Mistake 1 – Fail to understand what is really at stake

“The family home is the last remaining tax haven in Australia and all the profits are tax free,” says Tom. “Selling your family home is one of the few opportunities most people have to increase their wealth, and yet too many people risk achieving the maximum profit possible by cutting corners.”

The mistake people make is by failing to see selling their home as a marketing exercise that requires expertise, knowledge and an investment to get the best results.

“Quality agents understand that their mission is not to get the first buyer for their vendor, it is to get the BEST buyer for their vendor,” says Tom. “Really great agents are there not just to get the sale but to find the hidden 10 per cent premium in the marketplace.”

Mistake 2 – Choose the wrong agent

If you agree that your home is your most valuable asset, you should put the sale of that home in the hands of an expert with a great track record for understanding the premium price formula – not the cheapest agent you can find, says Tom.

“There are two types of agents,” says Tom. “Transaction agents are there to get a sale quickly, regardless of whether it was the best price. But really good agents are attraction agents. They are committed to helping their vendors understand the premium price formula, to building trust and to taking all the steps necessary to unlocking that value. They understand that when you are selling someone’s most valuable asset, this is the greatest service they can do for a vendor.”

You can probably already name a handfull of top end agents in your area, says Tom. These are the agents that you know about even if you have never used them. You see their sign boards and their advertising selling some of the best local properties.

“These are the agents who clearly understand that the right marketing mix will drive significantly more buyers to a vendor’s property,” says Tom. “These are the agents who use better copywriting, larger print advertisements and better placed online inventory. They know the value of excellent photography and all of these elements shine out of everything they do – from how the present their properties and themselves.”

Mistake 3 – Refuse to spend enough on marketing

One of the most common objections from vendors when selling their homes is that they can’t afford a quality marketing campaign.

“Investing in marketing your home is not a cost, it is an investment in the profits,” says Tom. “You have to ask yourself if you want a cheap marketing plan, or the marketing plan that will get you the highest price.”

Marketing is about getting noticed – sales is about closing the sale.

“But you don’t close any sales if you don’t get noticed,” says Tom.

The rule of thumb for marketing your home is to spend 1 per cent of the price you are seeking for your home. ie: if your home is valued at $500,000, a reasonable marketing spend would be around $5000. If your home is worth $1 million, you should expect to spend around $10,000.

“Spending money on a quality marketing campaign is like taking out car insurance,” says Tom. “What you’re insuring is that you don’t undersell the biggest asset that you own.”

Mistake 4 – Think the internet will do it all for them

There is no doubt that the rise of the internet has fundamentally changed property buying and selling. It is now a simple thing to type in a search criteria and have properties come to you.

But new research shows that online can get congested with a recent study from realestate.com.au showing that only 31per cent of people go as far as page two of search results. This means that if your home is further back in the field, it could be missed by nearly 70 per cent of buyers.

To combat this, online companies like realestate.com.au are introducing new products such as Premium and Highlight listings to improve both the prominence of listings and to get them into the first pages of rankings.

“Cheap though that online campaign may be, it is money wasted if all it does is act as a billboard in the woods,” says Tom.

New market insights show there are three different kinds of people interested in real estate. Active buyers who are looking to buy now, people who are monitoring to buy soon, and passive market watchers who aren’t necessarily interested in buying at all, but like to keep an eye on what is going on.

“Different media attract different kinds of buyers,” says Tom. “Online is extremely effective at attracting Active Buyers who are looking to buy now and seriously hunting and it is a great way to capture a lot of those who are monitoring the market and starting to keep a more proactive eye on things.”

But to unlock the hidden 10 per cent of your property’s value, you need to also attract passive buyers as these are the people who won’t act unless they fall deeply in love with your home. (the emotional connection element of the Premium Price equation.)

Mistake 5 – Ignore the value of print marketing

Australia’s largest property research company, RP Data now analyses the effectiveness of the different advertising media in its Media Combination Research.

More than 503,000 property transactions across the country were followed over 12 months by RP Data. The research looked at where properties were advertised, how long they appeared for, did the property sell, how long did it take to sell and what was the level of discounting?

The research statistically proved that homes for sale that are advertised in both print and online are more likely to be sold than those that used just one medium, spent significantly less time on the market and in many cases, discounted their sale price by less than those that used just one medium.

