MOVE Real Estate - Lets MOVE: An overview of the sale process

Let’s

An overview of the sale process

Agents | Auctioneers | Property Management moveagents.com.au

WELCOME TO

MOVE

Selling Real Estate has changed and ‘big’ is no longer ‘better’.

Every agent can access all the tools required to sell your property, particularly with the internet and changes in technology.

We believe the following factors now determine the price you get, how long it takes to sell and the quality of your sale experience;

Will you experience a timely sale with a very good result and minimum of fuss, or will it be stressful and drawn out?

• t he professional expertise, negotiation skills and experience of your Agent • t he advice and communication that you receive through the sale process

Whether you’re selling a property in Adelaide’s inner metropolitan area, or down on the South Coast, MOVE offers you a refreshing, contemporary alternative that is professional, personal and supereffective.

• t he quality of marketing and information provided to buyers

We look forward to helping you with your real estate requirements.

• t he intelligent use of technology to generate buyer competition for your property

Note to South Coast property owners: Many South Coast buyers have an Adelaide home they need advice on and may need to sell, as part of their ‘move’ to the South Coast.

At MOVE, we provide a one-stop-shop to help them co-ordinate their purchase.

Thank you Thank you for the opportunity to advise you on the sale of your property.

Choosing an agent and deciding how to sell your property can be a confusing task.

Make the right choices and everything will go smoothly with a positive experience.

Make the wrong choices and it can cost you a lot in time on market, lost opportunity and a lower sale price.

To help you make the right choices with confidence, this booklet gives you an overview of the real estate sale process, the important dynamics involved and the options available to you.

In due course, I look forward to covering this information in more detail with you. And at the end of your evaluation process, I hope that MOVE will be your Agent of choice.

Nicholas Baranikow Managing Director and Master Auctioneer 0400 601 100 | nick@moveagents.com.au Experienced | Professional | Down to Earth

Experienced

Professional

Down to Earth

Nick has been selling real estate for over 35 years and has dealt with every possible situation.

• P ast Board Member, Real Estate Institute of SA

If you want an Agent who is ‘glossy’, ‘pushy’ or ‘gushing’ … I’m not your agent.

This means you will have a mature professional with exceptional sales, marketing and negotiating experience, handling the sale of your property.

And it’s that calm, confident, ‘cool under pressure’ presence that can deal with any issue that may arise during your sale, so your interests are protected and your sale result is optimised.

• P ast President, Society of Auctioneers & Appraisers (SA) • M aster Auctioneer and Golden Gavel Auction Champion • Multiple Sales Award Winner • C ompany Director for over 25 years

If you want a focussed, reliable, friendly and down to earth approach with a touch of humour thrown in, then I’m your man.

I will always advise you as it is, without varnishing the facts and details.

Better still, you should have a look at what my past clients have to say.

The best time to get the best price • T he first 6 weeks on the market is the positive selling period • T he first 3 weeks on the market is the ‘New Release’ phase on the market and the perfect time to sell • B uyer interest drops significantly after week 6

The Price Pyramid

How the Real Estate Market really works Before we look at the sale process, it’s important to understand the psychology of the real estate market and how the dynamics of buying and selling integrate with each other.

So let’s review the Three Golden Rules:

1 The first 6 weeks on market is the positive selling period and the first 3 weeks, the New Release phase, is the perfect time to sell.

This is when all the ‘A-Grade’ (hot) buyers present themselves and we can generate emotional competition, if the property is marketed properly and the right selling method is utilised.

2 Buyers start looking for a property ‘logically’ at a lower price that suits their budget comfortably, and then finally buy a home ‘emotionally’ at a higher price, if the sale/negotiation is structured properly.

3 Buyers don’t pay more for a property just because the Vendor sets a high price.

In fact, ‘overpricing’ could have an adverse effect on your sale as it might take longer to sell, may require several price reductions and usually ends up selling at a much lower price than could have been achieved.

A buyers journey from the base of the Price Pyramid, where they start ‘logically and low’, to eventually buying ‘emotionally and high’ at the Price Peak has three stages:

First Stage

Second Stage

Third Stage

It is essential that the property is picked up by a buyer’s ‘price radar’, so they are compelled to spend their time and effort to inspect the property.

So now we get buyers inspecting the property. If they like it, their emotional interest is now engaged and their price decision now changes quite dramatically from;

A professionally managed selling strategy will create emotional interest and generate buyer competition, resulting in a sale to the best buyer who is prepared to pay the highest price with the best terms.

