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Table of  Contents  

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.

20.

Foreword       Why  I  Produced  This  Book   Introduction       Get  Your  Pricing  Right     Appoint  The  Right  Agent     Develop  A  Marketing  Plan   Crunch  The  Numbers     Run  Effective  Open  Homes   Fix  Defects         Staging  Your  Home     Should  I  Advertise  A  Price?   Selling  Privately       General  Or  Sole  Agency?     Selling  by  Auction       Selling  By  Tender       Getting  Legal  Advice     Improvements  To  Avoid     Common  Mistakes  By  Sellers   Conclusion         My  Happy  Clients      

   

                                     

 1      2      3      6    19    31    42    47    54    59    69    72    79    83    87    90    93   100   112   114  


Sold! A  Practical  Guide  To  Selling  Your  Home      

 

Chapter 1:  Foreword  

 

When Paul   Blackler   asked   me   to   write   the   Foreword   for   this   book   I   was   flattered.     I   thought   to   myself,   who   better   than   Paul   to   write   a   book   on   the   subject?     After   all,   he   spends   every   hour   of   his   working   day   adding   value   to   homeowners  equity.       What   may   be   obvious   to   Paul   is   not   necessarily   so   apparent   to   someone   selling   their   home.     It’s   the   attention   to   detail   that   might   add   the   extra   few   thousands   of   dollars   on   sale   day.     Within   the   covers   of   this   book   is   a   wealth   of   knowledge   but   is   still   only   a   portion  of  what  Paul  will  use  when  he’s  on  the  job.   Not  all  agents  are  created  equal.    They  don’t  all  have  the   drive,  enthusiasm  and  skill  set  to  make  an  extra-­‐ordinary   property  sale  that  will  be  talked  about  for  some  time.   Having   read   this   book   from   cover   to   cover,   I   can   say   it’s   easy  to  read  but  at  the  same  time  comprehensive  and  full   of   facts,   hints,   tips   and   ideas   that   can   go   a   long   way   to   getting  the  best  real  estate  result  possible.       The   advice   that   Paul   is   able   to   share   with   his   readers   comes   naturally,   having   been   in   the   industry   since   2006,     1    


Sold! A  Practical  Guide  To  Selling  Your  Home  

and with   property   sale   values   now   in   excess   of   $30   million.   It  isn’t  easy  to  list  your  property  and  keep  it  in  marketable   condition  while  you're  living  in  it.    And  the  selling  pitfalls   are   many   and   varied   for   the   unsuspecting   vendor.     So   I   was   very   pleased   that   Paul   had   taken   the   initiative   and   time  to  elaborate  on  the  process  in  the  form  of  a  book.   Real   estate   is   a   large   and   sometimes   complex   industry   -­‐   no   one   book   is   going   to   answer   every   question.     But   I   like   the  fact  that  this  book  answers  the  key  questions  in  a  very   practical   way.     I   trust   you   will   enjoy   the   content   of   this   book  and  I  trust  also  you’ll  be  able  to  put  some,  if  not  all   the  points,  into  action  towards  a  higher  value  if  and  when   you  come  to  sell  your  home.   I   have   little   doubt   that   if   you’re   reading   this   book   you’ll   be   able   to   read   between   the   lines   and   realise   that   this   agent   is   not   only   smart   but   caring   and   thoughtful.     This   book  is  like  the  Edmonds  Cook  Book  is  to  Kiwi  cooking  –  a   must  read  –  enjoy.     Mike  Pero   Founder,  Mike  Pero  Mortgages  &  Real  Estate  

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Sold! A  Practical  Guide  To  Selling  Your  Home      

Chapter 2:  Why  I  Produced  This  Book    

I produced   this   book   because   I've   been   asked   many   questions  by  sellers  over  the  years.    I  would  estimate  that   over   90%   of   those   questions   were   the   same,   so   I   asked   myself   “Why   not   produce   a   book   that   answered   those   commonly-­‐asked  questions?”    So  while  I'm  always  willing   to   help   my   clients   whenever   they   have   questions,   I'm   excited  about  being  able  to  just  say  “Read  this”  and  then   hand  them  a  copy  of  my  book.   This   book   is   long   overdue   …   I've   been   thinking   about   writing   it   for   many   years.     So   my   goal   now   is   to   get   it   into   the   hands   of   the   people   who   need   it   –   anyone   who   is   selling   their   home   and   who   wants   to   avoid   the   many   errors   that   can   literally   cost   you   tens   of   thousands   of   dollars,  or  more.   I  dedicate  this  book  to  my  wife  Julie  who  has  helped  and   supported  me  during  my  years  in  real  estate.     Paul  Blackler   Real  Estate  Guru,  Christchurch   Phone:  0800  00  SOLD      


Sold! A  Practical  Guide  To  Selling  Your  Home    

 

Chapter 3:  Introduction  

 

If you   want   to   know   how   to   do   something   well,   you   should   look   at   how   people   are   doing   it   poorly,   and   then   do  the  opposite.    So  I  have  looked  back  at  the  numerous   times   I’ve   seen   properties   sit   on   the   market   for   months   (sometimes   years)   and/or   have   sold   for   less   than   they   should   have.     I   soon   discovered   that   the   sellers   were   guilty  of  doing  one  or  more  of  the  following:   1. They  over-­‐priced  their  home;     2. They  appointed  the  wrong  agent,  or  they  chose  a   good   agent   but   failed   to   follow   their   advice   (or   worse,  they  tried  to  sell  the  property  themselves);   3. They  chose  the  wrong  selling  method  e.g.  general   agency;  tender;  auction  etc;   4. They   either   had   no   decent   marketing   plan   or,   if   they  did,  they  failed  to  stick  to  it;   5. Their  homes  were  poorly  presented.   The  Five  Keys  to  Selling  Your  Home   So  based  on  this,  I  have  identified  the  five  keys  to  selling   your  home,  and  they  all  start  with  the  letter  “P”.      

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Sold! A  Practical  Guide  To  Selling  Your  Home  

If you   work   in   sales   you   may   already   be   familiar   with   these,   as   they   apply   to   selling   any   sort   of   product   or   service.       Here  are  the  five  keys  to  selling  your  home:   1. Price  –  your  property  must  be  priced  correctly;   2. People  –  you  must  choose  a  competent  agent  that   you  can  work  with;   3. Place  –  you  must  place  your  product  (your  home)   in   front   of   your   prospects   using   the   most   effective   method   e.g.   by   auction;   fixed   price;   or   sole   agency?   4. Promotion  –  you  must  invest  in  your  marketing;   5. Product   –   your   home   (the   product)   must   be   presented  in  the  best  possible  condition.   If  you  appropriately  address  each  of  these  five  key  points   then  there’s  a  good  chance  you’ll  meet,  or  even  exceed,   your  price  expectations.   I  will  show  you  how  to  do  all  these  things,  and  more.    This   book  cannot  cover  every  sort  of  property  or  every  type  of   home   owner.     So   I   have   kept   the   content   general   in   nature.    Your  particular  situation  may  require  something   different,  or  specialised  advice.      

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Sold! A  Practical  Guide  To  Selling  Your  Home  

I have  focused  on  the  key  issues  facing  sellers,  not  every   issue.     In   this   book   I   predominantly   use   the   words   “agent”,   “consultant”   or   “salesperson”   to   refer   to   what   most  people  think  of  as  a  real  estate  sales  professional.       So  let’s  get  started  …  

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Sold! A  Practical  Guide  To  Selling  Your  Home    

Chapter 4:  Get  Your  Pricing  Right    

How Much  Is  My  Home  Worth?   One   of   the   first,   and   most   common,   questions   a   home   owner  asks  of  a  real  estate  consultant  is  “How  much  is  my   home  worth?”    They  want  to  know  because  they  want  to   get  the  best  price  they  can.    They  don’t  want  to  sell  it  for   too  little  as  that  will  cost  them  money.    They  don’t  want   to  set  the  price  too  high  because  they  know  it  will  never   sell.   Calculate  an  Appraisal  Figure   If  you  list  your  property  with  a  real  estate  agent,  they  will   help  you  to  find  out  how  much  your  home  is  likely  to  sell   for  in  the  current  market,  based  on  recent  sales  of  similar   houses   in   your   area.     This   process   is   called   a   property   appraisal,   so   let’s   refer   to   the   assessment   as   the   “appraisal  figure”.       Set  a  Target  Price   Your   agent   will   then   ask   you   what   you   think   about   the   appraisal   figure.     They   really   want   to   know   how   much   you’d  like  to  sell  your  home  for  in  relation  to  the  appraisal   figure.    Let’s  call  this  your  “target  price”.       5    


Sold! A  Practical  Guide  To  Selling  Your  Home  

Some sellers  decide  to  market  their  property  with  a  view   to   achieving   the   appraisal   figure;   some   want   more   than   the   appraisal   figure;   and   some   are   so   desperate   to   sell   they  will  be  happy  to  accept  a  price  that  is  lower  than  the   appraisal  figure.       The  agent  needs  to  know  your  target  price  to  help  them   put   your   marketing   plan   together;   to   write   your   advertisements;   and   to   qualify   potential   buyers.     Plus,   it   helps  them  assess  how  serious  and  realistic  you  are  about   selling   your   home.     It’s   imperative   that   you   trust   your   agent  to  keep  this  figure  confidential  when  they  negotiate   with  buyers.   If   a   seller   wants   to   sell   their   home   for   50%   more   than   the   appraisal   figure,   the   agent   will   know   how   much   of   a   challenge   they   have   ahead   of   them.     Over-­‐pricing   your   home  is  one  of  the  biggest  mistakes  you  could  make.    We   discuss   this   several   times   in   this   book   because   it’s   the   biggest  barrier  to  achieving  a  good  outcome.   Referring  to  Price  in  Your  Advertising   You   then   need   to   decide   what   you   will   say   (if   anything)   about  your  price  expectations  in  your  advertising.    Some   people   specifically   mention   a   price   in   their   advertising,   which  is  called  a  “listing  price”  or  an  “asking  price”.  

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Sold! A  Practical  Guide  To  Selling  Your  Home  

Other sellers   prefer   to   just   mention   an   “enquiry   range”   in   their  advertisements  however  under  current  legislation  it   may  not  be  appropriate  as  some  laws  see  this  as  bait  or   misleading  advertising.   Some   sellers   remain   silent   on   price   altogether.     And   sellers   who   choose   to   sell   by   auction   or   tender   are   also   silent   on   price,   and   the   eventual   value   is   decided   by   the   bidders  and  tenderers  respectively.     So  here  are  the  three  steps  again,  whether  you  are  selling   privately  or  through  an  agent:   1. Find  out  how  much  is  your  home  likely  to  sell  for;   2. Decide  how  much  you’d  be  willing  to  accept;   3. Decide  whether  you  should  mention  price  in  your   marketing,   and   if   so,   how   you   should   do   that.     We   will   cover   the   first   two   steps   in   this   Chapter,   and   the  third  step  in  Chapter  11.   Let’s  look  at  each  of  those  three  steps  …  

Step 1:   Find   out   how   much   your   home   is   likely  to  sell  for   There  are  several  ways  to  find  out  how  much  your  home   is  likely  to  sell  for:     7    


Sold! A  Practical  Guide  To  Selling  Your  Home  

1.1 Complete  a  Property  Appraisal   This   process   involves   the   research   of   recent   sales   of   comparable  properties  in  your  area.    The  more  recent  the   sales   are,   and   the   closer   those   properties   compare   to   your  home,  the  better.    Note  that  this  research  needs  to   be   based   on   the   sale   price   achieved   –   not   the   asking   price.   You   can   do   this   research   yourself,   but   if   you   use   a   real   estate  agent  they  will  do  it  all  for  you  at  no  cost.       Some   properties   are   so   unique   that   it   is   difficult   to   find   sales   of   comparable   properties.     In   some   rural   areas,   there   are   very   few   sales   to   pick   from.     These   situations   will  affect  the  reliability  of  the  property  appraisal  figure.   Real   estate   consultants   have   immediate   online   access   to   property   information   that   the   layperson   will   struggle   to   find.    It  tells  us:   • • • • •

The address  of  the  property;   The  age  of  the  house;   How  much  the  property  sold  for;   When  settlement  took  place;   General   details   about   property   e.g.   number   of   bedrooms   and   bathrooms;   size   of   the   section;   zoning  etc   8  


Sold! A  Practical  Guide  To  Selling  Your  Home  

1.2 Make  Your  Own  Enquiries   If   you   are   selling   privately,   you   can   look   to   see   how   much   similar   properties   are   being   marketed   for   in   your   area.     But   this   will   only   tell   you   the   asking   price,   if   a   price   was   listed  at  all.    So  this  information  will  only  be  a  rough  guide   for  you.    You  really  need  to  know  the  price  for  which  the   properties  sold.   You   can   visit   www.qv.co.nz   which   gives   you   access   to   some   basic   property   and   sales   information   without   any   cost.     Or   you   can   purchase   one   or   more   of   their   information   packs   which   range   in   cost   from   $9.95   to   $150.00.     These   packs   give   you   a   range   of   property   details,   depending   on   which   pack   you   buy.     The   information   includes   the   sales   history   of   the   property   concerned,  as  far  back  as  1981.    It  can  also  include  details   of  up  to  10  comparable  sales  achieved  in  the  area.       A   word   of   caution:   Even   if   you   are   using   a   real   estate   agent,   you   might   feel   their   appraisal   figure   was   too   low.     So   you   could   still   do   your   own   research   to   verify   the   agent’s  appraisal  figure  if  you  wanted,  at  very  little  cost  or   effort.     The   problem   with   relying   solely   on   the   agent’s   appraisal   is   that   you   are   relying   on   their   integrity.     Unfortunately,  some  agents  are  prone  to  exaggerate  the   appraisal  figure  in  order  to  give  them  the  best  chance  of   securing  the  listing.   9    


Sold! A  Practical  Guide  To  Selling  Your  Home  

That’s one   of   the   reasons   why   I   recommend   that   you   don’t  choose  your  agent  solely  on  the  appraisal  figure.   1.3  Rating  Valuations   A   Rating   Valuation   (or   RV)   used   to   be   referred   to   as   a   Government  Valuation  (GV)  or  Capital  Value  (CV).    These   valuations   are   only   done   every   three   years   for   the   purpose  of  assessing  your  rates  by  your  local  council.    It  is   set  using  a  mass  appraisal  process.    It  does  not  involve  a   valuer   visiting   or   inspecting   the   property.     It   should   only   be   used   as   part   of   your   research   i.e.   do   not   base   your   selling  price  solely  on  the  Rating  Value.   1.4  Registered  Valuations   Another   option   is   to   engage   the   services   of   a   registered   valuer.     Although   a   valuer   uses   comparable   sales   figures   as   well,   they   are   completely   independent   and   have   no   vested  interest  in  whether  you  like  the  valuation  figure  or   not.     It   will   cost   you   money   to   do   this,   but   it   gives   you   another   level   of   confidence   when   setting   your   target   price.    Plus,  you  have  the  option  of  offering  the  report  to   any   prospective   buyers   if   that   will   help   to   drive   up   their   offers.  

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Sold! A  Practical  Guide  To  Selling  Your  Home  

An online  search  will  quickly  provide  you  with  numerous   registered  valuers  to  choose  from.    Again,  you  can  order  a   registered  valuation  from  www.qv.co.nz.    