Tom says the analysis also shows that bigger advertisements in print got better results for vendors.

“The bigger an advertisement, the more expensive a potential buyer is likely to think a home is worth,” says Tom.

“The research showed that on average homes that advertised as a half page ad, were perceived to be worth 24% more than a quarter page, and a full page advertisement has a perceived value increase of 46% compared to the same home advertised in a quarter page ad.”

The agents at R&W Seaforth/Balgowlah can help you avoid these common mistakes vendors make and create the exposure you need to get the best result for your home, by unlocking it’s true value.

Cutting rates is a live option for the Reserve Bank on Tuesday, though a rule of Central Banking 101 is when in doubt don’t, so it probably won’t.
But with its extraordinary knack of knowing what the Reserve will do even before it does, the bond market is saying there’ll be a rate cut by July and another by November.

How do I know that?
The yield on a two-year bond has flipped over, so at about 2.5 per cent pays less than the 3 per cent official overnight rate.
That only happens when the market thinks the economy is weakening to the point where rates have to drop. And the gap suggests two more rate cuts.

It’s the futures market that’s plumped for the timing, so take that with a grain of salt.
Since the Reserve’s board sat last month the global economy has taken a turn for the worse. China is growing by less than was thought and the automatic cutbacks in government spending required by Congress are beginning to bite in the US.
Back home the blowout in the budget deficit disguises how tight it really is.
It will have shrunk from $44 billion to, probably, $11 billion in 12 months. It’s no surplus, but it’s no stimulus either. And I trust the Reserve watches the weather forecast, too. Large farm areas are moving back into drought.

Australia is veering dangerously close to deflation because of the strong dollar.
In the March quarter the annualised inflation rate – that is, multiplying it by four, which is legit when it’s seasonally adjusted – was just 0.4 per cent.
The only reason there’s any inflation at all is because everything that has anything to do with the government and so has no real competition – electricity, water, schools and health, to name the worst offenders – has been rising 5 per cent or more.
An exception has been the fact that rents are rising by 3 per cent to 4 per cent annually because so few new places are being built, which is one of the Reserve’s biggest worries.
Housing is supposed to take up the slack when the mining investment boom runs out of puff.
But where there’s competition, especially from imports, prices are falling by an annualised 4.8 per cent.
Yet Treasury and the Reserve Bank had been predicting inflation would rise this year. Treasury’s problem is that this disinflation knocks some of the value off the national output.
This in turn cuts reported profits and so the government’s tax take.

For its part, the Reserve has to contend with the fact that the strong dollar has squeezed whole sectors of the economy into recession. In which case why would the board hang back when it meets on Tuesday?
Good question. For one thing, it can’t be sure what the dollar’s going to do next.
It might be overvalued but you don’t know how much pent-up inflationary pressure might be lurking in the background.
And since it’s been saying previous rate cuts are starting to work, bringing on another so soon might look a tad odd.

Friday the 3rd of May was Starlight day.  The Richardson & Wrench network supports this cause for helping sick children.

The staff at R&W Seaforth/Balgowlah took it in turns of 20 minute intervals to stand out the front of the office and ask those walking by if they would donate to the cause or buy some merchandise to help sick kids.

A special thank you to those who were out and about in Seaforth & took the time to donate & chat with us.  We raised $ 275 on the day & continue to raise money for the charity throughout the year.

More than 100 R&W offices across NSW and Queensland will benefit from the partnership, which will give clients access to lower interest rates and faster loan approval times later this month.

Executive director at R&W Corporate, Andrew Cocks, said the positioning of broking services within real estate operations reflected the changing demands of property buyers.

“Real estate and finance are interdependent, so it’s a huge benefit to clients if you can streamline the process and offer convenience as well as a superior home loan,” said Mr Cocks.

“The principals of Shore Financial have the credentials and the drive to add real value to the R&W business and our customers.

“Over the past two years we have expanded the network, but just as importantly, we have broken out of the traditional real estate mould by embracing new technologies, marketing platforms and now a new financial service offering.”

Shore Financial managing director Alex Nochar said the Richardson & Wrench partnership created an opportunity to offer broking services through a network with a commitment to innovation.

“We found Richardson & Wrench to be a really exciting brand, very much aligned with our own passion to provide high quality service to people looking to buy property,” said Mr Nochar.

