What makes a good real estate sale?

Scott Kennedy-Green on the ins and outs of a good real estate sale

Residz Team 5 min read

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“Who’s ready to celebrate?”

Given pressure on real estate right now, I’m listening closely to my home auction clients when they say they feel grateful or lucky for a good real estate sales result. As an accomplished professional with high integrity, I take pride in how years of hard work, and ongoing learning does maximise the chances of consistent good results. It’s usually but not always about price, and that leads me into a discussion about what makes a good home sale.

Working with both seller and buyer

It’s said a real estate agent acts on behalf of the seller, after all it is the seller who chooses the agent to promote their property and find potential buyers. Maximising the return for the seller would, therefore, be the logical litmus test for a successful deal.

However, real estate agents also act for buyers keen to find homes which suit their needs. Buyers may or may not have the time and expertise to comprehensively cover what this looks like. So, in fact, it’s the bringing together of buyer and seller, both ready, willing, and able to do the deal, which is at the heart of a good real estate sale.

Below I list some of the considerations for a successful home sale.

Flexibility

COVID-19 taught the world all about being flexible, but real estate negotiations have always needed flexible buyers and sellers to achieve the best results. Like a series of dance steps, negotiating the sale of a property usually requires a bit of to-ing and fro-ing on price and terms such as:

  • Price point: There is a sweet spot between meeting the market and paying fair value for a home. If you want to do better on price try to give the other party something in return (as below).
  • Deposit on the contract: How much, if any, of the buyer’s saved deposit is put on the exchange of contract can be part of negotiations to find a win-win solution. The usual range is between 5% and 10% of the purchase price. However, this may also be used as a negotiation point. Perhaps the seller is looking for cash as a deposit on their new home and asks for release of all or part of the deposit to them prior to final settlement. The buyer can then use this to negotiate either a reduction in price or a longer time to settle. Either way, deposits aren’t necessarily locked in stone for every deal.
  • Date of settlement: Settlement day is set by the vendor in the contract of sale after consultation with the buyer.  It is often between 30-90 days to allow for legal documentation to be complete and 42 days is regarded as somewhat standard. Some vendors may however  offer say 120 days, or alternatively to vacate early, as an inducement to buyers.
  • Possession of property: Is the property vacant when the buyer purchases it, or subject to a lease? Will the old owners want to rent it back while they wait for their new home to be ready? Remember that if you are the buyer the property is your responsibility on settlement, and that includes insurance cover.
  • Inclusions: Inclusions and exclusions can be negotiating tools too. Agreeing to buy heavy furniture may sway a seller who is downsizing. Including white goods can induce a buyer over the line.  

Repairs and Repainting

Supply chain delays, inflation, illness, and reduced immigration has made it expensive to do home renovations, repairs, beautification, or maintenance. For these reasons, repairs and repainting may be a condition for purchase (and a major area for negotiation) for home buyers in 2022.

  • Structural damage: Repairs will be needed if there is structural damage that undermines the integrity of the property. A pre-purchase building inspection and pest inspection by a qualified inspector should unearth issues on items like condition of the roof, uneven floors, ceiling leaks, wall cracks, mould, etc that can become part of the negotiation.
  • General repairs: A good real estate sale leaves both parties satisfied that the property is either in excellent repair or at a price that allows for repairs. These can include anything from a wobbly mailbox, to a cracked doorstep to a leaking tap.
  • Cosmetic improvements: Repainting a house or even a few rooms can be a very costly and time-consuming business. However, a fresh coat of paint is recommended as a good way to maximise the sale price. Occasionally in a quiet market sellers will be asked to repaint a home as a condition of sale.

No surprises or regrets

A good real estate sale should leave both parties feeling satisfied, ideally with no regrets.  However, a recent survey by Compare The Market found 45% of Australians did experience some buyer’s remorse. Given the survey covered four years to 2021, over half of respondents (61%) said they felt the pressure to buy fast due to increasing property prices. Location was a factor for 14% of buyers who had remorse. To prevent buyer’s remorse here are some areas worth researching:

  • Safety of neighbourhood: Sellers should play up their safe neighbourhood as this is a key factor for buyers. An easy way to look up crime trend data for every address in Australia is typing the address into the free property search tool website Residz.com.
  • Local amenities: A good real estate sale often depends on the buyer feeling they’ve bought into a thriving community. Lists of local amenities surrounding a property can be found by driving around the suburb, talking to local estate agents, and for free on Residz.com.
  • Bushfire risk: Residz.com gives a unique bushfire rating to every property in Australia (for free) which compares your properties risk to those of your close neighbours.
  • Flood risk: Buyers can check Residz.com to see if the property address is listed as flood prone. Recent floods across the Eastern states of Australia have highlighted this risk especially when 1 in 100 year flood zones seem to be breached much more regularly than every 100 years.

Making comparisons

In many ways a good real estate sale is a comparative indicator. Property sellers like to achieve top sales results, and buyers enjoy hearing they paid “under the market”. Hearing that a better house has come on the market, or a better price was paid for a neighbour’s home after you’ve bought or sold is unhelpful. If you got or paid a fair price and your transaction has allowed you to move forward with your life then that is a good result in my books.

Looking at the options

A good real estate sale should fit the budget and lifestyle needs of the buyer at a price that’s attractive to the seller. Factors such as distance to the coast, internet reliability, and investability might be deal makers or breakers. For this reason, a quality real estate agent will never try to fit a square peg into a round hole. Estate agents with professional integrity will direct potential clients to a more suitable area. Researching out-of-area properties listed for sale can start with property search sites such as  Residz.com, Domain.com.au, and RealEstate.com.au.

A decision every decade

Whether it’s a seller or a buyer, both at some point are likely to need an agent’s services again given quite recent data showing the average length of time properties are held by owners is around 11.3 years for houses and 9.6 years for units. Statista’s 2021 survey showed South Australians hold on to their homes the longest with average length of home ownership at 17 years (Queenslanders are 11 years in comparison).

A good real estate sale will form a story to be told to friends, as buyers and sellers who get exemplary service (or poor service) inevitably talk about it.

A good sale is never about penalising one party for the major benefit of the other party, or just for the benefit of the agent. Instead, it feels good when done for both sides, stands the test of time, and leaves no-one feeling hard done by!

Photo by Clarinta Subrata on Unsplash