It might seem tempting to sack your agent when your house doesn’t sell, but some of the country’s top agents have warned vendors against risky moves, especially in the midst of a buyer’s market.
Recent figures from OneRoof show that in the last two months there has been a significant surge in the number of new listings, adding to an already swollen market.
Sales, however, have not kept pace, with the Auckland market looking particularly challenging for vendors. Many of the city’s agents spoken to by OneRoof in recent weeks have highlighted lower attendances at open homes and less urgency among buyers.
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The swing to a buyer’s market in such short period of time has put some vendors on edge, and has led to a flurry of homes changing agents and tactics in a bid to secure a sale.
Luxury agent Michael Boulgaris said owners are jumping around agencies like jack in the boxes, and Ollie Wall, from Wall Real Estate, said at the top end the only thing a new agent can offer is a lower price.
Steve Koerber, from Ray White Remuera, advised people to spend some time doing their homework so they find a strong agent in the first place and to make sure the property is looking its best.
Boulgaris said sacking the agent who has put in a bunch of hard work is a bit of a kick in the teeth to the agent, but also just not very wise of the seller.
He urged patience, saying one seller stuck with him for two years, eventually getting a great price.
With the country reportedly in a recession, price adjustments are taking place, he said.
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There could be oversupply in a location, or in a price range, so a lot of owners are having to face up to their property not selling for previous high values, or what they paid for it.
Buyers are resistant to paying premium prices, and part of the problem is banks requiring registered valuations and building reports, and not being keen to lend on homes with issues like plaster components.
For homeowners finding it difficult to sell, the temptation is to think the grass is greener on the other side and switch agencies, said Boulgaris.
“I am witnessing this in the marketplace with all companies, with owners jumping around like a ‘jack in the box’ and often resorting to desperate measures of auction, which is often financial suicide if there are no bids.
“This will place a stigma on the home for future marketing.”
Real estate agent Michael Boulgaris says buyers need to be treated with respect. Photo / Supplied
Buyers have to be treated with respect in this market, he said. They need time to complete their due diligence, satisfy lending institutions, and perhaps have time to sell their own property to purchase another.
But some owners are bringing an element of cruelty into the picture by firing their agent and not staying loyal to the end, he said.
“It saddens me. Agents often work seven days with no reward, miss family engagements and holidays for their commitment to open homes and viewings and really put their heart into the job.”
Owners failing to sell have only a couple of choices in the current market, and one is to accept the reality that after six months the price needs to be lowered to attract buyers and gauge the real value.
Another option is to rent out the property for 12 to 24 months then try again in the hope prices had risen.
They might also look at upgrading old bathrooms or kitchens, or at least freshen a property up with paint and landscaping to make it more desirable.
Or, they can be patient and remain loyal to their agent and ride out the wave, a strategy Boulgaris said usually works in the long-run.
He has been in real estate 37 years and said most of his clients stay loyal and are friends.
“Mr Fred Tong springs to mind. He sat patiently with me for two years [with his house on Paritai Drive, Orakei] and waited for the market to recognise his prized location and we sold the property for $8m some eight years ago.
“The list goes on, but unfortunately the owners in a more desperate situation forget the word ‘thank you’ for your efforts, which goes a long way.”
Wall said at the top end when people switch agents their property’s value is likely to drop.
61 Rose Road, in Grey Lynn, has been with Wall Real Estate for a year. Photo / Supplied
“In our experience when you move from one agent to another it’s sort of like taking an item off a shelf and putting it in the bargain bin in a shop.
“I think from the perspective of buyers it diminishes the value. If you see it with one agent and then another it looks like it’s failed already.”
Properties are taking longer to sell and he understands seller frustrations. When that happens vendors sometimes think they should try something new, which makes sense technically.
“But I think in this circumstance it actually doesn’t work in the favour of the vendors usually.”
The challenge with some houses is finding the perfect buyer and sometimes that takes longer than expected, he said.
The Walls are selling 61 Rose Road, in Grey Lynn, which was on the market with another agency, didn’t sell, was taken off and rested and then put back on with the Walls who have had the listing for a year.
A OneRoof story from last April described the house, owned by DJ Tim Phin, as “the ultimate party house” with a classic villa frontage and a striking black box at the back.
Wall said the “super cool” house is unique and not for everyone.
Ray White agent Steve Koerber: “We often go in and completely change the inside of the house. Some of the owners hate it and can't see the benefit in it but I've got to say it really works.” Photo / Fiona Goodall
“I absolutely love it but if anything it’s a little bit polarising. It’s very classic out the front and ultra modern out the back. It appeals to some people and not others, it’s as simple as that.”
During the sales process the vendors have become more motivated to sell, he said.
“When they first listed it with another agency they were hanging out for top dollar and since then they’ve moved.
“They now live half their time up at Omaha Beach and the other half in LA, so it’s now absolutely, definitely on the market whereas I think probably the first time they listed it was just seeing if they could get a miracle price.”
While this house did change agencies, Wall said on the whole people are better off stopping the advertising and resting the house for a time.
“As soon as you change the agent every buyer who has seen it will see it again and think, ‘okay, this is just got a whole lot cheaper’.”
Koerber said before signing people should do “a damn good job” of investigating their agent.
“A better agent can get you sold and put more money in your pocket. I know that sounds cheesy and obvious but that’s the first bit of advice.”
Sometimes agents unknowingly pitch a property above the market and if they do it won’t sell.
He agreed people are switching agents a bit more than they have been, saying it has happened to him and he’s also picking up properties from other agents, such as 226 Remuera Road, which he said was now likely to be New Zealand’s highest ever auction sale under the hammer when it goes to auction in May.
Billed as arguably one of New Zealand’s most impressive restorations, the Remuera mansion known as Barochan was ironically listed with the Walls early last year.
Koerber said agent hopping is a reasonably common theme and is sometimes about timing, and sometimes about skills.
The completely restored Arts and Crafts mansion known as Barochan, on 226 Remuera Road in Auckland’s Remuera, will be auctioned on May 18. Photo / Supplied
He has a current seller who is asking why the open homes are quiet, to which he replied the market is the market and suggests investing in more marketing to put the property in front of more people.
The strategy does work, he said, with the recent sale of a home on Portland Road, in Remuera, as proof, sold to someone who wasn’t looking at buying a house this year.
“They saw it on OneRoof. It was featured as an editorial [in print in OneRoof Herald Homes] and they came purely because of that. They said ‘that looks amazing’ and they bought it.”
He pointed out sometimes properties don’t sell because of the way they are presented, and that can be as simple as furniture in the wrong place blocking the flow.
“We often go in and completely change the inside of the house. Some of the owners hate it and can’t see the benefit in it but I’ve got to say it really works.”
Staging is another area he highly recommends sellers fork out on, saying these days staging is so common if people don’t stage the buyer often thinks the property is a do-up, preferring the house down the road which is staged.
“If you’ve got old tatty furniture and it’s not well placed in my experience buyers, they probably don’t use these words but subconsciously they think this house is a do-up and the other one is all lovely and modern, and it’s just staging.”
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