“The group already has 100 offices and sells thousands of properties a year and, like us, is in expansion mode.”

Mr Nochar and Mr Chambers have a lengthy history in the broking channel, claiming Shore Financial has preferred broker arrangements with lenders, access to lower interest rates, faster loan approval times and the ability to pre-approve a broad range of clients.

Mr Cocks said the Shore Financial Partnership continued the real estate network’s commitment to adding value to its offering to franchisees.

“We’re about to head into the Year of the Snake, they say, which indicates we’re destined for steady progress and attention to detail. It could well apply to the luxury property market this year.

Market sentiment is certainly changing, which has resulted in increased inquiry while other positive aspects are starting to unfold at the very top end of the market.

I can feel in my bones that things are about to improve. The Chinese – and other foreign buyers – will be involved in the recovery of the Australian prestige property market this year.

Of particular note was the introduction of the Significant Investor visa, which appears mainly geared towards the Chinese, where $5 million placed in “endorsed investments” is a method of gaining permanent resident status or citizenship.

The top end of the residential market has been intriguing to watch over recent years.

In 2008 when all asset classes, including property, were dropping there were more sales over $20 million than any other.

More fascinating was the fact that 60 per cent of these sales took place in the four months after the collapse of Lehman Brothers and the prices of these $20 million-plus properties were higher than what could have been achieved in 2007.

The number of prestige sales dropped off soon after – particularly in the financial year to July 1 last year.

The two highest eastern suburbs sales were $15 million. The highest sale nationally was $22 million in Palm Beach and the next three highest sales being $20 million, $18.5 million and $18 million, were in Mosman, both markets which had received much negative press.

The past 20 years appears to have been an aberration driven by debt, which resulted in extraordinary capital gain in all asset classes.

It appears we are now going back to an equity/savings driven environment, by this I mean an aversion to being too highly geared has returned. The end result may be more realistic capital gain but still a solid reason to acquire property.

While improvements in the sharemarket results in an increased monetary flow the major effect is an increase in buyer confidence and lack of confidence has without doubt had the most damaging impact on the prestige market.

Many clients are cashed up so as confidence build more buyers will act.

Our activity in December and January certainly suggests this will be the case as we have increased interest from buyers wanting to purchase, and in particular offshore interest.

Although in the past two years there have been many Chinese buyers inspecting property, the irony is that the Chinese have not been major players at the top end of the market. In the top sales I referred to for 2011/2012 there was only one Chinese buyer as was the case in 2010/2011.

However, the impact of Chinese buyers on established property has only been demonstrated the since the introduction of the Significant Investor visa, or 888 visa, so Chinese buying activity is sure to increase this year.

Some of our recent sales have been due to our understanding of, and accommodating the fact, that the majority of foreign buyers are experienced in private treaty negotiations but are not familiar with the auction or expressions of interest process.

Ironically, the high Australian dollar is not impacting on the established prestige homes market. This is partly due to the international perception that Australia has a strong economic future, many lifestyle advantages and is strategically positioned in the Asia Pacific region.

The interest is not only from Asia, many foreigners from the hardest hit European economies, such as Spain, Greece and Ireland, see Australia as an escape from a generation of economic rebuilding and a blue chip place to invest long term.

Readjustment of buyer and seller expectations over the past few years is yet another reason the prestige market is destined for improvement.

The amount of prestige property is drying up. At some price points, particularly in the double digit price range there is actually an under-supply of quality stock so it will be interesting to see what new stock comes to the market in the first quarter of the year.

Finally, all buyers should remember that it’s the year of the snake: steady progress and attention to detail. So rather than trying to find the biggest discount, make sure you choose quality. Focus on inherent asset value or lifestyle advantage.”

Ken Jacobs prestige, exclusive affiliate of Christie’s International Real Estate.

Market sentiment is certainly changing we are seeing a readjustment of buyer and seller expectations. Australia has a strong economic future, many lifestyle advantages and is strategically positioned in the Asia Pacific region. The Chinese year of the snake will see a resurgence of the prestige property market.

“Australia’s largest home lender made a net profit of $3.66 billion in the six months to December 31, up one per cent on the same period in the previous year.