Step 2:  Decide  how  much  you’d  be  willing   to  accept   Now  that  you  have  an  idea  of  what  your  home  would  be   likely  to  sell  for  in  the  current  market,  you  need  to  decide   your   target   price.     This   is   the   price   you’d   be   likely   to   accept   from   a   buyer.     This   is   not   your   ideal   “top   dollar”   price.     Neither   is   it   your   “rock-­‐bottom”   price.     It   is   probably  something  between  these  two  extreme  prices.   Setting   your   target   price   will   be   the   single   most   critical   factor   to   decide   how   quickly   you   will   sell   your   home.     If   you  don’t  get  it  right,  which  usually  means  setting  it  too   high,  then:   • • •

You will   have   unrealistic   expectations   of   your   buyers;   Your  property  will  take  much  longer  to  sell;   You   will   choose   the   agent   that   gives   an   appraisal   figure   closest   to   your   expected   price,   even   though   they  may  not  necessarily  be  the  best  agent;   You   will   lose   trust   in   your   agent   when   they   start   bringing  you  lower  (or  no)  offers.   11  


Sold! A  Practical  Guide  To  Selling  Your  Home  

Because setting  your  price  expectations  is  so  important,  I   want  to  discuss  this  in  some  depth.   Setting  a  target  price  that  is  too  low   Under-­‐pricing   can   lead   to   a   very   speedy   sale   but   it   may   leave  you  forever  wondering  if  you  let  it  go  for  too  little.     It’s   true   that   under-­‐pricing   can   lead   to   bidding   wars   (which   is   a   good   thing)   in   the   right   real   estate   environment,  but  we  will  cover  that  side  of  it  later.       Under-­‐pricing   is   a   not   common   practice,   but   there   are   desperate   sellers   who   need   to   move   on   quickly   e.g.   people   who   have   been   transferred   in   their   jobs;   people   who   have   found   another   home   that   they   don’t   want   to   lose;  beneficiaries  under  an  estate  who  want  their  money   quickly;  and  couples  who  are  separating.   Setting  a  target  price  that  is  too  high   While   any   home   owner   wants   to   get   the   highest   price,   there   are   problems   associated   with   over-­‐pricing.     If   you   set   your   price   too   high   in   the   hope   of   receiving   that   “miracle  offer”,  your  home  will  almost  certainly  sit  on  the   market  for  a  long,  long  time.           12    


Sold! A  Practical  Guide  To  Selling  Your  Home  

This can  cause  the  following  problems  for  you:   1. You  and  your  agent  will  become  frustrated  with  all   the  work  being  put  in,  for  no  returns;   2. You   will   have   to   keep   your   house   and   gardens   in   pristine  “show  condition”;   3. You  will  have  to  keep  running  Open  Homes;   4. You  will  have  to  keep  allowing  prospective  buyers   through  your  home;   5. You  will  have  to  keep  paying  for  advertising  costs,   mortgage  payments,  rates  and  insurance;   6. Potential   buyers   will   think   that   there   must   be   something   wrong   with   the   property   when   they   find  out  how  long  it  has  been  on  the  market  (it’s  a   common  question  for  buyers  to  ask);   7. Any  offers  you  receive  will  probably  be  very  low  as   potential  buyers  will  assume  you  are  desperate  to   sell;   8. If   you’ve   made   a   conditional   offer   on   your   next   home,   you’ll   put   that   deal   at   risk   as   you   repeatedly   ask   for   extensions   of   time   as   your   home  sits  on  the  market.   I   can   give   you   countless   examples   of   home   owners   who   have   suffered   a   great   deal   because   of   over-­‐pricing   their   home   and   who,   with   the   benefit   of   hindsight,   would   have   set  a  more  reasonable  price  at  the  beginning.   13    


Sold! A  Practical  Guide  To  Selling  Your  Home  

Setting a  target  price  that  is  “just  right”   Unquestionably,   the   sellers   who   get   the   best   results   are   those   who   set   a   reasonable   target   price   for   their   homes   based  on  what  the  market  considers  to  be  a  “fair  price”.     So  how  do  you  decide  what  your  target  price  should  be?   Irrelevant  Factors  to  Ignore   Although   this   might   surprise   you,   the   following   factors   (although   relevant   to   what   you   might   want   for   your   property)   are   irrelevant   in   calculating   what   potential   buyers  will  view  as  a  fair  price  in  today’s  market:   1. The   price   you   paid   for   the   property   –   apart   from   anything   else,   you  might   have  bought   your  home   a  long  time  ago  in  a  very  different  market;  or  you   may  have  paid  too  much  for  it;   2. How  much  time,  effort  and  money  you  have  spent   on  the  property  since  you’ve  owned  it  –  you  may   have   invested   in   the   wrong   areas;   paid   too   much   for  your  renovations;  or  made  less-­‐than-­‐desirable   changes   to   the   property   that   could   possibly   reduce  the  offers  you  receive;   3. How  you  feel  emotionally  about  your  home  –  you   might   have   loads   of   wonderful   family   memories   and  sentimental  attachments  to  your  home,  but  a   buyer  does  not;   14    


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4. How much  profit  you  need  to  make  on  the  sale  to   pay   off   your   mortgage   (or   other   debts)   or   how   much   you   need   to   buy   your   next   home   –   these   issues   are   not   relevant   to   how   the   market   will   view  your  property.     How  quickly  do  you  want  or  need  your  home  to  sell?   Consider  how  long  it  takes  for  homes  to  sell  in  your  area.     If   they   are   selling   quickly,   you   are   probably   in   a   “Seller’s   Market”   and   you   are   more   likely   to   achieve   or   possibly   exceed   a   fair   market   price.     So   even   if   you   have   to   sell   quickly,  you  can  still  set  your  price  at  its  fair  market  value.   But   if   homes   are   selling   slowly   in   your   area   (a   “Buyer’s   Market”)  this  indicates  that  supply  is  exceeding  demand.     In   these   circumstances,   you   might   want   to   consider   setting   a   target   price   that   is   slightly   lower   than   your   appraisal   figure.     Why?     Because   selling   quickly   is   more   important   to   you   than   a   few   thousand   extra   dollars   and   a   lengthy  selling  process.       People  often  fail  to  factor  in  the  stress  and  emotional  cost   associated   with   a   drawn-­‐out   sale.     In   this   case,   lowering   the   price   by   10%   or   more,   depending   on   the   urgency,   is   advisable.     15    


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What condition  is  your  house  in?   If  your  property  is  in  immaculate  condition,  it  is  probably   in   better   condition   that   most   of   the   comparable   properties  included  in  your  property  appraisal.    So  in  this   situation  you  might  be  justified  setting  a  target  price  that   is  slightly  higher  (no  more  than  10%)  than  your  appraisal   figure.   Or   perhaps   your   property   is   very   tired   or   even   dilapidated.     Do   you   have   repairs   that   need   to   be   made   that  you  plan  to  fully  disclose  to  the  buyer  as  part  of  the   agreement.     Are   the   floors,   walls   or   ceiling   in   less   than   pristine  condition?    Are  the  appliances,  counters,  cabinets   and   fixtures   out-­‐dated?     Is   your   property   less   desirable   than   others   in   your   area   because   of   its   proximity   to   a   busy  road,  train  or  business?    Is  your  yard  oddly  laid  out   or  hilly,  making  upkeep  a  bit  more  of  a  challenge?    Do  you   have   undesirable   neighbours   who   fail   to   maintain   the   exterior  of  their  homes  and  gardens?       If  you  see  any  of  these  factors  applying  to  your  home,  in  a   way   that   positions   it   significantly   below   what   other   homes   might   be,   then   you   should   consider   setting   a   price   that  is  slightly  lower  than  your  appraisal  figure  (no  more   than  5%).  

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By following  these  tips  you  can  get  the  price  right  for  your   home  from  the  start,  sell  it  quickly  before  incurring  added   costs   and   spending   additional   time   that   could   be   better   spent   elsewhere.     Getting   the   price   right   from   the   start   will  assure  you  get  the  most  for  your  home.   Now   that   you’ve   set   your   target   price,   and   you’ve   discussed   this   with   your   real   estate   agent,   you   can   prepare  your  Marketing  Plan.    

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Chapter 5:  Appoint  The  Right  Agent  

If you  are  appointing  a  real  estate  agent  to  help  sell  your   home,  you  must  choose  carefully.    Selling  your  home  is  an   important  time  for  you,  and  you  need  to  be  able  to  work   well  with  your  agent.   Is   there   such   thing   as   the   “perfect   real   estate   agent”?     I   don’t   know   about   that,   but   I   do   believe   there   are   four   qualities  that  have  to  exist:   1. 2. 3. 4.

You must  like  your  agent;     You  must  trust  your  agent;   Your  agent  must  be  competent  and  credible;   Your   agent   must   be   backed   by   a   trustworthy   and   credible  brand.  

I know  that  all  four  of  these  qualities  are  important,  but   which   one   would   be   the   most   important   to   you?     Could   you  imagine  trying  to  work  with  an  agent  that  you  didn’t   like   much;   you   didn’t   trust   what   they   said;   and   you   didn’t   think   they   knew   what   they   were   doing?     Hmm,   I   didn’t   think  so.   Let’s  now  break  down  each  quality:     18    


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1. You  must  like  your  agent   It   might   take   many   weeks   or   even   months   to   sell   your   home.     It   will   be   a   frustrating   time   if   you   don’t   like   the   agent   you're   working   with.     The   good   news   is   that   most   real   estate   agents   have   strong   people   skills.     Their   job   demands   it.     They   would   have   quit   a   long   time   ago   if   they   didn’t   get   on   with   people.     So   what   sort   of   person   do   you   get   on   with   the   best?     Most   of   us   like   people   who   are   positive;   who   smile;   who   take   a   genuine   interest   in   us;   and  who  treat  us  with  respect  and  kindness.   We   also   tend   to   get   on   with   people   who   have   a   similar   personality  to  us;  and  we  struggle  with  people  who  have   opposing   personalities   to   us.     I   have   a   very   simple   Personality   Profile   Test   below   that   you   can   use.     It   will   help   you   identify   your   personality   type,   so   that   you   can   find   a   good   fit   when   you   choose   your   real   estate   agent.     Please  note  that  this  profile  test  should  be  viewed  with  an   open   mind   and   a   good   dose   of   humour.     We   shouldn’t   stereo-­‐type   people,   but   I   find   this   test   gives   valuable   insights  into  how  we  (and  others)  think,  and  why.       There  are  four  main  personality  types:   1. Driver   –   these   people   are   very   logical;   they   see   things  in  only  two  colours  (black  and  white);  they   are   very   direct   and   to-­‐the-­‐point;   they   don’t   like   19    


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getting bogged  down  in  all  the  detail  and  fluff;  and   they   are   very   task-­‐orientated;   they   don’t   mind   ruffling   a   few   feathers   with   people   if   it   gets   the   job   done   quickly   (company   directors;   project   managers;  lawyers;  doctors;  engineers);   2. Expressive   –   these   people   love   having   fun;   they   don’t   take   things   too   seriously;   they   value   relationships;   they   can   sometimes   lose   focus   (having   a   good   time   but   not   getting   the   job   done);   they  are  not  always  organised;  they  like  being  the   centre   of   attention;   they   love   praise   and   recognition  (on-­‐stage  performers;  event  planners;   media  people;  advertising;  sales  people);   3. Amiable   –   these   people   sit   half-­‐way   between   the   Driver  and  Expressive;  they  are  the  peacekeepers   who  avoid  conflict;  they  don’t  like  taking  too  many   risks  or  making  decisions  that  could  upset  others;   they  don’t  need  lots  of  praise  but  they  appreciate   the   occasional   pat   on   the   back;   they   don’t   like   the   limelight   and   prefer   to   be   left   in   the   background   to  get  on  with  their  work  (counsellors;  secretaries;   pastor;  teachers;  nurses);   4. Analyst   –   these   people   are   detail-­‐focused;   they   love   having   all   the   information   and   statistics   at   their  finger-­‐tips;  they  tend  to  be  perfectionists  and   can   be   inflexible   and   unwilling   to   change   20    


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(accountants;   business   analysts;   surgeons;   auditors;  pharmacists;  engineers;  architects).   Have  you  ever  met  someone  and  you  just  didn’t  click  with   them?       If   so,   it’s   quite   possible   that   they   had   a   very   different  personality  type  to  you.    The  lesson  is  to  either   seek   out   agents   who   have   a   similar   personality   type   to   you;  or  that  you  make  allowances  for  their  ways  of  doing   things.    Just  because  they  are  different  doesn’t  mean  they   are  wrong.   Don’t   select   an   agent   purely   based   on   the   number   advertisements   they   offer   or   years   in   the   industry.     Sometimes   profile   and   time   does   not   always   deliver   the   service   you   may   be   want.     There   are   many   talented   and   successful   agents   who   may   fit   your   profile   but   who   are   less   experienced.     These   agents   can   bring   a   fresh   perspective,  enthusiasm  and  personalised  service.     2.  You  must  trust  your  agent   Any   relationship   will   struggle   if   there   is   a   lack   of   trust.     You   need   to   have   confidence   in   what   your   real   estate   agent  is  doing  and  the  advice  that  they  are  giving  you.    It   usually  takes  time  to  build  trust.       We  tend  to  trust  people  who  share  the  same  core  values   as   us.     What   would   you   describe   as   your   top   five   core   21    


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values?   Many   people   say   things   like   respect;   integrity;   honesty;   family;   sincerity;   positivity;   hard   work;   generosity;  compassion.    Once  you’ve  identified  your  core   values,  seek  out  an  agent  that  exhibits  the  same  values.       For  example:   •

• •

Respect –   they   listen;   they   are   sensitive   to   your   needs;  they  talk  to  both  of  you;  they  say  “please”   and  “thank  you”;  they  are  always  on  time;   Integrity   –   they   have   high   morals;   they   do   what   they  say  they’ll  do;  they  do  the  right  thing;   Honesty   –   they   tell   you   want   you   need   to   hear,   not   just   what   you   want   to   hear;   they   admit   to   their   mistakes;   they   are   open   about   their   shortcomings;   Family   –   they   are   kind   to   your   kids;   they   respect   your   family   time;   they   speak   well   of   their   own   family.  

These are   all   clues   to   help   you   decide   what   their   core   values   might   be.     Some   real   estate   agents   list   their   values   in   their   website   profile   (although   writing   it   and   living   it   out   aren’t   necessarily   the   same   thing).     I   find   it   is   our   actions,   rather   than   our   written   words,   that   give   the   biggest  insight  into  our  character.     22    


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3. Your  agent  must  be  competent  and  credible   I   think   this   is   the   most   critical   factor   in   deciding   who   to   list   your   property   with.     You   can   find   an   agent   that   you   get   on   very   well   with,   and   you   can   trust   them   implicitly.     But   if   they   don’t   know   how   to   promote   and   sell   properties   and   negotiate   hard   when   needed,   you’re   not   going  to  sell  your  home  for  the  best  price  in  the  quickest   time.   This   part   of   your   screening   process   will   not   involve   making  enquiries  about  the  personality  or  their  character   (we  have  already  covered  those  two  areas).    This  part  of   the   process   is   where   you   make   enquiries   in   six   specific   areas:   1. 2. 3. 4. 5. 6.

What does  the  REAA  have  to  say  about  them?   How  experienced  they  are?   What  sort  of  sales  results  they  have  achieved?   What  their  customers  say  about  them?   What  sort  of  access  do  they  have  to  buyers?   What  awards  they  have  received?  

Let’s look  at  these  areas  individually:   1.    REAA   All   real   estate   agents   in   New   Zealand   must   be   licensed   with   the   Real   Estate   Agents   Authority.     The   REAA   is   an   23    


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independent government   regulatory   body   for   the   real   estate   industry   in   New   Zealand.     Its   job   is   to   promote   a   high   standard   of   service   and   professionalism   in   the   real   estate  industry  and  help  protect  buyers  and  sellers.    The   REAA  provides  you  with  significant  level  of  protection  as  a   buyer   or   seller.     This   protection   does   not   exist   if   you   have   a  friend  sell  your  home  or  through  any  DIY  process.    You   can   search   for   any   agent’s   name   at   www.reaa.govt.nz.     Some  sellers  have  lost  thousands  of  dollars  off  their  sale   price  because  of  mistakes  made  when  selling  their  prized   possession.       When   you   use   an   agent   to   sell   your   home,   you   have   effectively   taken   out   an   insurance   policy   at   no   cost   to   yourself.     This   policy   has   no   upper   dollar   limit   so   in   the   event   that   your   agent   does   mess   up   a   sale,   you   have   a   judicial  process  to  help  you  get  a  fair  deal.    Most  agents  in   New   Zealand   carry   Professional   Indemnity   Insurance   of   several   million   dollars.     Again   this   means   that   if   agents   make  a  mistake  then  you  have  someone  to  sue,  with  the   means  to  pay  you  out  if  you  win  your  case  against  them.   2.    Experience   While   every   real   estate   agent   has   to   start   somewhere,   do   you   really   want   a   brand   new   agent   to   cut   their   teeth   selling   your   home?     You   want   to   look   for   an   agent   who   has   solid   experience   in   selling   properties   like   yours,   24    


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especially in   your   area.     In   saying   that,   you   can   still   get   excellent   results   if   the   agent   you   wish   to   appoint   is   working   alongside   or   being   supervised   by   a   more   experienced   agent   to   oversee   the   process.     Sometimes   the  enthusiasm  of  a  new  agent  coupled  with  the  wisdom   of  an  established  agent  can  achieve  an  even  better  result.       If  you  visit  www.reaa.govt.nz  you  can:   • • •

Find out  an  agent’s  contact  details;   See  how  long  they  have  been  licensed;   Find   out   if   they've   had   any   complaints   upheld   against  them  in  the  last  three  years.  

3.  Sales  Results   You  need  to  ask  them  how  many  homes  they  have  sold,   particularly   property   types   like   yours.     What   price   range   were  these  properties?    How  long  did  it  take  them  to  sell,   on   average?     How   close   to   the   seller’s   target   price   were   they?   The  agent  may  not  know  all  these  statistics  but  hear  them   out.    If  you  think  you  might  sell  your  home  by  auction,  ask   the   agent   how   many   properties   they’ve   sold   that   way,   and  how  many  sold  at  auction,  or  shortly  thereafter.    

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4.  Customer  Feedback   Ask   the   agent   to   provide   you   with   a   range   of   testimonials   that  are  no  more  than  12  months  old.    Ask  if  you  can  call   any   of   them?     Do   you   know   any   of   those   people   personally?     Are   they   saying   general   things   or   are   they   specific?     Do   they   shed   any   light   into   the   agent’s   core   values?   5.    Access  to  Buyers   This  is  probably  one  of  the  most  critical  things  to  look  for   in  an  agent.    Your  property  will  sell  faster  and  for  a  higher   price   if   it   can   be   put   in   front   of   the   right   kind   of   buyer.     The  more  of  these  buyers  there  are,  the  better  off  you'll   be.   However,   you   cannot   be   guaranteed   they   already   have   the   “best”   buyer   for   your   property.     Only   after   an   appropriate   marketing   campaign,   managed   by   a   competent   agent,   can   you   be   sure   you   have   found   the   buyer   who   will   pay   the   most.     And   that’s   who   you   want   isn’t  it!   So   ask   about   their   networks;   their   Buyers   Pool;   the   way   they   generate   interest   in   their   listings;   and   how   many   other   agents   in   their   company   they   can   share   your   property  with?  Ask  if  they  have  any  buyers  right  now  who   26    


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could be   interested   in   your   property   (I   appreciate   you'll   only   be   taking   their   word   on   this   as   it’s   impossible   to   prove).   You  should  be  wary  though  when  an  agent  says  they  have   a   thousand   agents   (in   their   company)   ready   to   sell   your   home,  because  that  is  not  the  way  it  works.    It’s  a  great   line  but  seldom  has  any  truth  or  value.    Most  agents  are   only   interested   in   selling   their   own   listings.   If   this   was   the   case   then   you’d   not   have   to   spend   any   money   on   advertising.   6.    Awards   Ask   about   what   sort   of   awards   they   have   received   and   when.     Doctors   know   who   the   good   doctors   are;   teachers   know  who  the  good  teachers  are;  and  real  estate  agents   know  who  the  agents  are.   So   you   want   to   deal   with   the   agents   who   have   received   awards   –   especially   the   awards   voted   for   amongst   their   peers.     It’s   their   colleagues   who   see   that   agent   every   day;   see  how  hard  they  work;  how  they  deal  with  their  clients;   how   much   integrity   they   have;   what   their   clients   say   about   them;   and   what   sales   they’ve   been   able   to   put   through.     27    


Sold! A  Practical  Guide  To  Selling  Your  Home  

Be Warned  -­‐  Things  to  Look  Out  For   It’s  just  as  important  to  know  what  not  to  have  in  a  real   estate  agent.    So  be  wary  of  agents  who:   • •

Over-­‐flatter you   all   the   time,   or   otherwise   seem   insincere;   Seem   to   tell   you   things   you   want   to   hear   –   especially  about  how  much  they  think  your  home   will  sell  for;   Are   quick   to   drop   their   commission   rate.     If   they   can’t   negotiate   their   commission   rate   with   you,   what   are   they   going   to   be   like   when   they   are   negotiating  with  a  buyer  to  accept  your  price?   Have  a  disciplinary  record  with  the  REAA.  