If the price/range set on the property is beyond their ‘price radar’, they won’t inspect the property and the journey up the Price Pyramid does not even start.

“What do we prefer to pay?” (logical and low) TO

“What are we prepared to pay?” (emotional and higher)

The 5 ‘P’s of the Sale Process Now that we understand how the market works, let’s look at the 5 P’s of the Sale Process:

1

Price

2

Presentation

3

Process

4

Promotion

5

Performance Fee

how do we estimate the Market Value of your property?

what should you do to present your property for sale?

what selling method should you use?

what are the marketing options for your property?

what do you pay us?

1

Price how do we estimate the Market Value of your property?

At MOVE we estimate the Market Value of your property on two levels: • Technical Value and • Potential Emotional Value

Technical Value (TV)

Potential Emotional Value (PEV)

Technical Value is an objective assessment of a property’s market value which takes into account recent comparable sales, underlying land

A property can also have a higher Emotional Value to one or more special buyers and this can add a price premium of 5%-10%, or

value and a market value for the residence and improvements.

sometimes even more because it’s impossible to measure emotion.

This is very similar to what a Valuer would do and is also called ‘Cold Value’ or ‘Bank Value’.

These special ‘A-Grade’ buyers always present in the first 2-3 weeks on the market when the property is a ‘New Release’.

They are highly motivated to buy, may have missed out on some other properties and they will act as soon as the right home comes onto the market.

They are also prepared to compete for the property and can usually buy cash-unconditional.

2

Presentation what should you do to present your property for sale?

This is all about taking your home from ‘Live In‘ mode to ‘Sale’ mode.

At MOVE, we have a comprehensive e-booklet, Dress to Impress, which provides you with all the advice and information you need to create a fantastic first impression.

We also have access to a great team of Trades and Stylists that we can recommend to you.

If it’s a major job, or you are time poor or perhaps you would rather leave it to the experts, we have specialist Project Managers who can coordinate the entire sale preparation process for you!

3

Process what selling method should I use to sell my property?

At MOVE, we offer three methods of sale: • Asking Price • Set Dale Sale (SDS) • Auction

Method 1: Asking Price • A basic selling method where the property is advertised with an asking price or price range • T here is no deadline to the sale so buyers can procrastinate

• B uyers can make offers with conditions; for example, subject to finance approval and/or a satisfactory building inspection • B uyers have a Cooling-Off Period so they can cancel the contract within 2 clear business days after purchase

Method 2: Set Date Sale (SDS) … a superior alternative to ‘Best Offer’ or ‘Expression of Interest’ Set Date Sale is an Online Offer-Tender System that we have developed and is far more effective and flexible than Best Offer/Expression of Interest, and it eliminates the disadvantages of these methods.

buyer competition for your property, yielding the maximum sale price within 2 to 3 weeks (or less) on market.

Set Date Sale is presented in our marketing information as follows: Set Date Sale: Registration of Offers close on Tuesday <date> at 6pm, unless sold before

It also incorporates some key features of the Auction process to create strong

This is how it works: • T he property can be sold at any time from day one, but there is a deadline for buyers to register their Offer, which eliminates buyer procrastination • B uyers must register online to participate in the sale via our Online Offer System. As Vendor, this allows you to see how many genuine buyers are engaged in the process and the offers that are being made in real time • I n the first phase, the offer amounts made by each buyer is not disclosed to other buyers, but buyers can see if other offers have been made and if they hold the highest offer or not

• A s Vendor, you can also decide if you will also consider conditional offers (subject to finance approval, building inspection etc.) or whether offers must be unconditional For example, you may initially open the sale to conditional and unconditional offers, but as the sale campaign progresses you may decide to only deal with buyers who make unconditional offers • W hen Registration of Offers closes, you can either sell to the best overall offer (based on the price and terms of the Offer) OR you can go into an Auctionstyle process where all Offers are then disclosed and buyers enter a final bidding phase, until we reach the Best Final Offer and then you make a sell decision.

Method 3: Auction We offer two forms of Auction; • Traditional Onsite Auction and • Digital Online Auction Key advantages for a Vendor using either form of Auction are: • T he Auction is a final deadline, so buyers cannot procrastinate … they must act and make an offer/bid • A ll offers/bids must be unconditional; they cannot be subject to finance approval and/or building inspection • B uyers do not get a Cooling-Off Period so they can’t change their mind after they have contracted on the property

Traditional On-Site Auction

The Auction is held onsite at the property after a 3-week campaign

Digital On-Line Auction

• B uyers must register to participate via our on-line Bidding Platform in order to make offers/bids and to see other offers/bids • A s Vendor, this allows you to see how many buyers have registered a bidding interest and any pre-Auction offers that are made on our system in real time • T his form of Auction removes any risk of weather impacting the Auction • T his method is also very convenient for both buyers and the vendor as there is no need to hold it on a traditional Saturday or Sunday time slot and compete with other Auctions, school sport etc.

