February 21, 2013 by Dymphna

Selling Your Property in a Changing Market

I want to talk about some of the pitfalls and obstacles that come into play when you’re selling a property. Now, it’s important to understand that things never stay the same for very long; conditions and factors in the market are always changing. That’s just the nature of how the economy works.

The real estate market is no different. You’ve heard of “buyers’ market”, sellers’ market” and all the rest, and these terms reflect what the market is doing or how it is reacting to what may be happening in the larger economy around us. Of course, you and I can’t control the larger economy around us; but we can control what we do with regard to our properties.

Media (largely) controls market sentiment

One factor that we all hear about is the media and its impact on our viewpoints. Fortunately or unfortunately, depending upon how you look at it, the media dictates much of the market sentiment. How people regard the economy is greatly influenced by what the media says it is…

And for the most part, all they ever talk about or even look for is bad news.

Why does the media do this?

For one reason only: because bad news sells newspapers and gets higher television ratings. Once you realize this, you have an advantage in the market place because the reality is that things are not nearly as bad as the media wants you to believe they are…

In fact, for real estate investors, things are looking quite favorable!

Rising markets

Today, most real estate markets are rising in Australia, with a few minor exceptions that are bringing up the rear. There are several reasons for this, but one major factor is the falling interest rates, which are sure to drop even more before too long. The interest rate factor alone (which is basically the “price” of money), has a big effect on the real estate market because it allows you to buy more properties with cheaper dollars.

But even though the real estate market is rebounding, it’s not as simple as some might think to sell a property. This is particularly true in times when the market is changing but it’s not yet “common knowledge” due to the media’s affect on market sentiment that we just talked about. As a consequence, when market conditions do change, many buyers typically are behind the curve and so may not be in too big of a hurry to buy when there’s still uncertainty in the air.

On the market but not in the market

But no matter what kind of market exists, as a seller, you want to get the very highest price possible. That desire is also tempered by the cold, hard fact that in order to sell a property, you must find a buyer for it. If a property has been sitting on the market but is not selling, then there is a problem, isn’t there?

If your property is not attracting buyers, your property may be “on the market” but it certainly is not “in the market”, is it? If that’s the case, then you as the seller are not recognizing the kind of market that we’re in right now. Similar to what the media says, real estate marketers have called today’s market ‘a buyers’ market,’ which is true to a certain extent. But if you’re not getting buyers to your door, then whatever kind of market it is, you’re jolly well not in it, are you!

4 reasons for a property not selling

That brings me to the four possible reasons why your property may not be selling. Let’s quickly go over each and find out the likely cause of your property not attracting buyers.

  • Product–Is the property presented well? How does it compare to similar properties in the area? Are the photos attractive? Are the best attributes of your property being put out there for buyers to see? If all of these things are being done, then you know that it’s not the product that’s at fault.
  • Price–Is the property priced correctly? Markets can change quite rapidly and sellers often have higher expectations than what is realistic. Go to sales comps on real estate websites in your area to know what the price point should be. Remember, neither the agent nor the owner can dictate the selling price in today’s market; only the market can determine price in this market.
  • Agent–Is your agent focused on selling your property? Did the agent cut his commission on the sale of your property? If so, you’ve reduced his incentive to work hard to sell your property, haven’t you? If he is willing to cut his commission, how hard is he willing to work for you? Also, is your agent a closer? Does he know how to get a buyer to say yes? Is your agent rich or just getting by? You want to hire a rich agent because selling property is how that agent got rich, isn’t it? That is why hiring the right real estate agent to present your property to the market and negotiate the sales price is a major factor in selling your property and getting the right price.
  • Market– If it’s not one of the first three factors, then the last factor determining why your property isn’t selling has to be the market. Unfortunately, you can’t control the market conditions. It might be that other properties in your area haven’t sold either, as the market may be in flux, changing rapidly so buyers are not clear on values. Or, it might be a result of credit being difficult to obtain.

Whatever it may be, when such market forces are at work, it can make it harder to sell your property than you anticipated. If buyers are difficult to come by even though your property is well presented and priced competitively by an agent with a stellar sales record and reputation, then you may well be at the mercy of current market conditions and sentiment.

Create your own market

Where do you go from here to sell your property?

You are not out of options; you just have to take the initiative to create your own market in order to find a buyer for your property. You need a marketing strategy that does not necessarily depend upon the broader market conditions. One of the most effective of such strategies is to hold a public auction to sell your property.

A public auction attracts well-funded buyers to your property, creates a sense of urgency and competition amongst potential buyers, and sets a specific time and date upon which you will more than likely sell your property. I say ‘more than likely’ because in real estate auctions, 80% of properties that go through auction end up clearing!

So you will know all the very important details on how to get the best results from selling your property auction!