The past 3 weeks have been a whirlwind for my team and I as we’ve sold an enormous number of properties very quickly.
There’s no question that the market has exploded very quickly and it’s hard to figure out what is driving this burst of activity.
It doesn’t seem to matter whether it’s a small two-bedroom unit in Clayfield or whether it’s a monstrous acreage property in Clear Mountain, there’s a distinct increase in activity and I must say that we didn’t expect such a sudden increase.
To put things into perspective, the year of 2019 was the record year for ‘The Michael Spillane Team’ where we broke our previous record by almost 25% on our previous best ever year.
So far this year, if we include settlements that have occurred since January 1 and sales written thus far that have yet to settle, we’re already approaching 50% of the volume that we achieved last year….and we’re only 6 weeks into the year.
It’s been an extraordinary period and easily the best market conditions we’ve seen since late 2008.
How long will it last? We’re not sure but given the majority of our listings are now under contract, we can honestly tell you that there hasn’t been a better time than now to get your property on the market in a long, long time.
I’ve been asked by several people… “How much have prices increased by?”
That’s always a very hard question answer until you look back on the data with hindsight but I can tell you that the vast majority of the properties we’ve sold have been for more than the figures we’ve anticipated so we’re confident that prices are moving in a positive direction.
Stay tuned and we’ll keep you updated on where the market is at.
On another note, we’ve had a few comments recently (including one buyer at an open home last Saturday) about the properties that we list for sale.
Her comment was…
“You guys are lucky because you always seem to list the best properties for sale that are presented beautifully.”
It was a lovely comment, but the truth is that some of these properties may not have started out presented so perfectly but we work very hard to ensure that the properties are presented beautifully by the time they hit the market.
We’re not scared to make recommendations if we believe that the amount of money it will take to improve the property will justifiably increase the value by a lot more than the cost of doing the work.
I’ll give you an example of a home that has only just settled in the past fortnight…
We first appraised this home and the owner told us that she had already spoken to two other agents.
The first advised this owner that she shouldn’t do any work to the home except a tidy up of the yard and she appraised the home at a figure of $650,000.
The second agent recommended a few basic things such as a new light, pulling down some old blinds, a high-pressure clean of the home (and surrounding concrete and driveway) and a few basic items that required repair by a handyman. This agent appraised the home for $670,000 provided all this work was carried out.
Our seller did initially ask us what figure we believe we could have achieved if she did no work to the home whatsoever and we believed we could have achieved a figure of around $680,000 on an “as is” basis.
Given the owner was very keen to maximise her sale price, we recommended an external clean, a full internal paint, new carpets, a basic cosmetic improvement of the kitchen including new paint on the bench top and cupboards, a new light fitting, some basic landscaping and a few items to be addressed by a handyman. We believed that the owner would achieve around $730,000 should all these items be addressed.
The owner selected us to list the property and we were quite ‘hands on’ in helping select appropriate colours and textures etc.
The full cost of the work amounted to approximately $30,000 and took approximately 4 weeks to complete.
We believed the home would appeal to a wider variety of buyers once the work was done and as such, it would have been able to compete with homes that were newer or perhaps a little larger.
The result – we sold the home in less than one week for a figure of $745,000.
We believe that the $30,000 investment made her $65,000 more (or an extra $35,000 profit) which is quite a substantial amount for 4 weeks of inconvenience.
Whilst some owners may not have the budget to spend $30,000 on renovations or cosmetic improvements, there are ways that an owner can enhance their property’s appeal without spending such a large amount of money….but even small improvements in the order of hundreds of dollars can result in several thousands of dollars more.
Only yesterday, we appraised a home that has been on the market for almost 6 weeks with another agent.
Initially, the agent told these owners that he believed he could achieve a figure of $930,000….and recommended that the owners didn’t have anything to do – just put the property on the market as is.
After a failed auction campaign, the highest offer the agent has achieved thus far is $666,000….that’s not a typo – a whopping $264,000 below what the agent initially believed the home was worth.
Now this home is located a lovely street in what’s considered to be a very tightly held area…and there’s plenty of recent sales around to suggest that $930,000 must be reasonably close to the mark – certainly an offer of $666,000 is an insult.
What fascinated us was that there were clearly a few very simple mistakes the sellers had made with the way they presented the home…things that could have been fixed for no more than a couple of thousand dollars.
The other surprising element to this property is that the agent informed the owners that their likely buyer was a retired couple…a pretty silly analysis given the home is two-storey, provides a dual living option and offers significant space to entertain many.
I would have thought that the last demographic of buyer that would have been interested in this home would have been retirees so in my opinion, the agent couldn’t have been further from the mark.
As such, the owners have burned 6 weeks, $4000 in marketing costs and now really need to go back to the drawing board…and list their home with an agent that will offer them some better advice.
So whilst my blog today might seem like it’s in two parts, the summary would be that despite the best market conditions we’ve seen (when you’re selling) for some time now, poor advice, ill-considered strategies and mistakes in presentation won’t necessarily result in you selling for top dollar.
Make sure you get the right advice…and in this market, you could do very well when you sell your property.
Until next week…Happy Listing and Happy Selling.