How to  Find  a  Real  Estate  Salesperson?   I   would   use   these   methods   to   find   a   good   agent,   and   in   this  order:   •

• •

Referrals from   experts   e.g.   your   lawyer;   accountant;   a   property   developer;   a   property   investor;   Referral   from   your   friends   and   family   (   ask   them   why  they  liked  the  agent;  be  specific);   Internet   search   –   you   will   find   agent   profiles   on   their  company’s  website;   28  


Sold! A  Practical  Guide  To  Selling  Your  Home  

• •

Property Guide  search;   Drive-­‐bys  –  look  to  see  who  has  all  the  listings.  

A Great  Question  to  Ask   Here  is  a  great  question  that  should  be  asked,  but  seldom   is:   “Why   should   I   list   my   property   with   you   (or   what   makes  you  so  different  from  everyone  else)?   Many   agents   give   vague   responses   that   show   no   direct   benefit  to  the  home  owner,  like  this:   • • • • • • •

I am  a  very  good  agent  (too  vague);   I  am  an  experienced  agent  (too  vague);   I  have  been  selling  houses  for  30  years  (no  direct   benefit);   I  provide  great  customer  service  (too  vague);   I  can  give  you  a  free  appraisal  (not  unique);   I  am  passionate  about  selling  houses  (not  unique;   no  direct  benefit);   I  listen  to  my  clients  (too  vague;  not  unique).  

Instead, they   should   be   able   to   provide   you   with   some   specific   points   of   difference   that   are   unique   and   which   provide   a   real   benefit   to   you.     For   example   they   might   provide   an   extra   service   at   no   cost   to   you   or   they   might   give  you  additional  marketing  products  for  free  (products   that  other  agents  charge  for).     29    


Sold! A  Practical  Guide  To  Selling  Your  Home    

Chapter 6:  Develop  a  Marketing  Plan    

Selling your  home  for  the  best  price  is  about  three  major   things:   Exposure.   Exposure.   Exposure.     No-­‐one   will   buy   your   home   unless   they   know   it’s   for   sale.     The   more   qualified   people   you   can   include   in   your   “buyer   pool”   the   faster   you   will   sell   your   property   and   the   higher   price   you   will  achieve.   I  know  some  people  are  private,  but  if  you  place  too  high   a   price   on   your   privacy,   you   will   probably   limit   the   interest   and   therefore   the   number   and   quality   of   offers   for  your  property.   So  why  bother  making  a  plan?    Well,  there  is  a  saying  that   “If  you  fail  to  plan  then  you’re  planning  to  fail”.    If  you  fail   to  create  a  well  thought-­‐out  marketing  plan  at  the  start,   you   might   end   up   digging   a   money   pit   that   sucks   your   wallet  dry  over  the  coming  weeks  and  months.    When  you   know  how  much  you’ll  be  putting  towards  marketing,  you   can  allow  for  that  in  your  budget.   A  marketing  plan  doesn’t  have  to  be  complicated.    A  basic   plan   should   have   four   steps,   which   answer   these   four   questions:  

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Sold! A  Practical  Guide  To  Selling  Your  Home  

1. 2. 3. 4.

How much  should  we  spend  (budget)?   Who  am  I  trying  to  reach  (target  market)?   How  should  we  reach  them  (strategies)?   What  should  we  tell  them  (marketing  messages)?  

Most people   focus   on   step   3   (strategies)   without   paying   much   attention   to   the   other   three   steps.     Do   not   make   the   same   mistake,   otherwise   your   efforts   will   either   struggle  or  fail  altogether.       If   you   appoint   a   good   real   estate   agent,   they   should   create   the   plan   for   you,   with   your   input   of   course.     But   here  are  some  tips  in  case  you  are  doing  it  yourself  or  if   you  want  to  understand  the  process  better:       Step  1  -­‐  Set  Your  Budget   How   much   should   you   plan   to   spend   on   marketing   your   home?     A   general   rule   of   thumb   in   real   estate   is   to   be   willing  to  invest  around  1%  of  the  value  of  your  home  in   advertising   and   marketing.     So   for   a   house   worth   $500,000   the   owner   should   be   prepared   to   invest   around   $5,000   in   marketing.     It   might   be   tempting   to   skimp   on   your  marketing,  but  it  can  end  up  costing  you  more  in  the   long-­‐run   because   a   poorly-­‐marketed   property   takes   longer   to   sell.     We   have   already   discussed   some   of   the   31    


Sold! A  Practical  Guide  To  Selling  Your  Home  

problems of   having   your   property   on   the   market   for   a   long   time.     Most   of   these   problems   have   costs   associated   with  them:   • • • • • •

Property outgoings  such  as  rates  and  insurance;   Ongoing  maintenance  and  up-­‐keep;   Legal  fees;   More  marketing  fees;   Mortgage  interest;   Opportunity   costs,   including   the   risk   of   losing   the   next  home  you  wish  to  buy.  

If you   think   you   can’t   afford   to   pay   for   advertising,   then   try  to  look  at  it  from  this  perspective:  you  can’t  afford  not   to   advertise   your   property!     The   cost   of   your   campaign   will  depend  on  the  range  of  selling  strategies  you  intend   to   employ.     We   will   cover   these   strategies   later.     But   some  common  costs  include:   • • • •

Good-­‐quality photographs   that   highlight   the   best   features  of  your  home;   Street   signage   (a   good   quality   sign   with   images   –   not  just  a  “For  Sale  sign);   Newspaper  advertising;   Online   marketing   sites   e.g.   www.trademe.co.nz   and  www.realestate.co.nz;  

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Step 2  -­‐  Identify  Your  Target  Market   Believe   it   or   not,   your   property   will   not   appeal   to   everyone   on   the   planet.     I've   yet   to   see   a   property   that   does.     Certain   properties   appeal   more   to   some   than   others.    So  there  will  be  a  class  or  category  of  buyers  who   will   pay   more   for   your   property.     In   other   words,   there   will  be  aspects  of  your  home  that  make  it  more  appealing   to   some   people   than   others.     Some   properties   are   more   suited   to   families   rather   than   couples   (and   vice   versa);   occupiers  rather  than  investors;  retirees  rather  than  first-­‐ home   buyers.     Some   homes   suit   a   particular   ethnicity   or   working  group  because  of  their  location.    Fixer-­‐uppers  do   not  appeal  to  everyone.    Some  people  want  a  home  in  a   quiet  location  while  others  want  it  to  be  in  the  busy  part   of  town.       The   reason   this   is   so   important   is   that   once   you   know   who  you're  targeting,  you  can  promote  the  property  in  a   way   that   appeals   to   their   demographics   (physical   make-­‐ up   e.g.   race;   age;   gender   etc)   and   their   psychographics   (how  they  think  and  feel  e.g.  image/status;  safety;  social).     This   will   make   it   easier   to   decide   how   you   should   be   promoting   your   property   (your   strategies)   and   what   you   should  be  telling  them  (your  marketing  messages).         33    


Sold! A  Practical  Guide  To  Selling  Your  Home  

This is   not   to   suggest   that   if   someone   comes   along   who   does   not   meet   your   definition   of   a   potential   buyer   that   you   ignore   them.     But   it   allows   you   to   focus   your   marketing  strategies  and  messages  for  maximum  impact.     If   you   cast   your   net   too   wide   by   trying   to   appeal   to   everyone,   you   will   fail   to   press   their   emotional   buttons   and   you   may   by-­‐pass   the   very   prospects   that   are   most   likely  to  buy  your  house.     So,   who   is   most   likely   to   buy   your   property?     Does   it   appeal   primarily   to   a   single   person,   a   young   couple   or   a   big  family?    Would  this  buyer  tend  to  have  a  certain  kind   of   job   or   make   a   certain   amount   of   money?     Would   this   person   value   certain   things   that   your   property   has   to   offer?    Could  they  be  a  nurse  and  you  live  really  close  to   the  local  hospital?    Would  they  be  likely  to  own  a  car  or   take  public  transport  (if  the  latter,  you  can  emphasise  the   nearby  bus  stop  and  train  stations)?    Do  they  own  a  dog   or  want  a  garden?     If   you’re   not   sure,   consider   who   your   neighbours   are.     Take   a   walk   around   your   neighbourhood   and   observe   the   people;   who   are   they   and   what   do   they   enjoy   doing?     Whatever  you  think  your  typical  buyer  would  appreciate,   you  will  look  for  ways  to  tell  that  target  demographic  that   this   is   the   perfect   home   for   him   or   her   in   a   way   that   does  

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Sold! A  Practical  Guide  To  Selling  Your  Home  

not necessarily  exclude  other  buyers.    We  will  cover  this   in  the  section  that  discusses  your  marketing  messages.   Once   you’ve   identified   who   would   be   most   attracted   to   your   home,   you   need   to   plan   how   you’re   going   to   find   them  …   Step   3   -­‐   Choose   and   Implement   Your   Marketing   Strategies   What   is   the   best   way   to   reach   your   target   market?     Are   they  more  likely  to  read  newspapers  or  watch  television?     Are  they  internet-­‐capable  and  technology-­‐savvy?    Where   do  they  hang  out?    What  sorts  of  groups  or  networks  do   they  congregate  in?       If  you  want  to  target  retirees  you  might  want  to  consider   newspaper   advertising,   and   advertise   in   the   local   bowling   club   publications.     If   you   want   to   target   young   families,   you  might  try  a  mailbox  drop  around  local  kindergartens   and  schools.   Let’s  look  at  some  of  the  options  for  marketing:     Your   real   estate   agent   may   suggest   options   such   magazine   advertising;   television;   radio;   letterbox   flyers;   video   promotion;   a   window   card   in   their   real   estate   premises.    They  will  almost  certainly  recommend  running   Open  Homes.   35    


Sold! A  Practical  Guide  To  Selling  Your  Home  

Here are   some   alternative   strategies   to   consider   which   could  be  used  in  addition  to  the  strategies  carried  out  by   your  agent  (because  you  are  working  with  your  agent,  as   a   team,   I   suggest   you   speak   with   your   agent   before   implementing  these  ideas):   1. Tap  into  your  personal  networks   You  can  do  some  marketing  of  your  own  through   word-­‐of-­‐mouth   and   tapping   into   your   own   networks.     Please   be   aware   that   even   if   you   find   a   buyer   yourself,   you   might   still   be   liable   for   your   agent’s   full   commission,   depending   on   the   provisions   of   your   listing   agreement.     If   you   have   signed   an   exclusive   listing   agreement   with   your   agent,   let   them   take   the   calls   because   they   have   the  expertise  to  handle  these  enquiries  properly.     2. Use  Social  Media  to  reach  a  wider  network   The   internet   and   social   media   have   given   us   a   great   opportunity   to   communicate   with   a   lot   of   people,  quickly  and  cheaply.    Make  sure  all  of  your   friends   know   you   are   selling   your   property   and   make  it  easy  for  them  to  share  it.           36    


Sold! A  Practical  Guide  To  Selling  Your  Home  

Here are  some  ideas:   a) Start  a  blog   This  takes  less  time  than  you  think  if  you  enjoy   writing.     You   can   share   your   adventures   in   selling   your   home,   and   provide   helpful   tips   that   you   have   learned   along   the   way.     Don’t   mention   your   home   too   often,   but   make   it   clear   that   you   have   a   home   for   sale   and   that   people   can   follow   you   on   your   journey,   learn   from   you,   and   feel   like   they   are   part   of   your   experience.   b) Advertise  on  Social  Media   This   might   cost   you   a   little,   but   Facebook   advertising   is   incredible   for   qualifying   and   screening   the   people   you   wish   to   target   (including   where   they   live).     Few   other   forms   of   marketing   can   filter   prospects   with   as   much   precision  as  Facebook  advertising.   Now  that  you’ve  selected  your  marketing  strategies,  you   can  decide  what  you’re  going  to  tell  them  …       37    


Sold! A  Practical  Guide  To  Selling  Your  Home  

Step 4  -­‐  Develop  Your  Marketing  Messages   Now   you   know   your   target   market   and   you’ve   decided   how  you  are  going  to  reach  them,  you  must  ask  yourself   “What   am   I   going   to   tell   them   about   my   property?”     An   inexperienced   sales   person   (and   even   many   experienced   ones)  just  tells  their  prospects  everything  –  every  fact  and   figure  they  think  might  be  important.   But   a   smart   sales   person   identifies   the   main,   key   marketing   messages   that   will   appeal   to   that   particular   target  market.    And  they  focus  on  the  facts  that  make  the   property  unique.   What  Makes  Your  Home  Great?   Why  should  someone  buy  your  home  instead  of  the  home   next   door?   There   has   to   be   a   reason,   and,   if   it   is   not   obvious,   you   must   create   one   (it   has   to   be   true,   of   course).     Do  you  have  mature  fruit  trees  in  the  back  yard?    Is  your   kitchen   newly   remodelled?     Do   you   have   a   nice   view?     Or   a  pond?    Or  a  Pool?    Is  the  section  sub-­‐dividable?    Are  you   in   a   sought-­‐after   school   zone?     Is   it   an   energy-­‐efficient   home?    Is  it  great  for  entertaining?    Or  maybe  it  needs  a   little   work,   with   capital   gain   potential   once   the   renovations  are  completed.       38    


Sold! A  Practical  Guide  To  Selling  Your  Home  

Think hard   about   your   major   selling   points   and   promote   them.    If  you  are  working  with  an  agent,  don’t  leave  them   guessing   about   what   is   so   great   about   your   home   –   especially   those   aspects   that   are   hard   or   impossible   to   identify   e.g.   that   the   gardens   have   been   have   professionally-­‐designed.     You   know   these   things   better   than   anyone.     Make   a   list   of   features   for   your   agent   to   share  with  potential  buyers.   Unless   there   are   no   other   homes   on   the   market,   buyers   have  choices.    So  they  need  to  know  why  your  property  is   the  right  choice  or  at  the  very  least  why  they  should  take   90   seconds   out   of   their   busy   day   to   read   through   your   listing   before   moving   on.     If   you   get   just   one   person   to   read   your   advertisement,   your   chances   of   selling   your   home  just  increased.   Find  a  creative  way  to  promote  the  selling  points  of  your   house.    If  you  are  not  a  great  wordsmith,  give  your  selling   points  to  a  friend  and  let  them  write  a  short  blurb  for  you.     Some   people   can   be   very   creative   and   intriguing   with   words   and   this   is   what   you   want   when   you   are   selling   your  home.   A  Picture  is  Worth…  a  Lot  of  Money   Always   use   well-­‐chosen   high-­‐quality   pictures   that   accentuate   what   makes   your   house   great,   because   39    


Sold! A  Practical  Guide  To  Selling  Your  Home  

pictures are   the   first   things   that   buyers   will   see.     Text   appeals   to   our   intellect   (logic)   but   images   trigger   our   emotions   –   and   we   buy   mainly   on   emotion.     Using   low-­‐ resolution  shots  from  your  cell-­‐phone  will  not  get  the  job   done.       If   you   are   working   with   an   agent,   they   will   take   the   photographs   themselves   or   engage   a   professional   photographer.    If  you  are  not  working  with  an  agent  and   you   don’t   have   a   great   camera,   borrow   or   buy   one   immediately.    It  will  make  a  huge  difference.       Pictures   get   prospective   buyers   excited;   they   close   the   gap  between  the  prospect  and  your  property;  they  begin   to  imagine  what  they  would  look  like  and  feel  like  living  in   your  home.    So  use  quality  photos  to  persuade  potential   buyers  that  they  want  to  know  more  and  that  they  need   to  contact  you  or  your  agent  today!  

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Sold! A  Practical  Guide  To  Selling  Your  Home    

Chapter  7:  Crunch  The  Numbers    

Your house  is  probably  your  most  expensive  asset,  so  the   financial   figures   involved   in   selling   a   property   can   be   huge.    It’s  critical  that  you  have  control  over  your  finances   and   know   where   all   your   money   is   going.     The   best   tool   for   this   is   a   budget.     It   should   only   take   you   an   hour   or   two  to  prepare  your  budget.   How   much   profit   will   you   generate   from   selling   your   home?     I   want   to   break   down   the   money   you’ll   be   receiving  (credits),  from  which  you  will  deduct  the  things   you  need  to  be  paying  out  for  (debits).    The  difference  will   be  your  profit.       I  will  focus  on  the  expenses  that  are  over-­‐and-­‐above  what   you’d   normally   be   responsible   for.     I   will   not   factor-­‐in   your   normal   property   expenses   such   as   your   mortgage   payments,   rates,   insurance   etc,   because   you   incur   these   every  week,  fortnight  or  year  so  just  keep  paying  those  as   normal.     So   I   will   assume   you   have   a   household   budget   and   that   you   are   able   to   pay   your   living   expenses   each   month.    

