When selling your apartment, did you know there are more than just commission costs? We know, at Apartment Specialists, that, at the end of the day, you want to know how much you’ll be getting in your back pocket when your apartment has sold. You might be surprised to know that you may even get money back. We’ll help you to get a broader picture of what these other expenses are, understand ALL the costs when selling your apartment, so you can take them into account.
The knowledge of what costs you will incur during the process of selling is so important and it is more than just the agent’s commission.
The costs involved are more than just the commission. There are several others involved but don’t let that deter your choice to sell.
Marketing costs generally are around $600 when a property is selling for under a million and around $2300 for property over and above that price.
Lawyer’s fees can range from anywhere between $800 and $1000 for a property with no mortgage and up towards $1300 for a property with a mortgage. Where there is a sale that is more complicated for example a building that may need more due diligence due to building issues these lawyers’ fees may be upwards to $2000.
Lastly, a cost that is overseen when your property is tenanted during the decision of sale being made, your tenants may leave before settlement date leaving you with no income for several weeks. This is where you need to ensure you are prepared for this and/or bring the settlement date forward if able to.
And the good news; you may sometimes be eligible for money back. If you have covered your Body Corporate fees for the year and sell part way through the year you will receive the overpaid amount back upon settlement. Rates are the same deal and will be reimbursed if any are overpaid.
This is probably one of the first questions you ask yourself when you make the decision to sell. You want to know how long it can be until you make the sale to have the money to do what you need to do.
In this quick video, find out what the average rate is for selling freehold, leasehold, and high-end apartments.
On average freehold apartments take 30 days to sell and 3 weeks to settle. Leasehold usually takes double that time.
Planning on how long this process will take is an important aspect to consider when selling your property. We can’t say exactly but we can estimate due to averages that a freehold property takes around 30 days to sell including the campaign and then another 3 weeks to settle from there.
Leasehold properties are different, and typically take double the time to sell (around 60 days) but the same time for settlement, 3 weeks.
Bearing in mind that if your property is tenanted (Periodic) in both situations you are legally obligated to give them 42 days notice in writing if a purchaser prefers vacant possession.
What is the difference being a specialist for you, an apartment owner looking to sell? With thousands of apartments in the Auckland CBD and surrounding suburbs and at least 100-150 apartments selling every month, you need the right information so you can make the best decisions for you.
Apartment specialists looks at the value of apartments, not just in your building, but of those in the surrounding buildings as well. The apartment market moves all the time and we make sure we’re aware of it when valuing your apartment.
In this video you’ll see a real estate agent missed out on $61,000 because there were sales occurring at the time that didn’t show up on the sales statistics.
My apartment worth is found out by speaking to a specialist. At Apartment Specialists we know our market well and can give you a well-informed, educated and up to date value on your property.
There are over 26,500 apartments in the Auckland CBD and fringes and around 395 buildings which will become up to 450 in the coming years. Each month there are 100 to 150 sales of apartments.
We know this by understanding our market well. This is done by constantly keeping up to date and being in the know. It is not just about being an agent but about being a specialist in the market.
We look at apartments that are the same, these are usually in the same building and look at other buildings that are similar to help us gauge the real market value of your property. Calculating size, carparks, level and so on are all important factors to consider when valuing a property as well as record prices in the building and recent sales in both your building and other that are alike.
By being well informed, we can help you make the best decision that works for you and selling your property.
If you’re looking to sell your apartment in Auckland, although there’s no real ‘right’ time there is definitely a period you want to avoid which. If you sell during this time, it can cost you anywhere from $20,000-$50,000.
In this quick video, Andrew Murray at Apartment Specialists tells us exactly when to avoid a campaign to sell your apartment and why! Listen in to find out when the sweet spot is to get your apartment on the market. Apartment Specialists knows… that’s why we’re the specialists.
Apartments are different to houses and can be sold most times of the year, we recommend the only time you avoid is December through to early January.
Selling at the wrong time can end up costing you more than you may have anticipated. However, apartments are very different to houses and most of the year is a good time.
However, the only time to avoid would be the December, early January period – the holiday period, this is due to a lot of events happening in people’s lives, end of deadlines, holidays, family commitments and so on.
Every agreement requires consent from both parties to make it binding. With multi offers, buyers are also required to sign a form. Why are you required to do so? Watch the video to find out why. You can also download the form below.
Multi Offers: Why do you have to sign a form?
This is for you. To make sure you understand the implications of your offer and also to protect the real estate agent.
It is to make sure as a purchaser you have a clear understanding that this is your last chance to negotiate unless on the vendor’s terms.