Its cash profit, a measure preferred by banks as it illustrates underlying performance, was up six per cent on the previous corresponding period to a record $3.78 billion.

The better-than expected profits pushed CBA shares to a record high, and put the bank on track for another record full year profit near $7.6 billion.

CBA’s retail bank was a standout performer in the six months to December, in part due to higher margins as interest rates fell by less than the cash rate.

The Reserve Bank of Australia cut the cash rate by 125 basis points to three per cent in calendar 2012, while CBA’s standard variable mortgage rate was cut by just 90 basis points to 6.4 per cent.

With the cost of wholesale funds easing, analysts have raised the prospect of major banks lowering interest rates outside of any further moves by the RBA.

CBA chief executive Ian Narev on Wednesday confirmed that could happen.

“I’m not allowed to say anything on future prospects for pricing,” he told reporters.

“What I could say is that it is a competitive market, and if we reached a different environment in terms of both the volatility and the cost of funding, that is conceivable, yes.”

But he said the cost of attracting deposits from consumers still focused on saving rather the spending continued to negatively impact profits being made from deposit accounts.

Nonetheless, Mr Narev issued a promising outlook for the Australian economy, another factor behind the bank’s strong share price rise. Improvements in Europe and the United States had reduced the level of global economic volatility in recent months, he said.

“That volatility will remain lower, and as it keeps remaining lower month on month, we will see a slow and steady rebuilding of confidence in the Australian economy from both consumers and businesses,” Mr Narev said.

The bank also increased its interim dividend to shareholders by 20 per cent from a year ago to $1.64.

Morningstar analyst David Ellis described CBA’s result as “a cracker”, well ahead of expectations of a cash profit of $3.7 billion.

“Australia’s largest bank continues to prosper due to better margins, higher trading income, a recovery in wealth-management and productivity improvements,” he said. The company’s shares gained $1.59, or 2.43 per cent, to $67.11, after hitting a record high of $67.38 during the day.”

A house filled with beautiful, comfortable furniture which perfectly complements the home can go a long way to making people long to live there. If everything looks damaged or battered it can also cast serious doubts on how well the property has been cared for, making people more likely to look for flaws in the permanent fixtures.
One of the most important things to consider is what is being done to other properties for sale in the area. In some neighbourhoods brightening up the look of a property can be an easy, effective way to make it stand out dramatically from the crowd. But it may be more fundamental than that – if all the other comparable properties already present at a high standard, an overhaul might be essential just to achieve any interest at all, unless the owner is willing to drop the price just to get people in the door.
How can you change the whole image of a property without expensive renovations?
Updating the furnishings can be the most simple, effective solution. If the house has some particular period characteristics or a distinctive design then bringing in some furniture in the same style can be an incredibly effective, subtle way to highlight the features and show them to best advantage. If there is nothing exceptional about the home then a standout piece – such as a dramatic four poster bed – could change the whole atmosphere.
The goal is to make the property as memorable and desirable as possible.
How much time and expense is it worth investing?
If the cost is too great then it’s unlikely to be recompensed in the sale price, but the cost of not making some simple changes could be months of frustration and inconvenience, ending in a lower sale price.
It’s unlikely that the vendors will want to buy any new furniture unless it is likely to be a good fit for their new home. The 6 – 8 week lead times on some types of furniture deliveries can also make this an impractical option. One alternative is to take out some of the existing furniture and restore the rest, eg. Fresh covers on sofas, painting chairs & tables, or buying new bed linen. This could be an appealing approach for the vendor since it means they’ll be taking smart, refurbished furniture with them when they start fresh in their new home.
The third and increasingly popular option is hiring. Furniture rental firms offer quick delivery, flexible rental periods and reasonable costs. Depending on what they need and how long for, the cost to the vendor cost could be as little as a few hundred dollars – although there may be additional costs if they need to store their existing furniture.
Many rental firms offer a specialist ‘property styling’ service especially for property vendors, and some even provide complementary interior design advice. They carry a wide range of furniture styles so they easily can match some of the seller’s existing items, or create a completely fresh look for the property. They take care of delivery and collection, set up appliances ready for use, and make sure everything is placed exactly right. So if you find a property in desperate need of a restyle, furniture rental could be the low-cost, easy answer you need.