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Sold! A  Practical  Guide  To  Selling  Your  Home  

I recommend   that   you   create   a   simple   spreadsheet   to   store   this   information.     It’s   important   to   calculate   what   you   might   receive   after   selling   your   home,   as   it   will   determine   how   much   you   can   put   towards   your   next   home  if  applicable.    If  you  aren’t  going  to  make  as  much   as  you  thought,  you  might  even  change  your  mind  about   selling.    It’s  better  to  know  these  things  now  rather  than   later.    Here  are  the  items  to  include  in  your  spreadsheet:   Credits   •

Sale price   –   insert   your   target   price   here.     It   will   probably   be   paid   in   two   parts:   the   deposit   on   signing  and  the  balance  on  settlement  

Rates refund   –   because   you   pay   your   rates   in   advance,  the  buyer  will  refund  you  for  their  share   of   the   last   payment   on   settlement   on   a   pro   rata   basis  

Insurance refund   –   you   also   pay   your   insurance   premium   in   advance,   so   your   insurance   company   will   refund   you   for   the   unexpired   portion   of   your   premium,   calculated   on   a   daily   basis   from   your   settlement  date  

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Sold! A  Practical  Guide  To  Selling  Your  Home  

Debits •

Mortgage repayment  –  ask  your  banker  to  provide   you   with   an   up-­‐to-­‐date   repayment   statement.     You   will   still   be   making   periodic   payments   until   settlement,   so   the   principal   sum   due   on   settlement  will  be  lower  than  the  figure  shown  in   the  repayments  statement.    But  at  least  it  will  give   you  a  figure  to  include  in  your  spreadsheet  

Real estate   agents   commission   –   calculate   your   likely  commission  bill  by  using  the  formula  in  your   listing  agreement,  and  base  it  on  your  target  price    

Legal fees   and   disbursement   –   ask   your   lawyer   for   a  quote  for  completing  your  sale  

Marketing costs   –   you   will   find   this   in   your   Marketing  Plan  

Valuation fees   –   you   may   decide   to   do   some   research   about   your   property’s   market   value   (if   not,  ignore  this  item)  

Capital improvements  &  repairs  –  you  might  need   to   allow   for   the   cost   of   new   carpets;   re-­‐flooring;   repairing   the   roof;   finishing   off   the   deck;   replacing   the  old  toilet;  landscaping;  plantings  etc   43  


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Renovation costs   –   you   might   need   to   allow   for   the  cost  of  painting,  wallpapering,  re-­‐tiling  etc  

Cleaning –  you  might  decide  to  pay  a  professional   to   do   a   complete   house   clean;   a   carpet   clean;   an   upholstery   clean;   a   section   clearing   etc.     Even   if   you   do   it   yourself,   you   might   want   to   allow   for   cleaning   materials   and   the   cost   of   a   lunch   for   all   your  volunteers  

Storage costs   –   allow   for   the   cost   of   storage   bins   and   renting   a   storage   shed   if   applicable   (will   you   be   storing   your   household   effects   after   settlement?)    

Removal costs   –   will   you   be   hiring   a   moving   company   to   do   the   heavy   lifting   for   you?     They   should  be  happy  to  provide  a  quote.    Even  if  you   do   it   yourself,   you   may   need   to   allow   for   hiring   furniture  trailers  and  lunch  for  all  your  helpers  

Home staging   costs   –   is   your   home   looking   too   plain,  sparse  or  is  it  empty.    It  might  benefit  from   some   expert   advice   and   some   extra   well-­‐chosen   furniture  items,  ornaments  and  artwork  

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Contingencies –   there   are   always   surprise   expenses   that   pop   up   so   you   might   want   to   add   another  $3,000  into  the  budget  to  make  sure  if  it’s   there  if  you  need  it  (if  you  don’t,  great!)  

Your Other  Ongoing  Expenses   If   all   these   extra   selling   costs   are   placing   a   huge   burden   on   you   financially,   you   might   struggle   to   keep   up   with   your  usual  property  expenses  –  especially  your  mortgage   payments.    It  might  be  wise  to  speak  with  your  banker  to   organize   a   temporary   extension,   overdraft,   bridging   loan   or   mortgage   holiday.     If   you’re   anticipating   selling   your   home   a   few   months   out   then   you   could   speak   to   your   bank  about  switching  your  existing  mortgage  to  “interest-­‐ only”   in   the   interim,   allowing   you   to   put   a   few   extra   dollars   aside   (the   principal   component   you   would   have   paid  otherwise)  towards  your  marketing  budget.   You   don’t   want   a   lack   of   funds   to   stop   you   from   marketing   your   property   properly,   or   to   stop   you   from   carrying   out   important   repairs,   maintenance   or   renovations.    

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Chapter 8:  Run  Effective  Open  Homes    

An Open   Home   is   one   of   the   best   ways   to   show   your   home   to   the   most   potential   buyers   in   a   short   period   of   time.     Open   Homes   can   be   exhausting   and   are   certainly   time-­‐consuming,  so  to  make  sure  you  get  the  best  out  of   your  time,  make  sure  you  follow  these  principles  in  order   to   have   an   amazing   and   productive   Open   Home.     I   want   to  give  you  insights  into  running  an  effective  Open  Home   to   help   you   do   it   yourself,   or   to   support   the   real   estate   agent  who   may   be   running   it   for   you   (remember,   you  are   a  team):   Advertise  your  Open  Home   For   an   Open   Home   to   be   successful   it   needs   to   be   well-­‐ advertised.     This   means   more   than   putting   a   sign   on   the   front   lawn.     Potential   buyers   may   live   in   other   neighbourhoods   and   they   won’t   necessarily   see   the   sign   on   your   property.     So,   you   have   to   get   the   word   out   far   and   wide.     Allow   for   adequate   advertising   for   the   Open   Homes  in  your  marketing  plan.       You   should   schedule   the   Open   Home   dates   and   times   in   advance  and  refer  to  them  in  your  various  advertisements   (and   other   promotions),   especially   on   the   internet   sites   46    


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where you   are   promoting   the   property,   at   least   a   week   in   advance   so   that   people   can   plan   their   day.     Be   sure   to   erect   your   sign   at   least   a   week   beforehand,   and   make   sure   it   mentions   the   date,   start   time   and   finish   time.     If   you  are  using  a  real  estate  agent,  they  will  do  all  this  for   you.   Think  about  the  Buyer’s  Needs   Most   serious   buyers   will   be   attending   several   Open   Homes  in  a  day  so  be  clear  about  when  your  Open  Home   starts  and  finishes,  to  give  them  a  nice  broad  window  to   work  into  their  schedule.  To  sell  anything  effectively,  you   have  to  put  your  buyers’  needs  before  your  own.    So  run   them   on   days   and   times   that   are   convenient   for   most   people;  make  sure  they  have  easy  access  onto  and  off  the   property;   ensure   paths   are   safe   to   walk   on;   tie   up   your   dog  in  the  back  yard  (or  better  still,  take  it  with  you).   Your  best  day  and  time  options  would  be  on  a  Saturday  or   Sunday   –   in   the   late   morning   or   early   afternoon   if   possible.    Most  Open  Homes  in  New  Zealand  run  between   30   minutes   and   an   hour.     The   duration   of   your   Open   Home  should  not  be  too  short,  otherwise  people  may  not   be  able  to  fit  it  into  their  schedule,  especially  if  they  are   visiting  other  Open  Homes.    Don’t  make  it  too  long  either,   otherwise  it  can  encourage  people  to  be  tardy;  and  all  it   creates   is   a   big   burden   for   the   person   running   it.     If   you   47    


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are using   a   real   estate   agent   to   run   your   Open   Homes,   they  will  limit  them  to  either  30  minutes  or  an  hour.       It   can   create   a   point   of   difference   if   you   are   able   to   run   your   Open   Homes   during   the   week   and/or   at   early   evening   times   (especially   in   summer).     This   could   attract   people   who   would   otherwise   be   unable   to   attend   weekend  viewings.   Create  the  Right  Environment   I   will   discuss   the   importance   of   staging   your   house   in   chapter  10,  but  I  just  want  to  touch  on  this  briefly  here,  in   the  context  of  Open  Homes  in  particular.    You  can  really   help  your  real  estate  agent  if  you  have  the  property  well-­‐ prepared  for  the  Open  Home.   Most  sellers  work  hard  to  keep  their  homes  clean  and  tidy   throughout   the   whole   selling   process.     They   just   never   know  when  a  potential  buyer  may  see  a  sign  and  decide   to  pop  in.    With  these  random  or  last-­‐minute  pop-­‐ins,  you   can   be   excused   for   the   house   being   only   98%   tidy.     But   you  don’t  have  the  same  excuse  with  Open  Homes.    You   have   ample   notice   to   prepare   and   clean   the   house,   so   take  it.    You  should  do  an  extra-­‐thorough  cleaning  the  day   before   the   Open   Home.     If   you   have   moved   all   of   your   possessions   out,   this   should   be   a   very   straightforward   task.     If   you   have   not,   make   sure   your   house   is   clutter,   48    


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trash and   recycling-­‐free.     Check   to   see   that   all   closets   and   drawers   look   neat   and   even.     Make   sure   dust   and   cobwebs  are  whisked  away.   Remove   any   strong,   unpleasant   odours   from   the   property.    If  you  have  a  cat  or  dog,  make  arrangements  to   remove  them  well  before  the  Open  Home  if  you  can  –  to   make  sure  any  smells  have  disappeared.   Clean  and  refresh  the  floors,  carpet  and  furniture  so  that   they   smell   fresh.   If   you   smoke   in   the   house,   there   is   probably   not   much   you   can   do   to   totally   rid   yourself   of   the  odour,  but  try  smoking  outside  only  in  lead-­‐up  to  the   Open   Home.     Some   people   are   extremely   sensitive   to   cigarette  smoke.     Avoid   cooking   any   meals   that   have   strong   odours   –   especially   chillies,   onions,   fish   or   curries   –   for   at   least   a   couple   of   days   before   the   Open   Home.     Keep   windows   open,  and  use  extractor  fans,  during  the  cooking  of  these   meals  too.   Keep  windows  open  the  day  before  the  Open  Home  if  you   can.     Don’t   forget   the   bathroom   windows   too.     Use   portable   fans,   ventilation   systems   and   air   fresheners   if   the   situation   warrants   it   –   but   make   sure   you   remove   them   before   the   Open   Home   otherwise   people   will   wonder   what   you're   trying   to   hide.     Your   agent   will   49    


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appreciate it  if  you  have  opened  up  the  windows  as  you   leave  the  property,  just  before  the  Open  Home  starts.   Now   that   we   have   cleared   bad   odours,   let’s   talk   about   nice   fragrances.     We   generally   feel   good   when   we   walk   into   a   room   that   smells   nice,   but   it’s   so   easy   to   over-­‐do   fragrances.    So  keep  it  subtle,  otherwise  people  will  think   you’re   trying   to   cover   up   something.     Nothing   works   better   than   natural   fragrances   –   meaning   freshly-­‐cut   flowers.       Some   things   that   were   once   considered   “all   the   rage”   in   running   Open   Homes   are   now   perceived   as   the   home   owner  trying  too  hard  and  again  appearing  disingenuous   or   even   deceitful.     Nothing   turns   a   buyer   off   faster.     So   you  may  want  to  heed  the  following  warnings  if  you  are   planning  an  Open  Home:       •

Don’t have  a  coffee  pot  brewing.  Perhaps  you  can   place   a   jug   of   iced   water   and   glasses   for   the   agent   and  visitors;   Don’t   do   any   baking.     It’s   just   too   obvious   and   people  see  right  through  it.    Serious  buyers  don’t   attend   Open   Homes   for   food   or   drinks,   and   they   don’t  expect  it  either;   Don’t   play   soothing   music   or   any   music   for   that   matter.     Again   it’s   just   too   obvious.     You   are   not   trying  to  put  buyers  to  sleep.    You  actually  want  to   50  


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do the   opposite.     People   have   different   musical   tastes.    And  what  are  you  trying  to  hide  anyway?     Is   it   the   sound   of   the   traffic   on   the   busy   road?     People  need  to  know  these  things  up-­‐front.    When   viewing   a   property,   most   people   appreciate   having   the   opportunity   to   view   without   any   distractions.   Other  Tips   If  you  are  using  a  real  estate  agent,  my  best  advice  is  to   leave   them   to   it.     They   know   what   they’re   doing   and   sellers   who   insist   on   being   present   during   viewings   are   usually  more  of  a  hindrance  than  a  help.    It  can  take  a  few   minutes  for  the  agent  to  complete  their  set-­‐up  –  and  they   can  often  be  short  of  time  if  they  have  back-­‐to-­‐back  Open   Homes   that   day.     So   be   respectful   and   avoid   getting   in   their  way  during  their  set-­‐up.   Make   sure   all   valuables   (especially   smaller,   portable   items)  have  been  removed  from  the  property  or  securely   stowed  away.    If  the  Open  Home  gets  busy,  neither  you  (if   you’re   running   the   Open   Home)   nor   your   agent   will   be   able  to  monitor  everyone’s  movements.   Take  down  or  remove  any  family  photos  if  you  value  your   privacy.     By   hanging   numerous   photographs   of   your   family,   you   can   make   it   psychologically   harder   for   a   51    


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potential buyer  to  see  their  family  in  your  home.    Replace   these  photos  with  nice  pieces  of  art  instead.   Turn   on   all   the   lights   to   make   the   house   appear   light,   and   to  hide  any  dark  spots.   Take  any  clothing  off  the  clothesline  as  they  will  obstruct   views  and  may  contain  some  personal  items.    If  you  have   any  dirty  or  smelly  items  of  clothing  in  the  laundry,  take   them  with  you  as  you  leave.   Make  an  extra  effort  to  clear  and  tidy  the  entrance  to  the   property.     First   impressions   mean   everything.     So   clear   any   weeds   or   leaves   that   have   appeared;   remove   any   junk   mail   that   has   been   stuffed   in   the   letterbox;   sweep   any   stones   or   pebbles   on   the   path   etc.     Your   agent   will   appreciate  not  having  to  do  this  when  they  are  trying  to   get  ready  for  visitors.    

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Chapter 9:  Fix  Defects  

 

Most buyers   look   for   a   home   that   is   ready   to   move   into   immediately.    So  when  viewing,  they  expect  to  see  what   the  house  looks  like  in  its  best,  liveable  condition.    From   there,   they   will   imagine   what   it   would   look   like   if   their   family  was  in  your  house.       Of  course,  the  exception  is  the  buyer  who  is  looking  for  a   doer-­‐upper   (or   fixer-­‐upper)   because   they   want   to   renovate   the   property   on   a   large   scale   –   with   a   view   to   creating  equity.   So  unless  you're  selling  a  doer-­‐upper,  you  need  to  fix  any   defects   and   obvious   problems.     Don’t   leave   problems   unattended   since   you   and   your   agent   might   have   a   duty   to  disclose  them  anyway.    Outstanding  work  and  defects   will  only  get  in  the  way  of  the  negotiation  process  later.       There   is   no   quicker   way   to   make   a   buyer   scowl   than   to   show  them  a  property  with  cracked  windows;  doors  that   won’t   open   or   close;   broken   downpipes;   peeling   paint;   leaking  taps  and  so  on.    It  gives  the  buyer  the  impression   that  the  owner  hasn’t  cared  for  the  property.      

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If the  owner  hasn’t  bothered  fixing  the  obvious  problems,   what  are  the  chances  of  the  owner  having  fixed  any  latent   problems?       That’s   why   it’s   so   important   to   get   on   top   of   these   little   things   because   once   a   prospective   buyer   sees   one   problem,  they  will  start  looking  for  others.   So   get   started   and   invest   a   bit   of   money   to   fix   these   problems.    Go  through  each  room  and  inspect  everything.     Sometimes  we  are  so  familiar  with  our  surroundings,  and   because   we   see   them   every   day,   we   just   can’t   see   the   forest   for   the   trees.     So   have   someone   else   to   do   the   inspection   with   you.     Just   compile   the   list   –   without   fixing   things  on  the  way,  otherwise  you'll  get  distracted.    Make   your  list  first;  prioritise  the  jobs,  and  get  started.       Here  is  a  comprehensive  but  not  exhaustive  checklist:   1. 2.

3. 4. 5.

Check that   all   the   internal   and   external   doors   open  and  close  with  ease;   Make  sure  the  locks,  hinges  and  latches  on  the   doors  work  well  and  that  you  have  keys  for  all   the  locks;   Check  all  the  taps  (inside  and  outside)  for  leaks;   Check   ceilings   for   mould,   especially   in   damp   rooms;   Check  that  every  power-­‐point  is  working;   54  


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6. 7. 8. 9. 10. 11. 12. 13.

14. 15. 16. 17.

Check that  all  handles  and  balustrades  are  fixed   (not  loose);   Check  all  windows  and  fixed  mirrors  for  cracks;   Check   that   all   cupboard   doors,   hinges   and   latches  work  well  ;   Make  sure  the  garage  door  opens  properly;   Ensure  all  the  lights  work  (and  buy  a  few  spare   bulbs);   Check  that  your  oven  light  works;   Walk  up  the  stairs  and  check  for  creaks;   Check   all   the   electrical   appliances   that   are   chattels   to   make   sure   they   work.     If   not,   then   repair,  replace  or  remove  them;   Get   on   the   roof   and   check   all   guttering   and   downpipes  for  leaks;   Check  the  levels  of  any  sloping  floors;   Check   the   walls   for   any   peeling   paint   or   wallpaper;   Check  all  your  internal  window  sills  for  rot.  