For example, we can hold the Digital On-line Auction on a Thursday evening at 6:00pm.

• B uyers can bid on our online platform from the comfort of their home or office • V endors can observe the Auction online in real time from the comfort of their home or office, no matter where you are

4

Promotion what are the marketing options for your property?

Our marketing team can tailor a cost-effective campaign for your property, so it’s guaranteed to be seen by every potential buyer.

This can include a mixture of online marketing, social media and print advertising, depending on what budget you want to invest.

Off Market / ‘Sneak Peek’ If you are not ready to commence a full marketing campaign or perhaps prefer to initially test the market, we can pre-release your property on MOVE Off-Market to our registered Priority Buyers.

This takes place over a 1-3 week period before a full market release, giving you the opportunity to sell quickly and discretely, if a premium offer is made.

If that doesn’t eventuate, you can either leave your property in Off-Market mode for new Priority Buyers who visit our web site, or you can escalate into a full market campaign.

moveagents.com.au Our state-of-the-art website is integral to the marketing of your property and the conduct of the sale process. It has been designed with simplicity, easeof-use and a clear display of detailed property information from one page, as the primary criteria.

For example, a buyer can easily access all the information on a property, as well as arrange an inspection, from a single web page via a series of tabs:

5

Overview / Gallery / Floorplan / Site Plan / Video / Details / Inspect The Details tab takes a buyer to a detailed information summary on the property.

This sets out literally everything a buyer might want to know about the home from ‘A to Z’ (Air-conditioning to Zoning).

This information is also incorporated into our sophisticated brochures, so buyers can conveniently review everything about the property, after they have inspected it.

Performance Fee what do you pay us?

We have a Performance Fee Schedule which we use as a foundation to tailor a value-for-money package in discussion with you.

Buyer Inspection Options At MOVE we offer two formats for buyer inspections; Open Inspection and Inspection by Registration

Open Inspection

Inspection

by Registration

This is the traditional form of inspection in Adelaide; very easy and convenient for buyers to attend.

• W e pre-set inspection sessions one week in advance (30 minutes to 45 minutes sessions depending on the size of the property) • B uyers have to register online on our web site to inspect at these times • T hese times are not advertised publicly • T his format will engage the serious buyers and will generally ‘filter out’ people who are ‘just looking’ or any ‘nosey neighbours’ • W e will also know in advance who will be attending the inspection sessions

The Steps to Selling your Property

• Activate Sales Agency Agreement • Property is prepared for sale • L egal Searches, Contract and Form 1 are prepared • M arketing Copy and Features Summary drafted; sent to Vendor for approval • P hotography, Floorplan, Site Plan, Video are done • Brochures prepared • MOVE Sale Sign ordered and installed

• O ff-Market Pre-Release if designated by Vendor, OR • F ull Market Release via web sites and social media, initiating a 3 week campaign (unless sold before) • I nspection sessions: 2 open inspections each week of the campaign + by appointment if required and authorised by Vendor • R egular Market-Buyer updates + Weekly Campaign Reviews

• R egistration of Offers closes or PreAuction Meeting, depending on method • F inal negotiations or Auction • S OLD in 3 weeks or less!

Newspaper Advertising Saturday Advertiser Real Estate Magazine: online display + paper lift-out

moveagents.com.au Resort style living 3

A

1

B C EG 3

H 300m L 1200m 2

3

2

Auction: Friday 26th Sep @ 1pm Guide: $910,000-$1,000,000 Open: Sat 1-1.45 & Sun 2-2.30pm Perfectly positioned at the end of quiet street.

Impressive family home that ticks all the boxes!

213 Everest Street

TOORAK GDNS Nicholas Baranikow

Eighth Page Ad Design Example (Shown at 100% of full printed size)

0400 601 100

RLA292077

moveagents.com.au

Resort style living 3

A

1

B C EG 3

3

H 300m2 L 1200m2

Auction: Friday 26th Sep @ 1pm Guide: $910,000-$1,000,000 Open: Sat 1.00-1.45pm & Sun 12.45-1.30pm

213 Everest Street

TOORAK GARDENS Nicholas Baranikow

• Perfectly positioned at the end of quiet cul-de-sac • Impressive family home • Beautifully presented • Ticks all the boxes!

