Strategies for selling residential properties
Given so many “for sale” properties on the market, successfully selling your property
takes more than just a listing in the properties for sale pages of the most circulating
dailies. Happenings in the estate agent sector confirm that property selling is not as
easy as it looks. According to the Estate Agent’s Council, the first year drop out range
is estimated at 50% and this demonstrates that many estate agents are not as
successful as they could be.
Property investors should only sell for three reasons which are;
1. Negative cash flows associated with distressed properties
2. Better opportunities elsewhere
3. Need to fund other commitments
Roos and Sutton (2003) state that always prepare your exit, even before you
commit to your entrance. They further argue that reselling is not something to learn
later when you have to “get out now”, but is something that must be considered at
the entry stage.
Accordingly there are five basic things that a property investor must do when exiting
1. PREPARATION FOR MARKETING
This basically means getting the property ready for the market. Understanding
the pertinent aspects of the property will help position the property in a
competitive position. The following must be considered:
1.1. Review Important Documentation
These must be from the time you purchased the property, or beyond.
Included may be old valuation reports (important for the property
performance measurement), agreement of sale, improvement
receipts. With relevant experience and working with
Knowledgeable agents, you can then collect and put aside
documents that will be of current or relevant value for marketing
purposes. Then make copies and return original to safe keeping to
avoid losing them.
1.2. Sale Package
This basically means presenting your home to the market. This
activity has a great bearing in determining the final amount
realisable from the property. Let it be as detailed as it can be.
There must not be any room for doubt in it.
As a visual society, photos of the property and it’s neighbourhood and
aerial views will enhance the potential buyer’s understanding and
appreciation of the property.
Remember to provide critical information like gross income, net
operating income, cash flow, operating costs and vacancy rates in
easy-to-understand spreadsheets. Comparisons with other properties,
but without degrading them, will help bloom your property’s merits.
1.3 Required Disclosure
As a seller you want a risk free transaction. As such disclose all
you feel the other part must know about the property. The law
also imposes a duty to disclose on the party of the seller, and
buyer as well.
2. MARKET RESEARCH, ESTABLISHMENT OF MARKETING AND PRICING
2.1 Market Research and Planning
A comprehensive market analysis must be undertaken consider the
factual information of subject property and also comparable properties.
Research on recent sales, available listings, and other dynamics in the
relevant market. The whole idea is to establish a realistic selling
plan. You must always remember that if you don’t have a plan,
then you will be in someone else’s plan – usually the successful
2.2 Market Strategy
The aim here is to identify and establish the different choices in
successfully marketing the property. Consider marketing budget, form
of listing – print and/or electronic, whether services of an estate agent
are required. Also look closely at the risk tolerance levels as this will
determine the final selling price. How quick must be the sale? What are
the external push and pull factors with regards to the property.
2.3 Pricing Strategy
The initial asking price may make or break the deal. Whilst
overpricing may kill the market’s enthusiasm. Under pricing will
make the buyer the winner at the seller’s expense.
Correct pricing as determined at stage 2.1 above will give the property
a decent market time and maximise proceeds. Sellers should always
take cognisance of the prevailing market forces. A market with strong
forces will easily catch-up with an overpriced, even if it means waiting
a bit. However in a weak market, with low demand as a result of a poor
performing economy overpricing will make the property a showroom
and eventually the seller will get much less than if it had found a buyer
within the normal market times. The buyer must always be made
to believe that he is getting more value in ‘this’ deal than elsewhere.
3. MARKETING ACTIVITIES
3.1 Announcement to Database Listings
First notice of new opportunities should always be directed to
your suitable list of buyers – which must be ever-growing all the
time. These should be people whom you have established strong
relationships with through one-on-one meetings, previous
successful dealings or regular communication that makes you
believe that such people will be you next clients.
3.2 Internet Prospect Notification
Listing your property on a number of property sites like
Propertybook.co.zw, classifieds or general sites like Deep Link will
increase market width and depth. You however need to consider the
site’s command of respect, and authority when it comes to timely
3.3 Print Media
There is a wide variety of print media commanding different profiles
of readership. Consider the ones relevant to your property and list in
them, giving as much critical and relevant information as you can, but
of cause taking cognisance of the costs which can be astronomical.
3.4 Property Brochures
These must be as powerful as ever and they have the potential to make
immediate impact. Property hunters tend to research more on
properties that seem appealing from street visits. and brochures must
give as much information as possible because of there low cost in
comparison to other forms of disseminating information.
3.5 Estate Agents
Estate Agents as property professionals tend to have better
expertise, but for a cost off-cause. Because agents do not get
their commission before the sale goes through their best interest
are usually the same as yours – a good price or a quick sale. Sadly
these two seldom go together. Thus a clear choice has to be made on what is important to you as
the seller – price or speed (Roos and Sutton, 2003).
3.6 Open House
This gives the potential buyer a real feeling. A good attendance
may push pressure on buyers and create a healthy bidding war
It is paramount to always remember that to get a good sale, the seller, plus his
agent must always monitor the pulse of the market on a daily basis so as to
analyse performance of subject property. There must always be some
feedback on the selling process. Remember that people are always looking
for a bargain and using correct wording will make yours grab attention.
Certainly you need to give the benefits why the reader should be
interested in your property and not others.
It is of paramount importance that one gets a mentor, a person of good
standing who is in the know when it comes to the property market trends,
performance and developments.