Every minor  thing  a  buyer  can  find  wrong  with  a  house  is   potentially   an   opportunity,   down   the   track,   to   negotiate   the   price   downwards.     Even   worse   still,   the   reduction   in   their   offer   will   be   disproportionately   larger   than   the   actual   repair   cost.     This   is   because   buyers   factor   in   a   premium  for   all  the  inconvenience  of  fixing  the  problems;   they   want   to   include   a   safety   margin   in   case   the   repairs   55    


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cost more   than   they   expected;   and   people   naturally   assume  the  worst,  not  the  best,  scenario.   If  there  are  numerous  outstanding  defects,  the  buyer  will   wonder   what   else   they   will   uncover   once   they   buy   the   property.  The  defects  suggest  that  the  seller  (you)  did  not   care   very   much   about   keeping   the   property   maintained   and  likely  let  it  go  until  the  repair  could  absolutely  wait  no   longer   and/or   that   the   cost   of   repair   was   too   high   to   attend  to.    The  way  the  buyer  sees  it,  they  will  be  taking   on  the  cost  that  is  the  result  of  your  years  of  neglect.       Imagine   what   goes   through   the   buyer’s   mind   as   you   offer   one   lame   excuse   after   another   to   justify   your   neglect.     Every   excuse   adds   to   the   “Reasons   Not   to   Buy”   column.     These   maintenance   items   are   silly   reasons   to   lose   a   potential  buyer.   The  ironic  thing  is  that  even  if  a  prospect  makes  an  offer,   they   will   often   specify   in   the   Special   Conditions   that   the   seller   (you)   must   fix   all   the   defects   by   the   settlement   date.    So  you  might  as  well  just  fix  them  now.   It   makes   sense   to   do   the   work   yourself   because,   unless   the   repair   is   significant   and   very   expensive,   you   will   almost   certainly   recoup   the   repair   costs   –   and   maybe   more!  

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I recommend  that  you  keep  all  your  receipts,  warranties,   consents   and   other   documents   needed   to   prove   you   completed   the   work.     A   serious   buyer   may   want   to   see   this  information.    

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Chapter 10:  Staging  Your  Home  

This purpose   of   this   chapter   is   to   give   you   some   helpful   suggestions  about  how  to  stage  your  home  to  command   the  best  price.   First  Impressions  Count   Can  you  remember  your  first  date?    I'm  sure  you  wanted   to   look   your   best   in   order   to   make   the   very   best   impression  possible.    It’s  the  same  when  selling  a  home.     You  don’t  get  a  second  chance  to  make  a  first  impression.     Psychologists   claim   that   the   average   time   it   takes   a   person   to   form   an   opinion   of   whether   something   is   “good”  or  “bad”  is  three  to  seven  seconds.    Once  they’ve   formed   that   impression,   it   is   very   hard   (but   not   impossible)  to  get  them  to  change  it.   Curbside  Appeal   A  potential  buyer’s  “first  impression”  happens  when  they   see   your   property   for   the   first   time.     So   ask   yourself,   “How   smart   does   my   property   look   from   the   curbside?”     Make  an  extra  effort  when  it  comes  to  your  front  yard  as   it   is   the   first   thing   a   potential   buyer   will   see.     Keep   your   front  lawn  smart,  which  may  mean  cutting  it  twice  a  week   58    


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instead of   once.     Spend   a   little   extra   time   pruning   or   weeding   the   front   gardens.     Use   a   trimmer   to   keep   the   edges  between  the  paths  and  lawn  looking  clean  and  tidy.     The  goal  is  to  have  the  buyer  thinking,  “Wow,  this  home   has  been  well  cared  for”.   If   the   summer   is   hot,   water   your   lawns   and   gardens   generously  to  keep  everything  looking  fresh  and  healthy.     Use   automatic   timers   if   you   are   away   from   home   a   lot.     If   your   lawn   seems   to   have   more   weeds   than   grass,   consider   treating   it   with   lawn   food   and   re-­‐seeding.     For   less  than  $25  you  can  make  your  grass  look  bright  green  –   just   visit   your   local   hardware   store.     The   sooner   you   get   started   the   better,   because   a   renovated   lawn   can   look   ugly  in  the  early  stages.   Remove  Rubbish   It  seems  obvious  but  you  need  to  get  rid  of  any  rubbish,   debris,   broken   or   derelict   items.     It   sends   a   poor   message   to   the   market   that   if   you   can’t   keep   the   obvious   areas   tidy,   there   is   probably   plenty   of   rubbish   hidden   in   less   conspicuous  places.   Remove  Clutter   Remove  any  items  that  create  clutter,  such  as  tools,  toys,   outdoor   equipment,   bins,   recycling,   timber,   building   59    


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materials etc.     These   are   items   that   are   not   needed   every   day,   but   are   not   to   be   thrown   away.     Find   or   create   a   storage   place   to   house   these   items.     You   might   have   a   shed,   or   you   might   be   able   to   find   some   storage   under   the   house,   in   the   rafters   of   your   garage,   or   in   the   gap   between  your  garage  and  your  boundary  fence.    It  might   be   worth   spending   a   bit   of   money   in   some   nice   storage   boxes  and  bins.    They  can  hide  a  lot  of  clutter  quickly.   Spruce  Up  the  Exterior   Many  people  focus  so  much  on  making  the  inside  of  the   house   look   good,   that   they   ignore   the   exterior   of   the   house  and  other  buildings.    Make  sure  you  have  cleaned   the   outsides   of   all   the   windows   and   doors.     A   water-­‐ blaster   is   a   worthwhile   investment   to   clean   the   dirt   and   grime   off   your   cladding,   and   to   remove   stubborn   algae,   mould   and   moss   from   your   fences,   outdoor   furniture,   paths  and  driveway.   If   the   paths   or   driveway   have   cracks,   consider   whether   you   can   repair   them.     There   are   some   amazing   and   affordable   products   on   the   market   to   help   you   repair   such  cracks.    Replace  any  cracked  or  broken  tiles  as  well.   It’s   easy   to   forget   about   the   roof   because   it’s   not   so   visible.     So   get   a   ladder   and   check   out   what’s   going   on   up   there.    Repair  or  replace  any  tiles;  attend  to  any  nails  that   60    


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are missing  or  protruding;  and  clear,  repair  or  replace  any   broken   or   missing   guttering   and   downpipes.     A   roof   takes   a  beating  from  the  elements,  so  it  is  more  susceptible  to   deterioration.     Look   for   opportunities   to   restore,   renew   and  repaint  these  surfaces.   Make   sure   your   rubbish   bins   and   wheelie   bins   look   orderly  and  are  not  overfilled.    If  they  smell,  give  them  a   good  wash.   If   you   have   a   pool   or   pond,   make   sure   they   are   vacuumed/cleaned  and  as  clear  as  possible.     Interior  Presentation   When   it   comes   to   setting   up   your   interior,   you   need   to   de-­‐clutter   again.     You   want   to   make   the   rooms   look   as   spacious   as   possible.     This   is   difficult   to   do   if   there   is   clutter   everywhere.     Plus,   the   clutter   creates   a   distraction   for   the   buyers.     You   want   them   to   focus   on   the   best   features   of   your   home   –   not   the   toys,   remotes   and   books   scattered   around   the   room.     While   you   don’t   want   the   rooms   to   appear   empty   either,   too   little   is   definitely   better  than  too  much.   If   every   surface   is   covered   in   trinkets,   ornaments,   photos,   trophies   and   mementos,   pack   all   but   a   few   carefully   placed   items   away.     Quality   is   better   than   quantity.     61    


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Potential buyers  need  to  be  able  to  picture  themselves  in   your   home   and   if   they   are   overwhelmed   by   your   life,   it   will   block   their   ability   to   see   themselves   living   in   your   home,  and  they  will  look  elsewhere.     Most   of   these   items   probably   need   to   be   sold   at   a   garage   sale  or  taken  off  to  the  tip.    But  if  they  are  valuable  and   essential  to  you,  then  store  them  away  or  hire  a  storage   unit   for   a   couple   of   months,   while   your   house   is   on   the   market.   Re-­‐organise   your   wardrobes   too.     By   removing   some   of   your   clothes,   you   can   accentuate   the   space,   no   matter   how   small   your   wardrobe   might   be.     Very   few   people   use   every   item   in   their   wardrobe   all   the   time,   so   we   can   all   make   some   extra   room   in   our   wardrobes.     Instead   of   piling   all   your   shoes   randomly   at   the   bottom   of   your   wardrobe,   invest   in   some   shoe   racks   (or   pop   them   into   some  tidy  storage  boxes  at  least).   Reduce  the  amount  of  “big  furniture”  in  your  home.    For   example,   you   might   have   a   couple   of   big   couches,   matching   armchairs,   a   massive   television,   a   bulky   entertainment  unit  and  a  coffee  table  in  your  lounge.    But   this   amount   of   large   furniture   items   can   make   the   room   look   small   and   cause   people   to   feel   claustrophobic.     Try   re-­‐configuring   your   lounge   so   that   you   have   the   bare   minimum   in   the   room,   without   making   it   look   empty   or   62    


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sparse.   You   can   then   “fill   in”   the   room   with   the   subtle   addition   of   smaller   “feature”   items   like   a   stylish   table   lamp;   stunning   cushions;   one   or   two   pieces   of   nice   artwork  on  the  walls;  a  beautiful  vase  filled  with  freshly-­‐ cut  flowers.   A  large-­‐screen  television  takes  up  an  incredible  amount  of   floor   space,   so   consider   mounting   it   on   the   wall   if   you   can.   Perhaps   your   room   is   huge   and   it   already   looks   sparse.     The   problem   with   too   much   room   is   that   it   can   cause   a   lack  of  warmth  and  atmosphere.    In  this  case,  you  might   need  to  bring  in  some  big  items.    But  this  is  not  a  licence   to  bring  in  loads  of  clutter,  junk  and  tacky  ornaments.   What   if   you   are   selling   an   empty   home?     Research   suggests  that  if  a  tidy  home  is  marketed  for  sale  when  it  is   filled  with  nice,  quality  furnishings,  it  will  achieve  a  higher   price  than  if  it  is  sold  when  it’s  empty.    So  if  you’ve  had  to   move  out  before  listing  your  property  for  sale,  you  might   consider   asking   a   home   staging   company   to   make   some   recommendations  for  you.    If  you  have  a  nice  home,  the   extra   staging   costs   should   be   easily   offset   with   a   higher   sale   price.     Needless   to   say,   these   costs   should   be   included  in  your  budget  at  the  start.     63    


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Clean Like  Your  Life  Depends  on  It   Whether   you’ve   got   a   small   home   or   a   large   home;   in   a   good   location   or   an   average   one;   in   an   apartment   or   a   homestead   –   no   buyer   likes   to   be   in   an   unclean   house.     Even   if   it   is   a   derelict   property   or   a   mortgagee   sale,   the   buyer   will   usually   discount   their   offer   if   the   property   is   unclean  and  untidy  (it  might  be  a  sub-­‐conscious  decision).   Of   course   you   need   to   clean   your   home   through   scrubbing,   mopping,   vacuuming   and   dusting.     But   when   you  are  selling  a  home,  you  need  to  go  the  extra  mile  and   clean  the  areas  that  you  might  normally  neglect  or  rarely   clean.    Get  right  into  the  corners  of  your  pantry;  pull  out   the  couch  and  vacuum  those  hard-­‐to-­‐get-­‐to  places;  run  a   wet   cloth   along   all   your   skirting   boards;   climb   on   a   step   ladder   and   wipe   the   top   of   your   pantry;   fridge   or   microwave;   wipe   down   all   the   walls   and   ceilings;   wipe   down   the   chandeliers   and   curtain   rails   as   they   are   real   dust-­‐collectors.    A  fussy  buyer  will  check  in  these  areas.   Make   sure   you   remove   any   cobwebs   on   the   ceilings,   fixtures,   corners,   doorframes   and   under/back   side   of   furniture.    Dust  your  fixtures  top  and  bottom  and  in  every   crevice,  including  any  fans.    Wipe  all  your  skirting  boards,   architraves   and   sills.     Clean   under   every   cabinet   and   appliance.    If  you  can’t  get  on  your  hands  and  knees,  pay   someone  else  to  do  it.   64    


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Thoroughly scrub   all   your   bathroom   floors,   by   hand   if   possible,   and   get   the   grout   as   clean   and   white   as   possible   with   an   appropriate   cleaning   product   (seek   advice   from   your  hardware  store).   Consider   re-­‐sealing   your   bath   if   the   seal   looks   black   and   mouldy.    Make  sure  the  drains  run  smoothly  and  are  not   clogged.     Use   a   plunger   to   remove   any   hair   that   has   accumulated  in  the  drains.       Wash   all   of   your   windows   and   mirrors   on   a   fine   day,   to   know  they  are  spotless  and  streak-­‐free.     Move  your  furniture  so  that  you  can  vacuum  underneath.     Use  fabric  cleaner  to  freshen  up  your  couches;  and  use  a   carpet  deodoriser  to  freshen  up  your  carpets.    If  you  did   not   replace   your   carpet   before   selling,   make   sure   you   spot-­‐treat   any   problem   areas.     If   it’s   been   many   years   since  you  cleaned  the  carpets  and/or  if  you  have  cats  or   dogs   inside,   it   might   be   wise   to   call   in   a   professional   carpet   cleaner.     They   have   powerful   equipment;   they   know   how   to   treat   a   wide   range   of   tricky   stains;   and   for   a   bit  more  money  they  can  do  a  commercial  clean  on  your   couches  and  arm  chairs  as  well.   Make   a   big   effort   to   dress   up   your   beds.     That   means   using   attractive   modern   bedspreads,   with   thick   inners.     Fill  the  head  of  the  bed  with  lots  of  plump,  stylish  pillows   65    


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and cushions.     Finish   it   off   with   a   couple   of   stylish   bed-­‐ side  lamps.   All   this   cleaning   might   sound   at   bit   overwhelming,   but   there  are  a  few  things  you  can  do  to  make  it  easier:   •

• •

If you  are  not  in  a  hurry  to  put  your  home  on  the   market,   just   commit   half   an   hour   every   day   to   cleaning   your   home.     You'll   be   surprised   how   much  work  you'll  get  done;   If   you   are   in   a   hurry,   hire   a   professional   cleaning   company  to  do  most  if  not  all  this  work  for  you;   Ring   around   all   your   family   and   friends   for   a   “Big   Clean”  on  a  Saturday  morning”  followed  by  pizzas   for  lunch.    It’s  a  lot  of  fun  when  everyone  chips  in,   and   it   breaks   a   huge   job   for   a   couple   down   to   a   small  job  for  a  group.    Just  get  the  word  out  early   because   people   usually   need   a   bit   of   warning.     Flick   out   a   reminder   text   a   couple   of   days   beforehand.    Make  sure  you  have  all  the  cleaning   materials   they   need   (or   ask   them   to   bring   some   with  them)  and  keep  them  well  fed  and  watered.     Play   some   upbeat   music   to   keep   the   mood   buoyant.     Don’t   be   scared   to   ask   as   the   worst   thing   they   could   say   is   “no”.     Usually   one   or   two   people  front-­‐up  and  that  will  at  least  double  your   numbers!   66  


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Focus on  the  Two  Most  Important  Rooms   No   two   rooms   impact   a   buying   decision   quite   like   the   kitchen  and  bathrooms.    Buyers  know  how  much  it  costs   to  replace  or  renovate  a  kitchen  or  bathroom,  so  if  these   rooms   are   shoddy,   the   buyer   will   recoil   or   reduce   their   offer   according.     If   these   rooms   are   tasteful   and   stylish,   the  buyer  will  be  more  willing  to  meet  the  seller’s  price.       According   to   valuers,   if   you   replace   or   renovate   these   rooms  properly,  you  could  recoup  your  outlay  by  as  much   as   200%.     But   if   you   refuse   to   replace   or   upgrade   a   horrible   kitchen   or   bathroom,   the   buyer   could   reduce   their  offer  by  as  much  as  200%  of  the  cost  it  would  have   taken   you   to   do   it.     It’s   only   natural   for   a   buyer   to   view   such  problems  with  their  “worst-­‐case  scenario”  mind-­‐set.   But   make   sure   you   don’t   overspend   on   these   rooms,   on   the   assumption   that   you'll   automatically   double   your   investment   every   time.     You   still   need   to   be   wise   about   what   you   do.     Your   budget   should   be   set   according   to   the   quality  of  your  home.    Don’t  go  overboard  and  if  in  doubt,   just   aim   to   create   something   conservative,   clean   and   stylish.    

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Chapter 11:  Should  I  Advertise  a  Price?    