If you were involved in a multi offer and weren’t asked to sign one of these forms the real estate agent is not doing their job.
Below is an example of what one of these forms should contain.
If you have any questions, flick me an email at email@example.com or call +6421 424 892 and I’ll be happy to answer your queries.
Good day, Andrew Murray here from the Apartment Specialists, talking about multi offers and why do have these forms you have to sign? Now, these forms have been designed for you. There’s an example below, for you to have a look at. Now, as to make sure that as a purchaser, you understand that have put your best offer forward, and you’re going to have no further chance to negotiate unless it’s on the vendor’s terms ie they chose your offer to be the one they further negotiate with because they’re not happy with parts of the contract i.e. settlement date, or maybe they still want more money.
So if you’re involved in a multi offer, and you weren’t given one of these forms to sign, that means the real estate agent you were doing business with or working with, didn’t do their job. Effectively, you could put in a complaint. So I’ll put an example in the form below, and what’s actually the contents in that form. If you have any questions, please just send me an email – firstname.lastname@example.org.
Are you buying an apartment for the purpose of maximising your lifestyle? If you are this type of buyer then you need to know the most ideal apartment suitable for you. This video explains the factors that are important to lifestyle apartment buyers.Watch it to know more details.
Buyer type number four – Lifestyle. This is where capital gain is not the focus of your purchase. It is maximising your lifestyle. Whether it be how you live it, and/or having a better life in general. For example, you are being able to travel and enjoy your life through freeing up capital. So, what I mean by this is where leasehold is an actual viable option.
Now, leasehold gets a huge amount of bash in the press and amongst other purchasers because they have been told, “Avoid leasehold.” But the thing is, leasehold does suit a certain type of purchaser.
Obviously, the purchaser who is not concerned about capital gain, but they are concerned about freeing up capital, either to spend it in other ways where they can get a better return. That is to make more money or to free up to enjoy your lifestyle so it is not tied up in a property or a business.
You can travel more and not have it all tied up and underneath their feet. For example, let us say I take my parents and pretend that they have got one home. You look at their first home they purchased for $176,000 in 1987. And now, that is worth 2.5 million dollars. Yet, if they just had that home and they stopped working. They are what is called asset rich, cash poor folks. So, they have got nothing. But yes, they have got a lot on paper.
Now they are bound to enjoy their life more and live a good lifestyle, it would be to sell that home and release the money. Go buy a leasehold property for a couple of hundred thousand dollars with a great lifestyle, understanding there is high outgoings but then there is also outgoings when you have got a home anywhere. If you release all that capital to be able to go on holidays, go on good trips, probably invest in property that is purely income based.
A good example is when you buy a small student apartment which is freehold and they can live off the rent, or help pay the expenses for the leasehold apartment. That kind of thing. So, that is the market where lifestyle depicts what you purchase. It is where you have got to be looking at leasehold and you are going to be, “Okay, what is the best lifestyle I want to live?” And look at also what leasehold actually has the lowest costs.
When I am talking about lifestyle, that narrows down to what you are looking for. The thing is, if you looked for that, you know that a couple of hundred thousand dollars in the freehold market and, I could not see my parents living in a two bedroom, 50 square metre apartment. They could not really invite their friends around for dinner. My mum would be, to be honest, embarrassed.
I mean, she is in her 60’s and that is buyer type number four and it is a small segment of market, but it is actually rare that leasehold suits. I hope that helps.
Next one, I am going to be talking about is an owner occupier. There are different types like high level, medium level, and low level.
Is your prime objective capital gain when buying an apartment? Then you might be this type of buyer. Watch this video to know what kind of an apartment you should be going after.
Buyer type number two. You are an investor and you are looking at buying an apartment. Your prime objective is capital gain.
Basically, you are looking for an apartment where you are going to be renting it out, and then selling it to an owner/occupier down the track. You are going to be buying it, obviously, you are going to get the best numbers you can. For example, rent minus expenses. But the objective is to then sell it to an emotional purchaser who will pay a lot more.
The key thing with this is actually the size. You have got to have the whole market. For example, if you bought an apartment that was 45 metered squared, and it is a two bedroom, not all the banks lend 80% on that. You are cutting out half your market. You are looking at two bedrooms above 55 square meters and you are looking at one bedroom above 40, ideally, 45 square meters and basically, the bigger the better.
The other thing is, that it needs to tick all the boxes. It needs to be livable. I do not mean livable in regards to high-end. I mean livable as in – apartments are the future. It is not going to be long until the average house in Auckland is going to be a million dollars. It is already well over $700,000 and it is going to keep on going up.
