While there is a general misconception that selling property is much easier than negotiating a purchase, the same degree of attention should be given to both processes. To obtain the best price and ensure the sale goes as smoothly as possible you need to be organised, have a strategy and make things as simple as possible for the buyer.
John Howard, otherwise known as “The Property Expert”, has written a book entitled “Property Investment and Development for Newcomers” which covers everything you need to know about investment in property.
Putting together a sales pack
It is important that you put together a sales pack which is informative and gives potential buyers everything they need to know. Speak to your solicitor/conveyancer to create a full legal sales pack which can be sent to the solicitor/conveyancer of the party you are selling to. John Howard has some great advice on making your sales pack as attractive as possible:-
• Add an up-to-date local search to save any delays further down the line
• Include questions you asked when buying the property, they may still be relevant
• Enclose all of the relevant certificates and guarantees regarding the property
• Add any questions you would ask in the buyer’s position
While it is helpful to get the sales pack together and available as soon as possible, do not cut corners. As John says, it may seem a little strange to be upfront and honest when selling your property but think of it this way. The information you’ve included is all relevant and will likely arise further down the line. Adding it to the sales pack speeds up the process; avoids any confusion and could ultimately save you from reducing the price further down the line.
Preparing your property for sale
In this chapter John Howard assumes that you are acquiring property which requires a degree of redevelopment, ready to be resold. So, while your solicitor is doing the legal paperwork you can ensure that the property is fit for sale:-
• Visit the property with your builder to list any snags
• Ensure part payment is withheld from the builder until the snagging list is rectified
• Arrange a professional builder’s clean, not by the builder!
John Howard describes this subject perfectly:-
“The property needs to look better than any other property on the market at a similar price, because that’s how you’re going to sell it before the others sell.”
Choosing an agent and valuing your property
Choosing an agent and valuing your property are obviously extremely important but there is “honour amongst dealers/agents” that were possible you should sell the property through the agent from whom you bought it. When you think about it, this makes perfect sense:-
• They already know the property
• You likely approached them for advice on redevelopment and an enhanced valuation
• Potential buyers from the previous sale may still be interested
Building up a rapport with your agent is vital as not only will it enhance the selling process but you can also be honest with each other. We all know that estate agents tend to be optimistic when valuing property so that you will choose them and they can start marketing your home as soon as possible. Slowly but surely, many agents will start to talk down the price once they have secured your property for their books. However, this is not the way that property investors work!
Take advice off more than one agent, tell them that you want to sell within six weeks and when they start discussing fees do not try to cut them to the bone. Why? Simple, you need to incentivise our agent to sell the property, there needs to be something in it for them. Put it this way, if they have two properties for sale, one with a commission of 2% and yours with a commission of 1%, which one will they spend most time marketing?
Pricing your property to sell
We will start this section by quoting John Howard who has a rather interesting sales strategy:-
“Any property has its biggest impact on the market within the first two or three weeks of being put up for sale. If it’s overpriced and you don’t get the response you want, which you won’t, you will have lost all impact by the time you reduce it to what it should have been.”
You will learn on John’s one-day seminars that pricing your property to sell is very important – especially when you have one eye on your next deal. Get in, redevelop and get out!
Receiving offers and choosing a buyer
As John says, everyone knows that the first price a buyer offers is just a starting price. So, in order to avoid wasting time, when you receive an offer, ask your agent to find out how high the buyer will go. This is the real base price; this is your starting point for negotiations and cuts out so much of the to-ing and fro-ing which can clog up the early communications.
Some simple tips when receiving offers:-
• Be courteous regarding all offers
• Never accept the first offer
• Respond to any offers as soon as possible
• Inject a degree of competition where there are numerous potential buyers
There will be occasions where you have more than one potential buyer. In this scenario it can be useful to get the agents to ask their clients to submit their best offer on a certain date by a certain time. This introduces a degree of urgency and there is nothing better to focus the mind than to think you may miss out on your target property. This little tactic can be a game changer!
Completing the process
John Howard book is also very informative when it comes to actually closing the sale of your property. He looks at additional subjects in great detail such as:-
• Choosing a buyer – not always those offering the highest price!
• Negotiating the best price – prepare to negotiate
• Progressing the sale – 25% of buyers do not proceed to completion, avoid this
• Overcoming problems – how to stay calm at the business end
• How to respond to price reduction requests – be ready!
• Closing the sale
You will come across occasions where your property does not sell and you need to take a step back, re-evaluate the situation and start again. John Howard’s advice is simple:-
“There is no point in kidding yourself about the price. It doesn’t matter in the end what you think it’s worth, or what the agent thinks it’s worth, the only thing that matters is the person who will make an offer on it”
For further information about John Howard’s expert guide to property investment/redevelopment click here.