Here's why some vendors are holding out for the heady sales of yesterday – and why they shouldn't
Property vendors who attempt to outsmart the market by holding out for the top dollar are bound to encounter setbacks, a real estate agent has warned.
Drew Miller, Ray White Mairangi Bay real estate agent, said mixed messages from commentators about where the market is headed are resulting in vendor confusion, indecision and, in some cases, financial losses.
“People hear that prices are trending down, then they read that some regions are recording record prices and they remember the price increases of the past and they end up making emotional decisions to hold out for prices that the market just won’t support,” Miller said.
“We have the same buyer pool as last year, but… there will be many more properties for sale because some investors are getting out due to rising bank rates. Most investors are comfortable around a bank rate of 3-4%, but with interest rates now at 7% they’re having to top up the mortgage, fix, or sell because they don’t want to subsidise mortgages from their own pockets.”
He said it will be interesting to observe the resulting vendor behaviour.
“Some vendors are meeting the market and selling, but there are some that are not meeting the market and holding out for top dollar,” Miller said. “They will end up wishing they took the first offer because the longer a property sits on a market the more buyers will begin to suspect that there is something wrong with it.”
Miller said that while prices plunged by 12.7% year-on-year, according to the Real Estate Institute of New Zealand, the last three years saw 30% increases, making a 12.7% drop “inconsequential in light of the fact that the vendor is still going to be 18% in the plus.”
To vendors looking to sell their homes this summer, he advised:
Do your homework
Have your agent compare your property to similar properties that have sold, including the benefits of each one, against your own property.
Ask for a comparable market analysis
“When you ask an agent for an appraisal, they will most likely utilise the comparable market analysis and be able to show you what prices similar houses in the area have sold at,” Miller said.
Use unbiased, factual information to make decisions
“Some vendors think their real estate agents are just after a quick-fire sale, but that doesn’t serve anybody,” Miller said. “To give yourself peace of mind, make sure you get a written report from each open home on what prospective buyers liked and disliked and how much they think your home will sell for. If your number resonates with feedback, then it’s honest information.”
Do you have a story to share about how vendor confusion has led to disappointment and financial losses? Share them below.