R&W are experts in restyling properties & have many contacts that are able to help you make your property desirable to a larger market. For further information call us on 9948 7080

“The spring season has emerged as the best time to tempt buyers and sell property, but the results of the federal election in September could have a big effect as well.

Data released by the Real Estate Institute of NSW (REINSW) has revealed that the best auction clearance rates for 2012 were recorded during September.

According to sales results reported to the REINSW and real estate website propertydata .com.au, there were 20,037 auctions in NSW in 2012, with an average clearance rate of 62 per cent, and the total value of all properties sold reached almost $8 billion.

April and September had the highest number of auctions, with 2241 in April and 2233, respectively, with a clearance rate of 62 per cent, which would have been aided by the government’s decision to cut first-home buyer incentives for existing property from October 1, 2012.

However, rather than being a true indicator of the performance of the market overall, the slower activity of these months is attributed more to seasonally recurring patterns, with most buyers busy enjoying themselves during the festive season instead of house hunting.

A recent update from the REINSW highlighted the fact that spring is a time of renewal in the property industry. The warmer weather means people can show off the positive aspects of their homes at a time when many buyers are ready to pound the pavement to look for a new place to live.

But 2013 could pose a different story, with the federal election due to take place on September 14.

Historically, buyers and sellers have preferred to wait for the outcome of elections before making important decisions, meaning there is a likelihood of subdued market activity running up to election day.

While consumers are likely to hedge their bets and wait for the outcome in early spring, clearance rates could potentially rise in the months after the election.

Either way, spring 2013 may well see new occupants in The Lodge, even though the property is ”Not for sale”!”

Written By Winston Sammut, the managing director of Maxim Asset Management.

Read more: http://www.smh.com.au/business/property/poll-may-take-spring-out-of-buyers-step-20130208-2e3ds.html#ixzz2LDmwkbHf

All these questions will no doubt be answered in time.

In the lead up to Spring we saw a positive shift in the market over winter with buyers more eager to produce offers across a wider range of properties. This has been at least partly fuelled by the Reserve Bank dropping interest rates in May & June and the projected trend to continue sideways for the next few months – with some economic commentators predicting another drop in rates before the end of the year.

As we move through Spring we are still likely to see a spike in volumes which are likely to peak in October. In our office – we are seeing the encouraging sign of a number vendors looking to move before Christmas, which will gear towards a strong finish to the year.

Considering buyer activity, we have seen a shift in the buyer mentality over the past few weeks.

Earlier this year we saw buyers operating differently at various price points. Properties in the early Millions & below were tracking quite well with balanced supply & demand. As the price levels escalate, the balance of supply and demand moved dramatically into the buyers favour.

More recently we have seen the balance return towards the equilibrium point of supply & demand at all price points with the greatest shift being to the prestige market above $3 million.

When comparing buyer activity on properties within the same price points we are seeing a strong trend of buyer preferring to securing properties that they don’t need to do any work to. Overall well-priced properties are attracting solid buyer interest, while any home perceived as slightly over-priced or not well located struggling to attract interest.

Based on feedback we are getting from our clients, we are finding that the motivation of most people looking to buy & sell is being determined by the desire to get on with life & secure a home better suited to their needs – independent of the market.

We are still seeing opportunistic buyers seeking to strike in a down market, these individuals are certainly coming second to genuine buyers willing to negotiate a fair price as they are seeking the ideal local home that matches their lifestyle. In any case, the key to securing a sale in any market climate is to seek professional advice and position your home according to the market conditions at that moment.

For those considering selling – there are advantages to trading up in the current market. Due to the days on the market being longer than in a sellers’ market, once you have sold your property, you can take your time choosing your next purchase without having to watch the gap between the price you obtained for your original property and the price you have to pay for their next one increasing by the day.

For those who are looking to sell their current home for more than what they are looking to spend on their next home – now may be the time to sit down with a financial advisor to discuss the long term investment opportunities & what can be done with the balance not spent on your next home. Which can still mean that its worthwhile selling in the current market & moving on with life!

As always, the current market trends present opportunities for both buyers and sellers – if you would like to develop a greater understanding of what is happening in the market at your specific price point, feel free to give us a call on 9948 7080.

Wishing you all the best in achieving your property goals,

Tim Wirth & the Team at R&W Seaforth/Balgowlah.

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*Sales are as reported by Australian Property monitors