Need to sell in a hurry? Stay calm and take your time

People under pressure to sell their house have more time than they might think to get organised, experts say.

Those who have lost jobs or who have decided they can’t afford their mortgage don’t have to sell overnight, says Adam Thomson from Ray White Manukau.

Thomson says he’s not seeing clients in this position but if people are thinking about making the painful decision to sell, or who do end up in a position that they need to sell, they should first assess how much time they have and when they need their money by.

“They should never think they have to sell today because even if a bank is closing on them or something like that, the banks have three to six months before they can do anything.

“There’s quite a long period before anything can happen. If they’re going to get mortgagee-sold the mortgagee process has to start and that involves getting multiple agencies in to appraise it and solicitors involved and valuations and it’s three to four months before even the bank could start marketing it.

“So they do have a lot of time there - if it’s financial pressure it’s more time than they think.”

Thomson says talk to the bank because banks prefer the customer to sell the house themselves and can often be supportive.

It’s important to still look around for a real estate agent you can trust and to take the time to check out their credentials, Thomson says.

“A lot of agencies would be able to get you offers on your property in a week but we would be recommending anyone to go to an auction campaign and really opening it up to the market and then setting a settlement date if you want a quick settlement – you get to choose your settlement date.”

Even if an agent says they can sell the house instantly, the client is unlikely to see the money for a month anyway and with the market showing an under-supply of property even a week can generate offers on a property.

“If you find an agent you can trust, you need to be open about them about your situation.”

There are various options the agent may talk through, such as finding a way for the person to stay in the property market even though they are selling their home.

That might include downsizing or moving to a cheaper suburb, or buying an investment property and renting for a while.

“Sometimes people are just over-committed and moving a 15-minute drive away could almost halve their mortgage.”

If thinking of renting, it’s worth thinking about the fact rents in some areas are as much as a mortgage so Thomson advises talking to the bank about refinancing options.

Some people on fixed mortgages might still be paying five or six per cent interest rates which are high compared to the record low interest rates now on offer.

While there are break fees, lower rates could reduce loan repayments considerably.

“The market we work in ($600,000 on average) the mortgage is the same price as rent so you’ve got to live somewhere so you can look at some refinancing options as well before it gets too late.”

Staying in the market is a good option because means people might find it a big hurdle to get back in if they leave.

Those selling – and the market is busy – should still declutter and get the lawns and gardens looking great.

“Tidy it up. Give it as much effort as you can because even in a bad situation you might as well make the most out of it. That’s presentation and just have the conversations early.”

Mortgage broker Rupert Gough, of The Mortgage Lab, also says to do what you can to buy some time so you don’t panic sell.

“The first thing to take advantage of is those Covid hardship options the banks are giving and that buys you the time to put it under a normal deadline for selling a house, rather than ‘I’ve got to sell in two weeks or the bank’s going to do it for me.’”

A mortgage deferral may be the best option as this relieves some of the panic and also means the person doesn’t have to take the first offer that comes in.

They can still go to auction or put the house out to tender for a few weeks to get some interest, and it also means they are protecting their credit report by not having missed mortgage payments.

Gough, too, says spend some time getting the property ready.

“Carpet and paint is a big one, and landscaping. It’s about making people fall in love with it when they walk in the door, or seeing the potential.”

He is a fan of getting an agent to take people through the process: “My view is that the wider audience you can get it to, the more chances of finding that higher bidder, and it just seems that real estate agents have those data bases.”

They are also better negotiators, usually.

While Gough hasn’t had clients fall over, he says the real risk group are those who borrowed at 90 to 95 per cent and there may be some people who are yet forced to sell.

“I think the real key to selling your house is to not have it under mortgage or have PLA notice, which is basically the first step of a mortgagee sale.”

If the bank sells the property they are able to accept any price and the decision of what is the best price is gone from the owner.

“The bank really does want the owner to retain as much income as possible but if an offer comes in that is more than the mortgage then the bank will take that. “