The issue   of   whether   to   mention   a   price   in   your   advertisements,  or  even  an  enquiry  range,  is  one  that  can   polarise   real   estate   agents.     Some   agents   feel   strongly   that   the   price   should   be   left   out;   and   others   think   it   should   be   included   in   the   advertising.     There   are   advantages   with   each   approach   so   I   will   outline   them   below,  to  provide  you  with  a  balanced  view:   1.  Arguments  for  not  listing  a  price  in  your  advertising   •

Some people  value  their  privacy  and  don’t  want  all   their   friends   and   neighbours   to   know   what   their   house   is   worth.     By   omitting   the   price,   you   maintain  a  greater  level  of  privacy;   If   your   home   is   a   “one-­‐of-­‐a-­‐kind”   property,   it   might   be   impossible   to   determine   what   the   market   would   pay   for   it.     So   in   these   situations   it’s   probably   better   to   let   the   buyers   tell   you   how   much  it’s  worth;   You   could   deter   buyers   who   think   they   can’t   afford   your   listed   price.     You   don’t   want   to   put   these   buyers   off   because   once   they’ve   fallen   madly  in  love  with  the  property,  it’s  amazing  how   68  


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• •

people can  find  an  extra  $10,000.    But  this  won’t   apply   if   the   buyer’s   budget   is   $100,000   short   of   what  the  seller  wants;   If  you  list  a  price  and  there  is  a  buyer  who  would   have  paid  more,  you  will  lose  out  on  the  windfall;   If   you   are   selling   your   home   by   auction,   you   will   not  mention  a  price.    You  want  the  process  to  do   its   work.     You   do   not   want   to   sway   or   deter   any   bids  by  mentioning  a  price;   A   well-­‐crafted   advertisement   will   capture   the   attention   of   your   potential   buyers.     If   they   don’t   see  a  price  in  the  ad,  they  might  want  to  contact   your  agent  for  more  information.    This  gives  your   agent   the   chance   to   qualify   the   buyer   and   stimulate   their   interest   (this   argument   has   a   counter-­‐argument  which  I  will  cover  below).  

2. Arguments  for  listing  a  price  in  your  advertising   •

A listing   price   lets   potential   buyers   know   one   of   the  most  critical  facts  about  your  property.    If  you   don’t   mention   the   price,   you   could   actually   deter   buyers  who  incorrectly  assumed  the  property  was   out  of  their  range,  when  in  fact  they  could  afford   it;  

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Some buyers  become  frustrated  when  there  is  no   listing   price   mentioned   in   the   advertising.     They   simply  by-­‐pass  the  listing  and  move  on  to  the  next   one.    You  don’t  want  to  miss  out  on  any  potential   buyers  that  could  buy  your  home;   Listing   the   price   in   the   advertising   reduces   the   amount  of  time-­‐wasters  and  tyre-­‐kickers  that  your   agent   has   to   deal   with,   allowing   them   more   time   to  focus  on  the  genuine  buyers.  

The issue   of   whether   to   include   a   listing   price   or   not   in   your  advertising  depends  on  the  seller  and  the  property.     There  is  no  right  answer  or  wrong  answer.   To  find  the  best  approach  for  you,  give  me  a  call.  

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Chapter 12:  Selling  Privately  

I   know   I'm   biased   because   I   am   a   real   estate   agent,   but   when  I  wrote  this  Chapter  I  tried  as  hard  as  I  could  to  be   objective  and  to  see  things  from  a  seller’s  point  of  view.     Let’s   look   objectively   at   both   options,   starting   with   private  sales:   Selling  it  by  yourself       If  you  have  a  home  for  sale  and  a  friend,  family  member   or  neighbour  wants  to  buy  it  at  an  acceptable  price,  then   of  course  you  should  sell  it  privately.    Of  course,  you  will   need  your  lawyer  to  help  you.       But  what  if  you  don’t  have  a  buyer  and  you  want  to  sell   privately?   The  advantage  of  selling  your  home  privately  is  that  you   will   avoid   having   to   pay   for   the   real   estate   agent’s   commission.    Fair  enough,  since  we  are  talking  about  a  big   chuck   out   of   your   sale   proceeds.     But   there   are   some   serious  downsides  of  trying  to  do  it  all  yourself:   1. Risk  of  getting  it  wrong:  You  will  be  taking  a  huge   risk   with   one   of   your   most   valuable   assets,   because   you   almost   certainly   lack   the   time,   71    


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2.

3.

4. 5.

6.

expertise; experience;   and   skills   needed   to   put   a   real  estate  deal  together  and  to  see  it  through  to   completion;   Fewer  leads:  You  almost  certainly  won’t  be  able  to   reach   the   same   number   of   potential   buyers   as   a   real  estate  agent;   Lower   sale   price:   An   agent   has   honed   their   negotiation  skills  over  many  years  and  many  sales.     Most   laypeople   would   struggle   to   achieve   the   same  selling  price  that  an  agent  could;   Longer   time:   You   probably   won’t   be   able   to   sell   your  property  in  the  same  time  as  an  agent;   Greater  risk  for  buyers:  When  a  buyer  purchases  a   property   listed   with   a   licensed   real   estate   agent,   they   receive   numerous   protections   against   false   representation  etc.    These  safeguards  do  not  exist   to   the   same   extent   when   they   deal   directly   with   the   homeowner.     So   some   buyers   might   be   deterred  by  dealing  directly  with  the  home  owner;   Advertising   costs:   When   selling   privately,   you   need   to   advertise   more   because   you   don’t   have   the   same   buyer   contacts   that   an   agent   has.     And   of  course  you  will  bear  these  costs  yourself  (when   you   use   an   agent,   they   pay   for   some   of   the   advertising  themselves).      

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Plus you   will   pay   the   retail   price   for   your   advertising  (agents  can  access  wholesale  rates).   Selling  through  an  agent   If  you  decide  to  sell  through  a  real  estate  agent,  you  will   be   liable   for   their   commission   if   they   sell   your   property.     While   this   is   a   lot   of   money,   there   are   some   serious   upsides   to   listing   your   property   with   an   agent   that   I   believe   justify   the   cost.     Here   are   seven   compelling   reasons   why   I   think   that   appointing   a   real   estate   professional   is   not   only   a   good   decision,   it’s   the   only   logical  decision  to  make:   1. Wider   exposure:   It   is   unlikely   that   you   can   promote   your   property   to   as   many   potential   buyers  as  a  real  estate  agent  can  –  particularly  an   agent  who  works  for  a  company  with  many  other   agents   (all   who   have   potential   buyers   of   their   own).     Plus,   they   can   introduce   most   of   those   buyers   to   any   property   within   24-­‐48   hours   and   usually   with   just   one   phone   call   or   email   blast.     How   much   time,   and   how   much   advertising   and   marketing,   would   you   need   to   invest   in   to   reach   the   same   number   of   buyers?     It   would   cost   you   thousands  of  dollars  and  it  would  take  weeks.  

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And then  you’d  have  to  show  them  all  through  the   property  yourself.    Do  you  really  have  that  amount   of  spare  time?   2. Lower   offers:   When   potential   buyers   discover   that   you   are   selling   privately,   they   will   often   reduce   their   offers   by   the   amount   that   you’d   normally   pay  to  an  agent  (they  want  to  claim  at  least  half  if   not   all   those   savings).     So   you   won’t   be   saving   anything   at   all,   despite   having   done   all   the   work   yourself;   3. Impartiality:   When   a   third   party   (such   as   a   real   estate   agent)   points   out   the   positive   aspects   of   your   property,   it   has   greater   impact   than   when   you  do  it  yourself.    In  other  words,  buyers  will  take   your   claims   with   a   greater   level   of   caution   and   scepticism;   4. Save   your   time:   You   will   have   to   make   yourself   available  to  handle  all  the  calls,  viewings  and  Open   Homes   that   the   agent   would   otherwise   have   handled   on   your   behalf.     These   enquiries   can   arise   during  the  day  or  night,  week  or  weekend.    Do  you   have   that   sort   of   time?     Can   you   cut   away   from   your   job   at   any   time   to   meet   with   an   interested   buyer?   (I   have   heard   of   many   tales   where   a   deal   has  been  lost  because  the  seller  or  the  agent  was   unable  to  react  quickly  enough);   74    


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5. Right skill   sets:   Do   you   have   the   people   skills;   research   skills;   negotiating   skills;   sales   skills;   and   the   legal   skills   that   an   agent   has   developed   (over   many   years   and   many   contracts)   to   allow   you   to   put   a   real   estate   contract   together?     If   not,   why   would  you  be  willing  to  put  a  deal  in  jeopardy  by   handling  it  yourself?   6. Higher   prices:   A   quality   real   estate   agent   is   a   skilled   negotiator   and   as   such,   they   will   probably   achieve   a   sale   price   that   is   higher   than   anything   you  could  achieve  yourself.    That  premium  would   at   least   be   equal   to   but   is   likely   to   exceed   the   commission   you   would   have   paid   them.     So   why   not   bite   the   bullet   and   give   a   qualified   professional   the   opportunity   to   get   the   best   deal   for  you  from  the  start?   7. Property   Appraisal:   It   would   take   a   layperson   a   lot   of  time  to  find  out  how  much  properties  have  sold   for   in   their   area.     If   you   use   a   real   estate   agent   they   will   do   all   this   work   for   you   at   no   cost.     What   if   you   tried   to   do   this   yourself   and   got   it   horribly   wrong?    You  would  be  basing  all  your  pricing  and   marketing   on   false   information,   which   you   could   pay  for  down  the  track;    

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8. Marketing Plan:  Again  it  would  take  a  layperson  a   lot   of   time   to   develop   their   own   marketing   plan,   but   if   you   use   a   real   estate   agent   they   will   do   all   this  work  for  you  at  no  cost;   9. Greater   protection:   If   you   make   a   mistake   when   trying   to   sell   your   home,   you   have   little   or   no   comeback   against   anyone.     If   you   use   a   licensed   real   estate   agent,   you   have   certain   contractual,   legislative  and  ethical  safeguards  to  protect  you;   10. Advertising:   most   real   estate   agents   offer   their   sole   agency   clients   a   certain   level   of   free   advertising.     This   includes   advertising   on   their   company’s   websites   and   window   advertising   in   their  company  premises;   11. No   sell,   no   fee:   If   the   above   reasons   are   not   compelling   enough   for   you,   then   remind   yourself   that  you  are  only  liable  for  the  real  estate  agent’s   commission  if  they  manage  to  sell  the  property  for   you.     And   of   course   you   are   totally   in   control   of   the   outcome   since   you   decide   whether   or   not   to   accept   any   offers.     You   will   only   do   that   if   you're   happy   with   the   purchase   price   and   all   the   other   terms.    In  other  words,  you  only  pay  the  “price”  if   you  get  the  “result”.  

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But if   you   try   to   sell   your   home   by   yourself,   and   it   doesn’t   sell,   you’ve   done   all   that   work   (or   paid   the   price)  without  any  reward  (result).   Here’s  an  interesting  observation   In   my   opinion,   the   only   professional   groups   that   have   the   skills   to   sell   their   own   properties,   without   the   help   of   a   real   estate   agent,   are   lawyers   and   property   developers.     But   I've   noticed   that   most   lawyers   and   property   developers   I   know   use   real   estate   consultants   to   sell   their   properties   anyway.     Why?     Because   they   don’t   have   the   time  and  they  don’t  want  the  hassle  and  risks  associated   with   operating   outside   their   areas   of   expertise.     It   just   makes  sense  doesn’t  it?    

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Chapter 13:  General  Or  Sole  Agency    

Some home   owners   think   that   the   way   to   get   the   best   price   for   their   property   is   to   list   it   with   as   many   agents   as   possible,   so   they   sign   up   for   a   “General   Agency”   (also   known   as   an   Open   Listing)   with   multiple   real   estate   companies.       A   General   Agency   allows   all   those   companies   to   find   a   buyer,  without  any  one  agent  having  exclusivity  over  the   property.    This  all  sounds  good  in  theory,  but  the  reality  is   far  different.    When  a  real  estate  agent  has  the  security  of   a   Sole   Agency   (also   known   as   an   Exclusive   Agency)   they   get   paid   the   commission,   whether   or   not   the   eventual   buyer   is   introduced   to   the   property   through   them   or   another   company.     This   protects   the   agent   and   allows   them  to  bring  as  many  potential  buyers  to  the  property  as   possible,  with  a  view  to  get  the  best  price  between  them.       A   General   Agency   has   the   following   advantages   for   the   seller:   • •

It puts   the   property   on   the   books   of   all   the   agents   of  all  the  real  estate  companies  involved;   There   are   usually   many   real   estate   signs   on   the   property,  giving  the  impression  to  the  public  that   78  


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• • •

there is   a   lot   of   interest.     But   the   educated   observer  will  not  be  fooled  in  this  way;   The   seller   can   cancel   the   General   Agency   at   any   time;   The   seller   can   find   their   own   buyer   without   incurring  any  commission;   The  property  can  be  of  interest  to  new  agents  or   agents  who  have  no  exclusive  listings  of  their  own,   although   even   then   they   will   probably   focus   on   the   exclusive   listings   being   sold   by   the   company   they  work  for.  

The disadvantages  of  a  General  Agency  are  that:   •

The real  estate  company  will  not  provide  as  much   (if   any)   free   advertising   as   they   provide   for   their   sole  agency  clients;   Most  real  estate  agents  give  priority  (meaning  the   amount   of   time   and   effort   they   spend)   to   their   exclusive   listings,   so   properties   with   General   Agencies  will  often  take  much  longer  to  sell;   If   an   agent   has   a   buyer,   they   will   do   everything   they  can  to  encourage  that  buyer  to  make  an  offer   quickly   –   for   fear   that   another   real   estate   company   could   sell   it   to   someone   else.     But   this   may  mean  it  sells  for  a  lesser  price.  

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A Sole  Agency  has  the  following  advantages  for  the  seller:   •

The agents   working   for   the   real   estate   company   will  work  a  lot  harder  to  sell  that  property  because   they   know   another   company   cannot   come   along   and   sell   the   property   under   their   feet   (or   if   another   company   has   a   buyer,   then   the   listing   company   will   still   receive   most   of   the   commission);   The   agents   have   an   interest   in   creating   competition   between   their   potential   buyers,   to   drive  the  price  up  for  their  seller.    As  stated  above,   this   does   not   happen   with   a   General   Agency   because   an   agent   will   get   their   buyer   to   sign   up   as   soon   as   possible   in   case   another   agent   comes   along  with  a  better  offer  from  another  buyer;   This   whole   issue   is   really   about   quality   versus   quantity.     You   might   think   you’re   getting   more   agents   working   for   you,   but   the   quality   of   their   efforts  is  far  less  than  the  effort  made  when  they   have  the  protection  of  a  Sole  Agency.  

The disadvantages  of  a  Sole  Agency  are  that:   •

If the   seller   finds   their   own   buyer,   such   as   a   friend   or   family   member,   they   will   still   be   liable   for   the   full  commission;  

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If the   seller   wishes   to   withdraw   the   property   from   the   market,   they   have   to   wait   until   the   Sole   Agency  agreement  expires.  

I believe   that   a   Sole   Agency   is   the   best   option   for   the   seller  who  wants  to  get  the  best  price  in  the  fastest  time.       I   can’t   think   of   too   many   real   estate   agents   who   would   argue   with   this.     General   Agencies   are   very   rare   in   big   cities,  but  can  be  found  in  smaller  towns.  

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Chapter 14:  Selling  By  Auction  

Whether you  have  sold  a  property  by  auction  or  not,  you   have  probably  sold  items  through  auction  sites  like  Trade   Me   and   will   be   familiar   with   how   auctions   can   drive   up   prices.    Selling  a  home  by  auction  can  be  the  best  way  to   get  the  highest  price  in  certain  circumstances  and  that  is   what  this  Chapter  is  all  about.   Some  real  estate  agents  list  every  property  they  have  by   auction,   others   don’t.     I   want   to   give   you   a   balanced   view   so   that   you   can   have   an   informed   discussion   about   auctions  with  your  agent.   It   isn’t   very   helpful   for   a   real   estate   agent   to   universally   proclaim   “Auctions   are   the   best   way   to   sell   a   house”,   or   vice  versa,  as  there  are  so  many  variables  that  can  apply.     So   let’s   consider   some   of   the   advantages   and   disadvantages  of  auctions,  to  help  you  decide  whether  an   auction  is  the  best  option  for  you:   Advantages  of  Auctions   •

An auction   can   be   a   good   choice   when   you   have   a   property   that   is   so   unique   that   it   is   difficult   or   impossible   to   identify   its   resale   value.     In   these   82  


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cases, the   market   decides   what   your   house   is   really  worth  at  that  time;   If   you   need   to   sell   your   home   quickly,   or   by   a   specific   date,   an   auction   might   be   the   way   to   go.     By   creating   a   sense   of   urgency,   especially   in   a   seller’s  market,  you  may  motivate  casual  buyers  to   take  action;   If   your   property   is   in   a   highly   sought-­‐after   area,   with   few   other   houses   on   the   market,   then   demand  exceeds  supply.    So  an  auction  will  bring   all  the  eager  buyers  together  in  one  place  at  one   time   –   creating   a   sense   of   competition   and   urgency   that   few   other   selling   methods   can   match;   An   auction   is   a   very   exciting   event   and   people   can   become  very  emotional.    When  there  is  more  than   one   serious   bidder   in   an   auction,   a   skilled   auctioneer   can   create   so   much   excitement   amongst   bidders   that   people   will   often   pay   more   than  they  had  planned  to;   An   auction   can   work   well   when   the   market   is   so   buoyant   that   buyers   are   making   offers   over-­‐and-­‐ above  the  asking  price.    This  is  rare,  although  it  is   happening   in   parts   of   Auckland   at   the   time   of   printing  this  book;  

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When a   bank   (or   any   lender   for   that   matter)   is   forced  to  sell  a  property  under  mortgagee  sale,  it   usually  does  so  through  an  auction.    This  protects   the   bank   from   any   subsequent   claims   (from   the   bank’s   defaulting   customer)   that   it   sold   the   property  too  cheaply;   Bidders   at   an   auction   are   usually   serious,   motivated,   and   all   cashed-­‐up   (or   have   their   finances   confirmed).     An   auction   will   weed   out   tyre-­‐kickers   so   you   know   your   agent   is   only   dealing  with  hot  prospects.  

