An increasing number of sellers are revealing just how desperate they are to close a deal, with more and more listings carrying taglines such as “Bank says sell” or “Must sell” in a bid to catch buyer attention.
Agents who spoke to OneRoof said that some of their clients have been left in the lurch by buyers who have been unable or unwilling to settle, and revealed the extent of financial toll that the market slump is having on sellers.
Analysis of OneRoof data shows that 795 homes have been listed this year with the words “must sell” in their marketing tagline – nearly triple the number for the whole of 2021 and 2020.
Recent examples include a three-bedroom home on Odette Road, in Totara Vale, on Auckland’s North Shore, which loudly declares “NO PLAN B! Must SELL!”, and a six-bedroom home on Hauhake Road, in Flat Bush, South Auckland, which has the tagline: "Overseas Bound Vendor - MUST SELL."
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Both properties are heading to auction in October.
Harcourts Hamilton agent Sandra Treloar told OneRoof she had several clients who needed to sell – either because they had already bought or had made plans to do so.
One of her listings, a property on Normandy Street, in Melville, was advertised with the words “Bank says sell” after it sold at the start of the year, but the buyer failed to settle on multiple occasions.
The owners had already moved into their new home so had been forced to pay two mortgages until the Melville house sold, Treloar said.
She said the owners were then told by the bank they had to sell the property so used this detail in the marketing, with the listing declaring that the property was a “great buying opportunity”.
Another of her clients put their house on Brymer Street, in Grandview, on the market after making an offer on their dream home.
Buying chains like this were pretty common and sometimes there can be up to five people in some chains, she said.
Ray White Papakura principal Sandra Bullock has also seen a number of sales fall over. She said developers were offering big money and failing to settle.
A three-bedroom home at 52 Brymer Road, in Grandview Heights, Hamilton, is being marketed as a “must sell”. Photo / Supplied
“The homeowners got this windfall of money and went and purchased a house that was probably out of their price bracket if their property sold for what it should have sold for before the developers overinflated it,” she said.
“So, they are also getting stung both ends – they are paying top dollar on another house at the other end plus they’re losing money on their house having to resell it for what the market is dictating it, which is a lot less than what the developers were paying.”
But rather than being forced to sell, it usually just means the homeowner also has to default on their next purchase, she said. “It becomes a chain of everyone defaulting. Nobody is forced unless it’s a mortgagee sale.”
But Bullock said anyone putting their house on the market at the moment had to be serious about price, stressing that it was an “absolute buyers’ market” at the moment.
EasyStreet Mortgages mortgage broker Gareth Veale said homeowners who have been stung due to the buyer defaulting could be hit with a huge cost not just because the property will have dropped in value since the start of the year, but also because of the additional interest costs of covering two mortgages.
“The market has shifted so much that to then sell in this market, the deposit won’t cover the shortfall let alone the extra interest costs in having to pay more mortgage than you need to,” he said.
EasyStreet Mortgages mortgage broker Gareth Veale said mortgagee sales are few and far between despite the market shift. Photo / Supplied
Veale said there is a difference between banks telling the owner to sell and a forcing a mortgagee sale.
“When a real estate agent is saying bank says must sell, it’s not a mortgagee sale it’s really a ‘you can’t do this, unless you sell this’ situation.”
Whereas mortgagee sales are “few and far between” and banks work really hard with customers before taking that route, he said.
Lodge managing director Jeremy O’Rourke said using words such as “must sell” in the listing was a way of communicating with buyers that the vendor is serious about selling, but the vendor had to agree to the wording.
While some sellers may have a real urgency to sell right at the start of the marketing campaign because they had already found their dream home, he said others may put their property on the market but not have yet found their next property so the motivation is lower.
“There are lots of instances where people are feeling pressure to sell to move to the next house.”
However, O’Rourke said that pressure has eased a little bit in the past two months as first home buyers re-enter the market, helping the buyer chain to start moving again.