0400 601 100

RLA292077

Quarter Page Ad Design Example (Shown at 100% of printed size)

Form R1 Sales Agency Agreements Rights & obligations of vendor

Land and Business (Sale and Conveyancing) Act 1994 section 20(2) An agent must give you, the vendor, this guide outlining your rights and obligations before making a sales agency agreement with you.

Choosing an agent Agents, including companies that are agents, must be registered under the Land Agents Act 1994. You can check whether they are registered on the Consumer and Business Services website: www.cbs.sa.gov.au.

Choosing the best real estate agent to negotiate the sale of your property is important. The services provided and the associated costs may vary significantly so it is a good idea to obtain advice from several agents before signing an agency agreement. You should ask them for their proposed marketing plan — what they will do to market your property and what will be your financial contribution to the marketing of the property.

It may not be in your best interests to choose the agent who provides you with the highest estimated sale price of your property because this price may be unachievable and could delay the sale.

When the agent provides you with an estimated sale price of your property you should ask how they have determined the estimated sale price. It is a requirement to include recent sales figures for comparable properties in your area and any other information the agent relies upon for their genuine estimate of the selling price in any sales agency agreement you choose to sign with an agent. You can also engage a qualified valuer to prepare an independent valuation if you so choose.

Role of the agent When you list your property with an agent, you are employing them to sell your property for a price that is acceptable to you. The agent should always act in your best interest and engage in good business practices. The agent will charge a fee for their services either in the form of a commission, a set fee or a combination of both.

The agent should outline a marketing plan for your property and undertake various searches. You can generally expect the agent to: • advise on a method of sale • advertise and market the property • organise and attend open house and other inspections • attract prospective buyers • communicate offers to you • organise an auction, if this is the preferred method of sale • arrange the signing of the contract of sale • assist in the preparation of the disclosure statement to be given to the purchaser.

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The sales agency agreement An agent must not act for you unless they have been authorised by a sales agency agreement that is dated and signed by you, the vendor, and the agent. This contractual agreement sets out the rights and obligations of both you, the vendor, and the agent. A copy must be given to you when you sign it or at a later time within 48 hours as agreed by you and the agent.

Every sales agency agreement for residential property must include: • a description of the land that is the subject of the agreement • your full name and that of the agent • the agent’s registration number • the chattels that are included in or excluded from the sale • the services that will be provided by the agent or another person for which you will be separately charged (e.g. advertising and marketing) • the nature, source and amount of rebates that the agent expects to receive in relation to separately charged services (e.g. advertising and marketing) • details of the circumstances in which the agent will be entitled to receive commission or fees for the sale of the land, and also the circumstances in which the sale may not be attributable to the agent • the duration of the agency agreement (maximum term is 90 days for sale of residential land) • the agent’s genuine estimate of the sale price of the property (a single figure) • the selling price you are seeking or would accept (a single figure) • comparable sales data and any other information the agent relies upon to support their estimate • the manner of sale of the property (e.g. auction, private treaty or tender) • your rights to terminate the agreement • whether the agreement is a sole agency agreement • whether the agent has authority to accept an offer for the property on your behalf • a term warranting that the agent will comply with the Act and will act in your best interests.

Advertising and marketing The sales agency agreement must specify all services that will be separately charged for, including advertising and marketing, and whether those services will be provided by the agent or by a third person. Amounts to be charged for the services and the time for payment must also be specified.

You should make sure you have a clear understanding of how the agent intends to market your property and what this will cost you. The cost of advertising and marketing a property varies significantly depending on the type of advertisement and where the advertisement will appear, e.g. the internet, The Advertiser. Some agents may charge a low commission rate but charge more for marketing and advertising your property.

You may be charged the up front cost of advertising with a particular publication, but agents commonly receive a rebate as a result of placing large numbers of advertisements.

You should make sure you ask the agent questions about the amount of advertising rebate that the agent expects to receive. You are within your rights to negotiate with the agent to receive some benefit from those rebates.

You should determine whether the amount you are paying for advertising and marketing a property is reasonable. The agent must disclose the nature, source and, if known, the amount or value of any rebate, discount, refund or other benefit they expect to receive in relation to these services. You can also include in a sales agency agreement a clause requiring the return to you of some or all of the rebate when it has been paid to the agent.