If you want to buy a house below $500,000 and you are looking at a 40 minute commute, apartments are where it is going to be. You can see it is going to happen, and it is happening now. I repeat myself that buying in this market, it is a market that is, obviously, livable and desirable. This is a market that is moving. You’ve got to quote area as size.
If you think about car parks and it is the middle of the CBD, doesn’t it have to have a car park? That is a bonus. If it is on the fringes and it has to have a car park. If it is a one bedroom, you will find it has to have a car park, unless it is at the very central. On the fringes and my pick is the two bedroom market, because you think of a couple buying their first property. It will not be a house because they will not be able to afford it. They are going to want another room for when they have the first child. And it is going to be their first property.
Think of all those people who have a house in this younger generation. What is their first investment property going to be? It is not going to be another house because it is too expensive. It is going to be an apartment. That is the market that is moving. That is the market that is going to continue to move.
Now, Let us take another story. Say my sister and she has a house. She’s got one child. As soon as they have another child, they are going to need another room.
They have a house in Ellerslie and they need to upgrade. But they have got to get quite a bit of cash. This is what we are going to do. We are going to buy a two bedroom apartment and I will get the rent, so it covers the mortgage. Hopefully, within two or three years it should get $100,000 in capital gain.You are really going to need that and use that leverage to buy your next home and sell your last home.
That is what we did. We bought an apartment in Victoria Street. It was $380,000. A one bedroom with 58 square meters and a high stud. It is a nice area and it is gonna need a lot of money in to refurbishing it. It rents for $595 per week. It is more than the mortgage payments and that is after covering the Body Corporate fee.
Since she’s purchased, she’s already made $50,000, and that was only four or five months ago. If you are going to follow that criteria, then you are looking at capital gain. You are looking at two bedrooms, with or without car parks, if it is in the city centre. It is in the fringes or in the suburbs, but it needs to have undercover car parking – it just does.
To recap, one bedrooms that are bankable. All the banks will lend on them. They need to be desirable. They need to tick all the boxes. You do not want to buy an apartment that faces south that gets no sun because in the long term, an owner/occupier will not pay as much for that.
You do not want to buy an apartment that has something wrong with it. For example, it is extremely noisy because an owner/occupier in the future will not purchase that. Remember, a desirable apartment, you may have to pay more for now. But that means it is going to go up more because it is going to be more desirable in the future.
That is buyer type number two and you are an investor. You are looking for a capital gain as your primary objective. The rent will cover most, if not a little bit more, than the cost of the outgoings.
Next, I will be talking about buyer number three, which is high risk. Cheers.
This podcast explains whether you can rely on sales of similar apartments in your building as a way to know your apartment’s worth. It will also give you an idea of why similar apartments may have different values.
Good day. Andrew Murray from the Apartment Specialists.Can you rely on the sales in your building to give you an idea of what the value of your apartment is?
The answer is, sometimes, but in many cases, no. That probably makes you think, how am I supposed to know what the value of my apartment is?
First of all, I’m going to tell you why you can’t solely rely on those sales and secondly, what you can do about it to make sure you’ve got a good idea what your apartment’s worth. I’m going to use the analogy of car yards, where they sell cars. In every city you’ve got a street where you’ve got car yards. They’re all in the same place, one after another. Would you go to one of those car yards – one where there’s about 20 of them – look at their sales in the last year and, let’s say each lots got 60 cars on it, you see those sales and you use that as your only way of finding out what the car you’re interested in is worth?
The answer is, no. The same applies with apartments. In Auckland central there’s over 24,000 apartments and that’s increasing. There’s over 450 apartment buildings in Auckland and each one, yes, is different, but for every apartment building there’s about five or six other buildings at least that are very, very similar. I’ll often see sales in one building and the other building will be very, very similar, yet one building is selling for much higher than the other. I’m really looking for buildings like this, because I know I can raise the values.
If I raise the values it means more people want to sell, you can see where obviously… That’s how I do business. Why is that? It’s because a person who previously sold in that building may have not been selling using the right methods, it may be because there was an issue surrounding the building, it may be because the sales that were sold in that building were undervalued, or units were in a terrible condition, there may have been situations around that sale which meant it had to be sold very quickly which means a lower price. So, you can’t always determine value for sales in your own complex.
What you want to know is, what other buildings compare to the building your apartment is in? What are those sales? Then the big one is, if you’ve got a specialist who specialises in apartments, they’re going to know exactly what the buttons are that determine value for your apartment. For example, if it’s an investor apartment it comes down to rent and outgoings. If it’s an unoccupied apartment, what is the emotional feel here? Are you going to get somebody who really wants to live here? Does it have a lot of light? Is it a good location? Does it have a car park? Things like that. Is it in a hotel? which means purely on return? Is it two bedroom? Is it one bedroom? Is it a studio? Is it a size? Is it bankable? Is it over 40 square metres or is it over 50 square metres because this bank [inaudible]? These kind of things.