Disadvantages of  Auctions   •

If you   decide   to   sell   by   auction,   you   might   be   ruling  out  buyers  who  would  have  been  willing  to   make   a   conditional   offer,   such   as   people   who   need   to   sell   their   existing   home   before   buying   yours;     Some  buyers  do  not  like  auctions,  and  they  prefer   to   only   look   at   homes   that   have   asking   prices   in   their   advertising.     If   you   sell   by   auction,   you   might   be   missing   out   on   offers   from   these   potential   buyers;     An   auction   is   not   the   best   option   in   some   situations   such   as   complex,   drawn-­‐out   deals   or   properties  that  need  to  be  sold  subject  to  special   84  


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conditions e.g.   if   the   title   has   not   yet   issued;   if   the   property   needs   to   be   subdivided;   if   there   are   numerous   works   (renovations;   repairs)   to   be   completed;   if   Council   consent   or   re-­‐zoning   is   required  etc;   An  auction  can  be  a  very  stressful  time  for  sellers,   so  you  may  need  to  factor  this  in  if  you  are  prone   to   stress   and   worry.     In   saying   that,   a   protracted   sales  process  can  also  be  stressful;   If  you  decide  to  sell  by  auction,  you  really  need  to   do  this  through  a  real  estate  agent.    It  would  be  a   huge  challenge  for  a  layperson  to  sell  their  home   privately   via   an   auction   (difficult   but   not   impossible   –   of   course   they   would   need   to   hire   an   auctioneer  on  the  day).  

Whichever way  you  go,  I  believe  that  it  is  your  willingness   to   meet   the   market   with   a   fair   price   that   is   more   important   than   the   actual   selling   method   you   use.     Because   every   house   and   every   seller’s   situation   is   different,  I  would  be  only  too  happy  to  meet  with  you  to   discuss  which  approach  is  best  for  you.  

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Chapter 15:  Selling  by  Tender  

How Do  Tenders  Work?   If   a   seller   chooses   to   sell   their   home   by   tender,   prospective  buyers  will  submit  confidential  written  offers   for   the   property   to   the   agent   for   the   seller’s   consideration.     There   is   no   reserve   price   as   such,   but   there   may   be   a   price   guide.     Buyers   can   offer   less   than   this.     In   fact   they   can   offer   any   price   they   like,   and   can   make  their  offer  subject  to  conditions.    The  property  can   be  sold  before  the  tender.       Prospective   buyers   can   register   interest   with   the   agent   and   ask   to   be   informed   if   someone   else   makes   an   offer   before   the   tender   date.     They   then   have   the   option   of   making   an   offer   too.     Once   the   tender   period   expires,   the   agent  provides  the  seller  with  all  the  tenders.    The  seller   weighs   up   all   the   offers   (and   the   conditions   applying   to   each)   and   decides   which,   if   any,   offer   they   want   to   accept.    The  seller  can  reject  all  the  tenders.   Once   a   tender   is   accepted,   the   buyer   is   in   contract   with   the   seller   and   the   buyer   must   work   through   all   of   their   conditions  towards  settlement.       If   a   tender   is   rejected,   the   prospective   buyer   (the   tenderer)   is   under   no   legal   obligation   to   do   anything   more.       86    


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The seller   can,   through   the   agent,   negotiate   with   any   unsuccessful   tenderer   with   the   aim   of   reaching   agreement  on  a  sale/purchase.    It  is  up  to  the  tenderer  if   they  wish  to  do  this.   Advantages  of  Tenders   •

• • • • •

Tenders give   the   seller   incredible   control   and   flexibility.     The   seller   is   not   obliged   to   accept   any   tender.    They  can  weigh  them  all  up  against  each   other   and   either   (a)   Pick   the   best   one   and   reject   the  rest   (b)  Reject  them   all;   or  (c)  Negotiate  with   the  tenderer  of  their  choice;   Like   an   auction,   a   tender   brings   all   the   offers   together  in  one  place  and  at  one  time;   But   unlike   an   auction,   a   tender   is   private   and   confidential;   Unlike   an   auction,   you   can   accept   conditional   offers;   It   encourages   the   buyer   to   put   up   their   best   offer,   first  time;   It   allows   the   market   to   determine   the   property’s   market   value   (ideal   when   dealing   with   a   unique   property).  

Disadvantages of  Tenders   • • •

Not all  buyers  like  tenders;   Not  all  buyers  can  make  an  offer  and  wait  until  the   tender  process  finishes;   Some  buyers  want  the  certainty  of  a  listing  price.   87  


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Like auctions,  selling  by  tender  is  not  for  every  seller  nor   suitable  for  every  property.       Call   me   if   you   want   to   see   whether   it   is   suitable   in   your   case.    

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Chapter  16:  Getting  Legal  Advice    

Buying and   selling   real   estate   has   many   legal   pitfalls   for   the   unwary.     While   a   skilled   and   experienced   real   estate   agent   will   be   familiar   with   many   of   the   legal   issues   involved   in   selling   your   home,   they   are   not   lawyers   and   they  are  not  there  to  offer  you  legal  advice.    Their  job  is   to  help  you  sell  your  home  as  quickly  as  they  can,  for  the   best  price.       So   you   will   need   to   appoint   a   lawyer   (also   known   as   a   solicitor)   to   help   you.     If   you   don’t   have   a   lawyer,   your   agent  might  be  able  to  explain  how  you  can  find  one.   While   you   definitely   need   a   lawyer   to   complete   the   settlement   of   your   sale,   you   technically   don’t   need   a   lawyer   to   sign   a   Sale   and   Purchase   Agreement.     However,   it  would  be  smart  to  contact  your  lawyer  as  soon  as  you   have  decided  to  put  your  property  on  the  market.       If  you  want  your  agent  to  send  a  copy  of  the  contract  to   your   lawyer   before   you   sign,   let   your   lawyer   know   what’s   happening  beforehand.    Make  sure  they  can  move  quickly   when  it  arrives  (they  might  be  busy  or  on  annual  leave).     You  need  to  be  working  quickly  with  your  agent  as  soon   as  they  receive  a  written  offer.    In  New  Zealand,  a  verbal   89    


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contract for  real  estate  is  not  binding  on  either  party  i.e.  it   must  be  in  writing.    Almost  all  sale  contracts  are  written   on   the   standard   contract   approved   by   the   Auckland   District  Law  Society  –  except  for  auctions  and  tenders.   By   law,   a   real   estate   agent   must   present   all   written   offers   to  the  seller.   You   might   need   to   contact   your   lawyer   earlier   (immediately)  if  your  sale  is  unusual  in  some  way,  such  as:   • • • • •

You have  an  offer  to  buy  another  property;   You  have  tenants  in  the  property;   You  are  in  a  relationship  break-­‐up;   You  are  in  default  of  your  mortgage;   You  are  subdividing  your  property.  

If you  need  to  be  out-­‐of-­‐town  during  the  selling  process,   you   might   need   to   talk   to   your   lawyer   about   signing   a   Power   of   Attorney   so   that   someone   else   can   sign   urgently-­‐required  documents  in  your  absence.   Many   lawyers   offer   a   fixed-­‐fee   service   for   sale   and   purchase  transactions.    They  are  usually  happy  to  include   a   pre-­‐contract   consultation   as   part   of   that   fixed   fee   service.     I   suggest   you   give   them   a   call   as   soon   as   you   think  you  might  sell,  and  they  will  guide  you  through  the   process.   90    


Sold! A  Practical  Guide  To  Selling  Your  Home  

A real   estate   transaction   looks   straightforward   from   the   outside,   and   most   transactions   go   through   without   any   problems.     But   there   are   many   times   when   these   transactions   go   wrong.     Your   lawyer   is   there   to   avoid   these   sorts   of   problems,   or   to   help   you   if   it   anything   goes   wrong.   Your  lawyer’s  primary  responsibilities  are:   • • • • • • •

To make  sure  the  contract  protects  your  interests;   To  liaise  with  the  buyer’s  lawyer  about  paying  the   deposit;  satisfying  any  conditions;   To   ask   your   bank   to   release   your   mortgage   in   preparation  of  settlement;   To  liaise  with  your  Body  Corporate  if  applicable;   To  complete  settlement,  on  the  day  you  hand  over   the  keys  to  the  buyer;   To   pay   off   your   mortgage   after   the   sale   is   completed;   To   cover   other   issues   such   as   your   rates,   insurance,  wills  etc.  

Most lawyers  deduct  their  fees  from  the  sale  proceeds.    

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Chapter 17:  Improvements  to  Avoid    

This can   be   a   tough   one.   You   want   buyers   to   love   your   home   and   be   excited   about   buying   it,   but   you   do   not   want  to  spend  money  that  is  not  likely  to  add  any  value  to   the  final  selling  price.    There  are  certain  things  that  have   been   shown   to   add   that   value,   and   the   rest   you   should   avoid.    Let’s  look  at  the  improvements  to  avoid:     Installing  a  Pool   While  you  might  enjoy  lounging  by  the  pool  or  going  for  a   swim   on   a   hot   day,   not   everybody   feels   the   same   way   about  owning  a  pool.    Buyers  know  that  swimming  pools   and  spas  tie  up  a  lot  of  your  time  to  maintain;  and  a  lot  of   expense  to  keep  clean.    Buyers  who  don’t  want  a  pool  will   be   put   off   because   they   realise   that   you'll   want   a   higher   price   because   of   the   pool,   even   though   the   buyer   doesn’t   want   it.     Some   buyers   will   actually   reduce   their   offer   to   cover  the  cost  of  removing  the  pool!     Let’s   face   it,   if   a   buyer   wants   a   pool   so   badly,   they   can   install  one  when  they  move  in.       92    


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Re-­‐Development Potential   If   your   home   is   in   a   high-­‐demand   area,   or   on   a   sub-­‐ dividable   section,   it   might   attract   interest   from   property   developers   who   see   future   capital   gains   in   developing   the   site.     They   might   need   to   demolish   or   remove   the   dwelling   and   any   other   buildings;   demolish   fences;   and   uproot   your   landscaped   gardens.     Perhaps   they   need   to   clear   the   land   to   erect   several   new   homes   or   an   apartment   block.     So   you   will   be   wasting   your   money   if   you  renovate  or  upgrade  the  dwelling,  fences  or  gardens   prior  to  going  to  market.         Expressing  Your  Unique  Personality   Some   home   owners   renovate   their   homes   in   a   way   that   reflects   their   own,   unique   personality   or   to   make   a   statement  to  the  world.    This  can  lead  to  some  interesting   results  such  as  re-­‐creating  a  dolls  house;  erecting  a  huge   but   ugly   fountain   on   the   front   lawn;   installing   windows   made   out   of   recycled   bottles;   concreting   an   entire   front   lawn   etc.     The   problem   is   that   these   improvements   (is   that   the   right   word?)   appeal   to   no-­‐one   other   than   the   current   owner.     These   sellers   will   not   recoup   their   investment   in   the   sale   price   and,   again,   the   buyer   might   actually  reduce  their  offer  to  cover  the  cost  of  removing   the  offending  features.   93    


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Loud Colours   Some   home   owners   like   to   paint   their   walls   in   unusual   colours.    While  there  is  a  place  for  a  feature  wall,  very  few   buyers  will  want  a  house  where  every  room  is  painted  in   vivid,   bright   colours   e.g.   bright   yellow;   red;   green;   purple;   or  even  blue.    If  you  want  to  appeal  to  a  wider  range  of   buyers,  then  paint  your  rooms  in  “quiet  colours”.    These   are   soft   or   neutral   tones   such   as   white,   cream   or   ivory.     If   you   prefer   wallpaper,   again   opt   for   soft   tones.     You   can   then   add   splashes   of   colour   through   ornaments;   plants;   cushions,  mats,  towels,  bedcoverings.   Potential   buyers   will   probably   not   share   your   artistic   vision   and   may   not   appreciate   that   you   can   name   all   of   your   bedrooms   by   a   different   fruit.     Buyers   need   to   be   able  picture  themselves  in  your  property  to  create  a  place   of  their  own.    That’s  so  hard  to  do  if  your  house  screams   your  own  personality!     Replacing  Fittings   You   might   have   taps,   light   fittings   or   chattels   that   are   broken,   out-­‐dated   or   in   need   of   replacement   for   some   other   reason.     Be   careful   about   what   you   replace   them   with.    Does  your  property  warrant  top-­‐of-­‐the-­‐line  fittings   or   does   it   require   something   more   simple   (tidy   but   not   extravagant)?   94    


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You need  to  be  100%  confident  that  you'll  at  least  recover   the   cost   of   your   improvements,   if   not   more   than   that.     But  you  don’t  want  to  choose  something  so  extravagant,   tacky   or   inappropriate   that   it   will   lose   you   money   –   or   worse,  buyers!   Uncovering  Hidden  Problems   You   might   decide   to   rip   up   your   carpets   in   a   rush   of   enthusiasm,  so  you  can  restore  the  beautiful  floorboards   underneath  to  their  former  glory.    But  you  might  discover   the   timber   is   full   of   borer   or   that   half   the   rooms   have   chipboard   floors!     It   might   be   worth   a   trip   under   the   house   with   a   torch   and   a   builder   to   see   what   you're   dealing  with  before  you  lift  the  carpets.    You  could  have   the  same  problem  when  ripping  down  wallpaper  –  do  you   know   what’s   underneath?     You   may   never   recoup   your   renovation  costs.   Carpeting  Over  Natural  Floorboards   This  is  the  reverse  situation  of  the  previous  paragraph.    If   you   have   timber   floor   boards,   you   might   be   tired   of   them   and   think   they   are   noisy   to   walk   on   and   they   are   too   cold   in   winter.     Before   you   rush   into   carpeting   your   home,   remind   yourself   that   we   all   have   different   tastes.     Some   buyers   will   love   the   character   that   timber   floors   bring.     They  may  feel  it  creates  a  family  atmosphere.       95    


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Even floors   with   big   water   spots   are,   to   many   buyers,   preferable   to   carpet.     Maybe   a   professional   floor   sander   can  remove  the  stain.    A  new  buyer  may  just  lay  down  a   rug  or  strategically  place  their  couch  over  it.   Of   course,   if   you   have   thread-­‐bare   carpet   that   looks   stained   and   horrible,   and   there   are   solid   floors   underneath,  you  may  actually  want  to  consider  pulling  up   the   carpet.     Even   the   old   nail   holes   in   the   floor   add   character.   Failing  to  Get  Council  Consent   Many  home  improvements  require  Council  permission  or   consents,   even   before   the   work   begins.     You   should   never,  ever,  ever  undertake  this  work  without  gaining  all   the   necessary   consents.     A   savvy   buyer   will   check   the   public   records   to   ensure   the   necessary   consents   were   obtained,   or   they   might   hire   a   tradesman   to   inspect   the   property   as   part   of   their   due   diligence.     This   might   be   done   before   they   make   their   offer   or   they   might   have   included   it   as   a   special   condition   in   the   contract   (where   they   are   allowed   to   cancel   the   deal   if   their   builder’s   inspection  is  unsatisfactory  in  any  way).    These  problems   are  very  difficult  to  fix  after  the  contract  has  been  signed   or  after  it  becomes  unconditional.    In  fact,  you  might  still   be  liable  for  fixing  the  problem  after  settlement.   96    


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Poor Workmanship   Have   you   ever   seen   a   house   that   has   a   poorly-­‐finished   paint   job   (including   over-­‐paint   on   the   window   panes)?     Not  only  does  it  look  terrible,  but  the  buyer  is  groaning  at   the   prospect   of   re-­‐painting   the   whole   house   again.     If   you   intend   to   carry   out   any   renovations   or   improvements,   make   sure   you   have   the   skills   to   complete   it   to   a   high   standard.    If  not,  hire  a  professional  to  do  it,  or  don’t  do  it   at  all.       Fencing  Disputes   You  might  be  aware  that  in  New  Zealand  you  can  seek  a   half-­‐share  contribution  from  your  neighbour  if  you  erect  a   reasonable  fence  on  your  shared  boundary.    So  you  might   be   tempted   to   replace   that   old   fence   in   preparation   of   selling,   and   get   half   the   cost   back   from   your   neighbour.     But   be   aware   that   you   need   to   give   your   neighbour   written   notice   of   this   work   before   you   start,   and   they   have   certain   rights   of   objection   which   could   drag   on   for   some   time.     Do   you   really   want   to   risk   scaring   off   a   potential  buyer  because  of  a  prolonged  fencing  dispute?   Building  on  Disputed  Land   Most   people   assume   that   fences   are   built   on   the   boundary   lines,   but   this   is   not   always   the   case.     If   a   home   97    


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owner builds  a  fence  or  improvements  on  land  owned  by   their   neighbour,   they   have   a   potential   problem   if   the   neighbour   insists   that   the   fence   or   improvements   are   to   be  removed.   If   you're   not   sure   where   your   boundary   lines   are,   don’t   build   anything   on   land   near   the   boundary.     If   you’re   set   on   undertaking   the   work,   either   hire   a   surveyor   to   re-­‐ define   the   boundary   lines;   or   build   the   improvements   well  inside  your  property.    Otherwise,  abandon  your  plans   altogether   because   it’s   just   not   worth   the   problems   that   could  follow.   Making  Large  Landscaping  Decisions   Think  carefully  before  cutting  down  any  big  trees  on  the   property.   This   all   goes   back   to   personal   preferences.     Some   buyers   might   be   horrified   and   upset   if   you   cut   down   a   tree   that   took   decades   to   mature   and   they   would   have  wanted.    Trim  these  trees  by  all  means,  but  don’t  go   making   big,   irreversible   decisions   for   your   potential   buyers.     Remember,   they   can   always   cut   the   tree   down   after   settlement   or   they   can   ask   you   to   do   it   as   part   of   their   offer.     Be   careful   too   if   your   trees   might   be   protected  by  law.    