July 2016

You must also ensure that any information provided to the agent about your property is factual and up-todate. If a buyer can show that advertising of a property is false or misleading, the buyer may be able to take legal action. Under s36 of the Act, significant penalties apply to making false or misleading representations for the purpose of inducing another person to purchase a property.

Duration of the agreement You should consider the length of the sales agency agreement because you may be obliged to continue under it even if you are unhappy with the services provided by the agent.

Under the Act, the maximum duration of a sales agency agreement is 90 days.

Towards the end of the sales agency agreement, you and your agent may decide to extend the sales agency agreement or enter into a subsequent or new sales agency agreement.

Price In a sales agency agreement the agent must specify the agent’s genuine estimate of the selling price of the property. It is important to note that this genuine estimate is not a valuation but rather the agent’s best estimate of the likely price you could expect based upon a whole range of factors – it is in no way any guarantee that you will receive that price in the market place. The price must be expressed as a single figure without any words or symbols (eg $300,000). In addition, the agent must provide you with details of sales of comparable land and any other information on which the agent will rely in support of their genuine estimate of the selling price.

The agreement must also specify a single figure sale price for the property that you would find acceptable to ensure any price advertising is not misleading or deceptive. If you are auctioning your property, you cannot increase your acceptable price in the agreement.

To help you decide on a price you should: • consider the agent’s estimated selling price • research sale prices in your area • consider seeking an independent valuation by a qualified valuer • not allow emotion to cloud your judgment.

Having a realistic idea of the likely sale price of your property will help you avoid both disappointment and the risk of purchasing another property based on an unrealistic expectation of the sale price of your own property.

Prescribed minimum advertising price The price that you and your agent list in the sales agency agreement will affect the price for which the property can be advertised. For example, if you advertise a likely sale price for your property, the price cannot be lower than the higher of the: • •

amount you specify as acceptable in the sales agency agreement and amount the agent has estimated as the sale price.

Reserve price The reserve price for the land must not, at any time before or during the auction, be set at an amount exceeding 110% of the amount that you have specified as your acceptable price in the sales agency agreement.

For example, if you specify $400,000 in the sales agency agreement as your acceptable selling price, then the reserve cannot be more than $440,000.

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Manner of sale The sales agency agreement must specify the manner of the sale.

The most common ways to sell a property are by auction or private treaty. Your agent should advise you of the most appropriate way to sell your property. You should ask the agent about the advantages and disadvantages of both methods of sale before you decide what to do.

Termination of the agreement A sales agency agreement must specify your rights to terminate the agreement. An agreement may limit your rights in this respect to certain circumstances, or provide for costly termination fees. An agreement may also deem termination to occur in certain circumstances; for example, if you sell the property privately, or through another agent. In such circumstances, depending on the agreement, the first agent may still be entitled to a commission. You should seek independent legal advice if you are unsure about your rights or the consequences of termination of an agreement.

Sole agency agreement The agreement must specify whether the agreement is a sole agency agreement.

Sole agency agreements are the most common form of agreement in South Australia. Your agent will most likely suggest a sole agency agreement, particularly where sale is to be by auction.

Under a sole agency agreement the agent has the exclusive right to sell the property and is entitled to receive the agreed commission whether or not they are the one to actually sell the property. In other words, if you sell the property yourself you will generally still have to pay the agent their commission. This will depend on the wording of the agreement.

Authority to accept an offer The sales agency agreement must specify whether or not the agent has authority to accept an offer on your behalf, for example when circumstances make it difficult to contact you at the time an offer to buy the property is made.

If an agent signs a contract of sale on your behalf, then the contract is binding on you. So, if you think it is appropriate for the agent to be able to accept an offer on your behalf then the contract should clearly state when and in what circumstances you consider it acceptable for the agent to accept an offer.

If, on the other hand, you retain the right to accept an offer yourself, then your property cannot be sold unless you agree to the offer.

Disputes and complaints If you have a dispute with an agent you should first try to resolve it with the agent. If that is unsuccessful, you can contact Consumer and Business Services on 131 882 for advice.

If you engage a Conveyancer or legal practitioner for selling a property, a formal process to verify the identity and right to deal applies. Your conveyancer or legal practitioner must sign the settlement documents on your behalf and have a Client Authorisation signed by you to do so.

Disclaimer: This publication is a plain language guide to your rights and responsibilities. It must not be relied upon as legal advice. For more information please refer to the appropriate legislation or seek independent legal advice.

July 2016

Level 3, 169 Fullarton Road, Dulwich SA 5065 RLA 292077

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