When you’re talking to an apartment specialist, you want them to tell you why your apartment’s worth and what it is not – leading other the sales, because too many agents just look at previous sales and go, ‘It’s worth this’, and it’s not right. We’ve proved this time and time again, it’s very frustrating. There’s is a lot of trust that you’ve got to put in your agent, but you can ask them the questions to be able to tell if they really know your complex and the potential of your apartment, not what the previous sales are.
I hope that helps. It’s a bit of a grey area, so a hard one to explain. But at the end of the day, what I’m saying is, don’t just solely rely on the sales that have been in your building. Ask for more information, ask for other buildings that compare to it. I hope that helps.
One big question I often get asked is: Do owners pay fees if the agent fails to sell the apartment or the sale doesn’t push through? This podcast will answer that question.
Good day, Andrew Murray here from the Apartment Specialists. Today, I’m talking about a question I get asked quite a bit. If I don’t sell your apartment or if a real estate agent doesn’t sell your apartment, do you have to pay me or him anything?
The short answer to that is no. The reason for that is, if an apartment doesn’t sell, it’s either because you’ve decided to change your mind, which is perfectly fine. At the end of the day, it’s a big decision and in life certain things happen. Or the big one is – the agent. The apartment agent hasn’t given you the right advice, i.e. They’ve told you it’s worth X and they can’t get you that price. For it to sell, it generally comes down to price. If you’re not going to be able to achieve what you’re looking for, they have to lower the price, and you don’t want to sell at that price.
So, of course, you’ve got to take it off the market when you’re not going to sell unless it’s obviously a situation where you need to sell. In that case, it’s actually the real estate agent’s fault if it doesn’t sell, in most cases, which means why should you pay us anything?
What you do have to pay generally up-front is the advertising costs involved but if, for example this is how I deal with it, if I’ve told you your apartment is worth a band of $30,000, ie between $500,000 and $550,000, and then all of a sudden we’re dealing at values of around $450,000 I wouldn’t charge you for that marketing because it means I’ve given you the incorrect advice, and so I’ll reimburse you that money.
Generally speaking, yes you do have to pay for the advertising. The photos, the Trade Me ads, newspaper, that kind of thing. But I don’t think that should be the case.
The short answer is if you don’t sell your apartment, you do not have to pay a real estate agent anything, except for the marketing. Okay?
I hope that helps as I get that question from time to time. I look forward to next week.
In this podcast, I will be talking about apartment marketing and how you know if your apartment is being marketed correctly. This topic is relevant to international owners especially if they want to get the best value for their property.
G’day. Andrew Murray with Apartment Specialists. Today I’m going to be talking about, ‘How can you tell if your apartment is being marketed to its potential?’ This is a very good question and a really good one for international owners.
The best way to tell is, actually, to go online and on a website called Trade Me. Overseas, especially, I’ve got a whole lot of Australian owners that I work for, and in China, Russia, all over the world, England and Ireland, etcetera. How are they supposed to know what this, so called, Trade Me is? Basically, Google “Trade Me New Zealand” and go to the property section, and then look up the name of your agent and then you’re going to be able to tell how your apartment is marketed. Because, there are so many examples, when I see apartments, I just think, the owner must not have seen this.
A good way to find out if your apartment has been marketed correctly, is to go online, are there more than two or three photos? Are there at least, sort of, 16, 17 photos? Are there photos of the apartment? Have they been done professionally? And – the big one – put yourself in the buyers’ shoes. Would you buy that apartment? Do you like the ad? Is the ad drawing you in? Does it make you want to enquire about the apartment? That’s really, really important.
Every single apartment that’s been sold in New Zealand is always put on Trade Me. That is where every agent gets most of their leads from and if you’re not on Trade Me, well, that’s just ridiculous. There’s not an agent that’s not. So, you know your apartment is on it. You know that’s where most of your buyers come from and you know you’re going to be able to find your apartment on there.
Search your agent, you’ll see your listing, and just ask yourself, ‘Would I click on that listing? Would I buy it?’ That kind of thing. So, pretty easy and it’s a good way to tell. If you have any issues or you think that your apartment isn’t being marketed to its potential, tell your agent that. Tell it how you feel because it’s affecting how many enquiries you’re going to get on your apartment which is going to affect the result. I hope that helps and talk soon.