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Chapter 18:  Common  Mistakes  By  Sellers    

1. Dismissing  an  early  or  low  offer   If   you   list   your   home   for   sale   and   an   offer   comes   in   early,   it’s   only   natural   to   think   that   maybe   you   set   the   price   too   low  (assuming  you’ve  listed  an  asking  price)  or  that  you’ll   keep  getting  more  and  higher  offers.    In  these  situations,   many   sellers   turn   the   offer   down   and   wait   for   others   to   keep  rolling  in.    And  they  keep  waiting  and  keep  waiting.     I  can’t  count  the  number  of  times  I've  heard  a  seller  say  “I   wish  I  could  go  back  in  time  and  accept  that  first  offer”.   The  best  approach  is  to  treat  every  offer  on  its  merits  i.e.   don’t  dismiss  the  offer  solely  because  it’s  the  first  offer.    It   might  end  up  being  the  only  one!    If  the  offer  is  close  to   your  target  price  then  you  need  to  consider  it  seriously.   Remember,   you   still   have   the   opportunity   to   make   a   counter-­‐offer.    Hopefully  the  other  party  will  meet  you  in   the  middle  in  which  case  you’ve  just  sold  your  home!   You   should   factor   in   a   premium   for   selling   your   home   quickly   because   there   are   many   financial   and   non-­‐ financial  benefits  that  follow  a  quick  sale,  including:     99    


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• • • • •

No more  advertising  and  marketing  fees;   You   can   make   an   unconditional   offer   on   your   next   home;   No  more  viewings  or  Open  Homes;   More  certainty;   Less  stress.  

2. Setting  an  unrealistic  asking  price   Selling   for   the   right   price   is   important   –   very   important.     I   covered  this  in  detail  in  Chapter  4  so  let  me  just  say  that   the  most  common  and  serious  mistake  that  sellers  make   is   over-­‐pricing   their   property.     They   hope   and   pray   that   someone  will  pay  “absolute  top  dollar”  but  that  is  a  long-­‐ shot.    Hoping  does  not  replace  solid  market  research.   Market   your   house   at   the   right   price   from   the   start   and   don’t  be  afraid  to  accept  an  offer  when  you  receive  a  fair   price.   3.   Signing   a   listing   agreement   with   an   agent,   but   intending  to  re-­‐negotiate  the  commission  later     Not   only   is   this   unethical,   it   breaches   the   terms   of   the   listing   agreement.     If   the   agent   has   managed   to   find   a   buyer  at  a  price  and  on  terms  that  are  satisfactory  to  the   seller,  the  agent  should  be  entitled  to  the  full  commission   set  out  in  the  listing  agreement.       100    


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If anything,  the  agent  should  be  hailed  a  hero  for  achieving   such  a  positive  result  for  the  seller.   Sometimes   a   seller   tries   to   justify   their   position   by   arguing   that   because   the   property   sold   so   quickly,   the   agent   doesn’t  deserve  their  full  commission.    It  seems  ironic  that   the   agent   has   performed   over-­‐and-­‐above   the   seller’s   expectations,   yet   the   seller   wants   to   penalise   the   agent   by   reducing   the   agreed   fee.     That’s   like   docking   the   New   Zealand  cricket  team  40%  of  their  match  fee  because  they   won  the  test  match  in  three  days,  instead  of  five.    The  goal   was   to   win   the   game   –   if   they   managed   to   do   it   quickly   that’s   great.     But   their   reward   should   be   based   on   the   result,  not  on  the  time  or  effort  that  it  took.    It  is  exactly   the  same  when  a  real  estate  agent  is  selling  a  home.     [I   wonder   if   the   seller   would   be   happy   to   pay   the   agent   more   if   it   took   them   longer   to   sell   the   property.     I   don’t   think  so.]   4.    Adding  a  huge  “negotiating  margin”  to  the  price   This  only  applies  to  properties  sold  with  an  asking  price.    A   great   deal   of   work   was   done   to   set   a   target   price,   which   was   predominantly   based   on   what   the   market   is   likely   to   offer   for   the   property.     A   seller   should   trust   the   negotiating  skills  of  their  agent  to  justify  to  the  buyer  why   they  should  pay  the  asking  price.   101    


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While adding   a   small   margin   is   understandable,   adding   a   large   percentage   (five   per   cent   or   more)   might   deter   legitimate   buyers   who   might   not   be   able   to   afford   the   inflated   asking   price.     Why   would   you   want   to   take   that   risk?   5.  Just  testing  the  waters   Some  sellers  list  their  property  on  the  market,  with  a  real   estate  agent,   with   little   intention  of   selling.     Sure,  they  will   accept   an   incredible   offer   if   they   get   it.     But   otherwise,   they’re  just  testing  the  market.   It   takes   a   great   deal   of   time,   effort   and   money   to   sell   a   home.     If   you   ask   a   real   estate   agent   to   promote   your   property  and  they  find  a  buyer  with  a  reasonable  offer,  it   is  extremely  unfair  to  the  agent  and  the  buyer  if  you  refuse   to  accept  the  offer.   If  you  want  to  take  this  approach,  I  would  suggest  that  you   be  honest  with  the  agent  at  the  beginning,  or  that  you  try   to  sell  the  property  privately.   6.    Thinking  everyone  is  an  animal  lover   Most   pet   owners   love   their   animals,   and   many   of   them   assume  others  feel  exactly  the  same  way.    But  there  are   many   people   who   don’t   really   like   animals   that   much.     Some  are  afraid  of  dogs,  even  little  ones,  or  they  may  be   102    


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allergic to  pet  hairs.    Others  are  sensitive  to  animal  smells   and  intolerant  of  animals  living  inside.    This  applies  to  real   estate  agents  as  well  as  potential  buyers.   So  it  is  best  to  play  it  safe  as  far  as  animals  are  concerned.     Before  viewings  and  Open  Homes,  make  sure  you:   • • • •

Either tie-­‐up  or  remove  your  dog;   Keep  pet  food  trays  clean  and  tidy;   Remove  or  minimise  strong  pet  odours  inside  your   home;   Remove  droppings  on  the  lawn.  

7.  Trying  to  sell  privately   It   is   understandable   for   a   seller   to   want   to   avoid   paying   real   estate   commission,   especially   if   they   think   they   can   do  it  themselves.      If  you  have  the  skills  to  sell  your  own   home,   or   if   you   have   already   found   your   own   buyer,   then   by   all   means   you   should   do   it   yourself   (consult   your   lawyer  first  though).       Statistics   show   time   and   again   in   every   kind   of   market   that   you   will   get   a   better   price   and   your   house   will   sell   faster   when   you   work   with   a   reputable   real   estate   consultant.       Incidentally,   most   people   have   no   idea   how   much   work   an  agent  does  behind  the  scenes.    So,  they  tend  to  under-­‐ 103    


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value the   role   of   the   agent.     Remember,   a   real   estate   agent  only  gets  paid  if  they  sell  your  property.   8.  Trying  to  sell  “As  Is”     Some  home  owners  fail  to  maintain  their  home  and  they   allow  its  condition  to  deteriorate.    When  it’s  time  to  sell,   the  owner  can  be  overcome  by  the  amount  of  work  and   time   it   will   take   to   bring   the   property   up   to   a   saleable   condition.   In   Chapter   9   we   discussed   the   big   price   a   seller   can   pay   for   refusing   to   fix   defects   and   other   problems.     A   buyer   will   often   discount   their   offer   by   more   than   the   amount   the   seller   would   have   incurred   had   they   fixed   all   the   problems.       Of   course,   some   properties   are   so   dilapidated   that   they   are   sold   as   doer-­‐uppers   to   DIY   enthusiasts.     There   is   no   problem  with  this,  especially  if  the  seller  lacks  the  capital   to  do  all  the  repairs  and  renovations.   Of   course,   there   are   situations   when   sellers   need   to   sell   quickly  and  they  simply  don’t  have  time  to  effect  repairs.   9.  Refusing  to  pay  for  marketing   When   an   agent   sits   down   with   the   seller   to   develop   the   Marketing  Plan,  the  seller  can  often  baulk  at  the  prospect   104    


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of having  to  invest  several  thousands  of  dollars  into  their   marketing  campaign.    Similarly,  when  a  property  has  been   on   the   market   for   a   while,   the   seller   can   become   despondent   and   reluctant   to   keep   investing   in   more   advertising.       You   may   think   the   agent   should   pay   for   the   advertising   and   marketing   out   of   their   commission.     But   the   commission   is   for   selling   the   property,   not   marketing   it.     Besides,  the  agent  only  gets  paid  their  commission  if  the   property  sells.       While   an   agent   might   offer   to   do   some   advertising   for   free,  it  is  the  seller  who  usually  has  to  pay  for  marketing   tools   such   as   the   property   board/sign;   newspaper   advertising;   property   magazine   advertisements;   online   videos;  television  advertising  etc.    It’s  a  big  mistake  to  opt   for   minimal   advertising.     There   are   often   many   properties   on   the   market   and   potential   buyers   will   never   find   a   property  unless  it  is  well-­‐advertised.    Asking  a  real  estate   agent   to   sell   your   home   without   giving   them   an   advertising  budget  is  like  asking  a  mechanic  to  fix  your  car   without  using  a  spanner.    They  might  manage  to  get  the   job   done,   but   it’ll   be   difficult   and   will   take   them   a   lot   longer.       In  our  company  we’ll  produce  a  television  commercial  at   no  cost  to  you.    If  you  went  to  an  advertising  agency  you   105    


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could spend  anywhere  between  $5,000  and  $8,000  for  a   15-­‐second   commercial.     At   that   price   it’s   just   not   an   option  for  most  sellers.   As  a  guide,  set  aside  around  1%  of  the  appraisal  figure  for   marketing.    If  you  commit  fully  to  the  Marketing  Plan,  you   might   just   sell   your   home   faster   and   thereby   end   up   spending  less  on  advertising  overall.   10.  Failing  to  disclose  problems   If  the  seller  fails  to  tell  the  agent  of  a  problem  with  their   property  (such  as  the  fact  that  they  didn’t  get  a  building   consent  for  the  carport),  it  will  usually  come  up  later,  with   huge,   negative   consequences   for   the   seller.     Honesty   is   usually   the   best   policy,   and   a   skilled   agent   may   be   able   to   offer   some   suggestions   to   either   fix   the   problem   or   minimise   the   effects   of   it.     I   recommend   that   you   be   honest  about  the  following  sorts  of  problems:   • • • • •

Faulty plumbing  or  electrical  issues;   Malfunctioning   appliances   (if   they   are   chattels   to   be  sold  with  the  property);   Boundary  disputes;   Drainage  problems;   Leaking  roof.  

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11. Lack  of  flexibility   It’s   impossible  to   foresee  all   the  problems  that  can  arise   when  selling  a  property.    Things  don’t  always  go  the  way   we   want   in   real   estate,   and   a   seller   needs   to   be   ready,   willing  and  able  to  make  adjustments  to  their  plan.    You   will   get   the   best   results   if   you   are   open   to   sensible   advice   from   your   professional   advisors,   and   not   distracted   by   well-­‐meaning   but   often   ill-­‐informed   friends   and   family.     Your   real   estate   agent   has   probably   been   in   the   same   situation   many   times   before.     You   are   paying   for   their   experience   and   expertise,   so   work   as   a   team   and   take   their  advice.    A  common  example  of  this  is  during  the  final   stages  of  negotiation.    Sometimes  the  parties  can  be  just   a  few  hundred  dollars  apart  and  the  deal  is  lost  because   neither   party   would   compromise.     Be   flexible   enough   to   create  a  win-­‐win  in  these  situations.   11.  Choosing  the  wrong  agent   You   need   to   choose   a   real   estate   agent   with   credentials   and   a   proven   track   record.     They   need   to   have   strong   negotiating   skills.     They   need   to   be   able   to   put   your   property   in   front   of   the   right   kind   of   buyers   who   will   be   interested  in  a  home  like  yours.    Do  not  choose  an  agent   simply   because   you   like   them,   or   (worse)   because   they   said  they  could  sell  your  property  for  the  highest  price.       107    


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In Chapter  5  we  discussed  how  to  choose  the  right  agent   for  you.   12.  Using  poor  quality  photographs   There   is   nothing   quite   like   a   well-­‐chosen,   high   quality   photograph   to   motivate   a   potential   buyer   to   call   the   agent   or   attend   an   Open   Home.     A   poorly-­‐chosen   photograph   probably   won’t   deter   a   buyer,   it   will   just   leave   them   feeling   neutral   about   your   property.     If   you   are  paying  for  a  large  sign  board  for  your  front  lawn,  the   sign  writer  will  need  a  high-­‐resolution  photograph.   I   highly   recommend   that   you   pay   for   a   professional   photographer  to  take  photos  of  the  very  best  features  of   your   property.     A   good   photographer   with   a   good   selection  of  lenses  can  add  thousands  to  the  asking  price   of   your   home.     More   recently,   walk-­‐through   digital   (movie)   cameras   and   other   technology   have   become   more   affordable   and   readily   available.     These   extra   initiatives   are   well   worth   your   investment   and   may   help   make  your  home  more  appealing  to  prospective  buyers.   You   might   be   surprised   to   know   that   prospective   buyers   often   go   away   after   a   viewing   and   continue   to   view   the   photos   and   videos   of   the   house   they’ve   just   walked   through.    Further,  these  potential  buyers  can  be  positively   influenced,   if   the   imagery   is   good,   by   comments   from   108    


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their friends   and   family.     Many   a   time   I’ve   had   buyers   come  back  weeks  later  because  they  can’t  get  the  house   out   of   their   mind.     I   never   rule   out   anyone   that’s   been   through  an  Open  Home  or  a  viewing.    You  just  don’t  know   what  is  going  through  their  mind  and  even  when  they  say   they  don’t  wish  to  pursue  it  any  further,  I  always  make  a   note   and   keep   them   informed   down   the   line.     I’ve   done   this  many  times  and  surprise,  surprise,  the  original  reason   for   them   not   proceeding   has   disappeared   or   their   situation  has  changed.    

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Chapter 19:  Conclusion  

In conclusion,  I  hope  you’ve  enjoyed  my  book  and  you’ve   learned   something   about   selling   your   home.     At   the   expense  of  pushing  my  own  wheelbarrow,  I’d  like  to  think   that  this  book  shows  you  my  commitment  to  my  chosen   profession  of  a  real  estate  agent.       I   absolutely   love   showing   people   through   homes,   I   love   marketing   and   I   love   making   dreams   come   true   for   my   clients.   By   now   you’ll   realise   that   selling   a   home   is   a   series   of   strategies   and   smart   manoeuvres.     Anyone   can   sell   a   home,   but   it   takes   a   true   professional   to   get   the   best   price  in  the  best  time  frame.      

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Chapter 20:  My  Happy  Clients  

“As part  of  our  move  into  our  new  home,  I  engaged  Paul   Blackler   to   sell   our   previous   home   at   50   John   Campbell   Crescent,   Middleton,   Christchurch.     The   home   was   just   over  two  years  old  and  was  in  very  good  condition.       Previously   we   had   the   home   listed   with   Harcourts   and   their   overall   performance   was   disappointing.     Paul’s   approach   to   the   sale   of   our   home   was   professional,   conscientious,   understanding   and   well-­‐above   that   received  from  the  Harcourts  experience.       The   home   was   advertised   correctly,   the   signage   was   excellent   and   the   way   in   which   we   were   briefed   after   every   inspection   was   a   credit   to   Paul.     Needless   to   say,   the  home  sold  as  planned  and  at  the  price  expected.       Suffice   to   say   that   we   were   more   than   happy   with   the   final   result   and   would   have   no   hesitation   in   recommending   Paul   to   any   person   or   organisation   that   wanted  a  professional  person  to  manage  the  sale  of  their   property.”               Rob  Hughes  

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“Paul and   the   team   at   Mike   Pero   were   very   helpful   in   keeping   us   fully   informed   on   the   marketing   of   our   property   and   the   interest   generated   by   the   open   days.     We  were  able  to  establish  a  realistic  reserve  price  for  our   auction   which   was   more   than   achieved.     We   found   Paul   very   approachable   and   helpful   with   any   queries   we   had.     Thank  you  Paul.”            

Graham &  Jean   “Thank  you  very  much  for  helping  me  sell  my  home  –  in   four   days!     Your   knowledge   and   experience   with   insurance   issues   was   invaluable.     You   were   very   professional,   a   pleasure   to   deal   with   and   I   would   recommend  you  to  my  family  and  friends  in  a  heartbeat.”        

Sharlene Hosken   “Paul  was  fantastic  in  helping  me  purchase  my  first  home.   He   made   it   completely   hassle   free   and   was   available   for   me   whenever   I   called   on   him.   I   would   definitely   recommend   him   for   anyone   wanting   to   buy   or   sell.   Thanks.”          

Mel Tanner    

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Sold! A  Practical  Guide  To  Selling  Your  Home                         Copyright  2015  Hey  Presto  Publications   All   rights   reserved.     No   part   of   this   publication   may   be   reproduced,   distributed   or   transmitted   in   any   form   or   by   any   means,   including   photocopying,   recording   or   other   electronic   or   mechanical   methods,   without   prior   written   permission   of   the  publisher,  except  in  the  case  of  brief  quotations  embodied   in   reviews   and   certain   other   non-­‐commercial   uses   permitted   by  copyright  law.     113    


- SOLD -  

A Practical Guide To Selling Your Home

- SOLD -  

A Practical Guide To Selling Your Home

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