared pool (usually in a unit complex). In this case it is the body corporate’s responsibility.
Presentation
9.Please either listen to our advice on presentation, or get a professional stylist. I often hear “The buyers can see past that”. Well, they probably can, but a discount. Watch the UK Lifestyle show “Selling Houses” or the Australian version. Take a look at our separate articles “Buyer’s Pet hates” and “Preparing for photography”. We are assuming that you want to sell a finished product, but if it is a “renovator” be wary of wasting money, as doing one thing well can make the rest look ordinary. In this section I also include tenants. Are you selling or renting??
Case History 1
Seller had rented the house himself (also not a good idea) for 5 years at a below market rent. We advised the owner to give 2 month’s notice and then put on market, but owner wanted to keep getting the rent. The tenant agreed that she would co-operate but became difficult about open times, had her dogs loose and ran washing machine tv etc during opens. Had also without consent rented the storage under house which restricted access. Owner finally gave her 2 month’s notice but tenant did not leave. Owner then disregarded advice to apply for an urgent application for vacant possession. At time of writing tenant is still there and house is unsold.
Case History 2
Similar to above but after 2 month’s notice and tenant not leaving, tenant alleged that owner had verbally agreed to let her stay a few extra weeks. When owner went to QCAT, after delaying a few weeks, the magistrate found that Owner had lost their right to vacant possession, and had to start 2 month’s notice all over again.
Photography
10.If the photographs look rubbish, we are starting behind the line. For what it costs, around $250 -350, it’s worth every penny, and we help with the preparation. We also now have packaged with virtual tours and a floorplan.
These are original thoughts and suggestions from David Garwood based upon over 20 years selling property, and on what has gone right and what can go wrong.