Money

Pricing the key for sellers

Paul Clitheroe.
Paul Clitheroe.

WE'RE heading into spring - the peak season for buying and selling homes, and the latest price figures suggest that at present, buyers hold the trump card. Prices are flat or falling, and in this sort of environment, it's critical for vendors to set a realistic asking price.

According to research group RP Data, on average, property values across Australia's capital cities dropped by 0.6% in July. There were a few exceptions - prices were stable in Sydney (up just 0.1%), Darwin rose 0.6% and Canberra prices bucked the national trend climbing 1.9%.

Melbourne however has the unenviable distinction of recording the greatest property price falls of any state capital, down 1.4% for July.

Over the first seven months of the year, prices fell by a total of 3.4% nationally. Some market segments fared better than others. Prestige suburbs were worst hit, with prices dropping 6.2% to the end of July. Mid-price suburbs fell by 2.3% over the period, and cheaper locations came off comparatively lightly, with price falls averaging 2.1%.

Clearly it's a tough market for vendors. And it's not just that prices are falling - it's also taking longer to find a buyer. The average time taken to sell a home is currently around 55 days compared to 45 days at this time last year.

If you're selling at auction be especially careful when you set the reserve price. Auction clearance rates nationwide are about 50% at present, and having an inflated reserve is a very likely way to see your home passed in.

If you're selling by private treaty, be prepared to negotiate. It's a bitter pill to swallow, but according to RP Data, buyers are asking for, and getting, an average price discount of 7.2% right now.

Part of the challenge in setting an achievable price is that we tend to think our property is worth more than anyone else does. That's because our homes are special to us. However when you're selling, try not to let your sentiments inflate your expectations of what your home will sell for. If a climate of falling prices it can be better to secure a prompt sale rather than hold out for more money only to find market values have dropped further.

Hiring a real estate with strong local experience and proven sales record can make lots of sense in this market, and minimise the period during which your home is for sale.

Ask a number of agents for a market appraisal, in particular approach the agents who are actually making sales. Sold signs and doing some homework on the internet will indicate their strike rate. Appraisals are free and agents should be more than willing to provide them.

Don't automatically go with the agent giving your home the highest price appraisal. Some agents may deliberately inflate appraisals to win listings. Compare the values you've been told with prices being asked for comparable houses or units listed for sale, and most importantly compare the appraisals against the selling prices that comparable homes in the area have actually achieved.

Where possible, negotiate on key costs associated with the sale of your home including the agent's commission. It means more money will go towards the purchase of your next home.

Paul Clitheroe is a founding director of financial planning firm ipac, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money magazine. Visit www.paulsmoney.com.au for more information.

Topics:  opinion, paul clitheroe, property


Stay Connected

Update your news preferences and get the latest news delivered to your inbox.

$4 million announced for Ballina airport expansion

North Coast Nationals MLC Ben Franklin and Minister for Regional Development John Barilaro announced the funding at Ballina Byron Gateway Airport this morning.

Airport among 10 projects to receive vital infrastructure upgrades

New Ballina chamber board looks to the future

The full Ballina Chamber of Commerce board at the Ballina Coast & Hinterland Northern Star Business Excellence Awards in 2015.

A new board have been elected for the Ballina Chamber of Commerce

Bring home the bacon at Northern Rivers festival

PIGS WILL FLY: A giant pig was joined by Alstonville Lions Club’s Les Wiles and Summerland Credit Union’s Belindar Cordery and others to promote this Sunday’s Alstonville Family Festival.

Get piggy at the Alstonville Family Festival

Latest deals and offers

GAME FOR ZANE: Under-18s to honour fallen clubmate

“IT IS one of the most important days for our club. Zane died on the field doing what he loved for the club he loved."

$4 million announced for Ballina airport expansion

North Coast Nationals MLC Ben Franklin and Minister for Regional Development John Barilaro announced the funding at Ballina Byron Gateway Airport this morning.

Airport among 10 projects to receive vital infrastructure upgrades

New Ballina chamber board looks to the future

The full Ballina Chamber of Commerce board at the Ballina Coast & Hinterland Northern Star Business Excellence Awards in 2015.

A new board have been elected for the Ballina Chamber of Commerce

Bring home the bacon at Northern Rivers festival

PIGS WILL FLY: A giant pig was joined by Alstonville Lions Club’s Les Wiles and Summerland Credit Union’s Belindar Cordery and others to promote this Sunday’s Alstonville Family Festival.

Get piggy at the Alstonville Family Festival

Welcome to Northern Rivers’ first golf course of its kind

IT’S OPEN: The Ballina Disc Golf Course at Bicentennial Gardens was officially opened last week by US-born disc golf player Jesse Amos, who pushed for the course, and Ballina Shire councillor Jeff Johnson.

Reports of at least one hole-in-one already

Who wants to be an engineer?

Sparks flly as the laser cutter slices through a 3/4 in sheet of steel at Adnought Sheet metal Fabrications. Photo: Chris Ison / The Morning Bulletin

Calling young people who have thought about an engineering career

The best retro movies of the week? May 27 - June 3

Gregory Peck Photo Contributed

This week TV fan get to see Tom Cruise in a 1980s classics

Perfect time to invest in Northern Rivers property

The Northern Rivers rental market is tighter than Sydney making it the perfect time for investors to get better returns out of property than superannuation or banks deposits.

Low interest rates and tight rental market are prime time to invest