Tips for Sellers in the Chilling Property Market
So, should potential sellers put their property on the market or wait?
First of all, it depends on whether an owner needs to sell quickly. Owners who can wait should do so. It has as much to do with market conditions as it does with proven long-term investment strategies – buy, hold and repeat the process.
That said, those needing to sell to finance a recent property purchase should be reassured that the two transactions are likely to more or less even out, if completed within a similar time frame.
To make the most of this momentum, recent buyers-turned-sellers need to get to the market quickly. The same goes for owners who have to sell for other financial or personal circumstances.
Whatever the motivations behind the sale, sellers must readapt to a more conservative mindset to adapt to new market conditions. Price premiums, while not out of the question, are no longer the norm.
This can be a tough pill to swallow for homeowners who have been planning to sell since last year.
For those already in the market, a necessary price reduction must be enacted in due course. Properties lying around on real estate websites and antiquated for sale signs look tired and undesirable.
Adjusting the price early can avoid more drastic future declines if the market continues to decline. Watching a stubborn seller stubbornly pursue a deal is frustrating, but unfortunately it happens all too often.
Cooling markets make it especially important for sellers to maximize a property’s appeal. This includes showing the property, upgrades and repairs, as well as a skillful agent and the deployment of a well-resourced marketing campaign.
Buyers are often willing to look past flaws and compromise in the midst of stiff competition, but quickly become more discerning when demand drops.
Sellers with high quality assets will always see strong demand and prices that defy general market sentiment. These are typically period styles with high rarity value, in sought after suburbs.
Strong asset selection is always important, but perhaps becomes more evident as the foam in the speculative markets subsides to leave inferior real estate investments exposed.
A decades-old example that highlights the importance of sound asset selection in changing market conditions is the $405,000 purchase of a quality three-bedroom house in an inner suburb of Melbourne for a customer in 2001 – a period of strong market growth. This house was sold in 2008, during the housing crisis after the GFC, for $710,000. Thanks to a strong selection of assets, the owner received a 75% increase, or $305,000 in less than 10 years, all under difficult selling conditions.
It’s a great example of how shrewd asset selection, combined with a long-term investment strategy, trumps short-term market trends in building wealth.