As an owner you have to find an agent that best suits you and your needs when selling your apartment.
Finding an agent and building a relationship and setting expectations that both parties are happy with is the first and most important aspect of selling your apartment.
Once you have found an agency the rest is fairly simple. You will need to sign a listing agreement and as this is a legally binding document we suggest you get a lawyer to look over this for you. The difference with Apartment Specialists is that we don’t lock you in. You are in control.
The agent will advise you with all the details of the campaign, marketing, the current market and so on.
The final step is making sure you are kept up to date – setting these expectations and how much involvement you would like is up to you and we tailor these to suit you as an individual.
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.
What happens with you sign a sole agency agreement with an agency? Here are 3 examples from owners that we worked with who wanted to sell their apartment. Unfortunately the agencies with whom they signed just didn’t deliver at all or in a timely manner and this is due to the sole agency agreement in their contract.
Signing and selling my apartment with a sole agency agreement and what that means for me. This is important to understand as a Sole Agency agreement is legally binding. At Apartment Specialists we don’t lock you in.
It is important to understand and know your rights as an owner when selling your apartment and what it means when signing a Sole Agency Agreement.
This is because it is a legally binding document and sometimes owners don’t realise this and what implications this may have.
The most common clause in an agreement is signing with an agency and being locked into 90 days with the agency. This means if you are not happy or you feel the agent is not working for you, you can’t change until that time period is up.
We trust in that if the service is good why would you want to leave.
The choice should be yours.
In any other industry this would not be accepted, so why real estate?
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.
There are over 26,500 apartments in the Auckland CBD and fringes and around 400 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. we recommend the only time you avoid is December through to early January. If you sell during this time, it can cost you anywhere from $20,000-$50,000.
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.
This is not a definitive answer as it would be personal preference in this situation.
When putting an apartment under hotel lease you don’t have any responsibility and it becomes a hands-off investment. You don’t need to worry about vacancies, damage and so on. In terms of income the stress to make every dollar possible out of the property is lessened too.
If you are considering it, you need to ensure that you have negotiation rights, in terms of years of being locked in and income.
You need to be aware of maintenance that may be required and adding those terms and conditions into the lease agreement too.
Good day, my name’s Andrew Murray from the Apartment Specialists. Today I’m talking about Auckland apartment sales, specifically Auckland apartments and hotel leases. But on the side of – you’re not in a hotel lease and should you put your apartment in a hotel lease. Now, it’s quite a big question.
Now for me personally, my answer would be definitely, no. But that’s because my situation is different, and your situation could be completely different from mine. If your aim is to have a hands-off investment where you don’t have to worry about vacancies. You don’t have to worry about damage. You don’t have to worry about squeezing every single dollar out of that apartment in regards to income. Well, a hotel lease is something you definitely want to look at. But there are quite a few areas that you want to make sure. For one, I think the biggest reason that I would consider it, would be if I can negotiate with the lessor.
So I can negotiate with the owner, and this is obviously often the franchiser. And the reason why I say that is because you can negotiate returns, i.e. you can put it in for only a year or maybe two years or maybe three years, not being locked in for five or ten years, because if you’re locked in, if you do sell or you have to… Let’s face it. Life changes and maybe you do have to sell for some particular reason. If you have to sell it while it’s in the lease, you’re going to get a lot less than you would if it was out. You can’t sell it to owner occupiers, you can’t get the highest rent possible, that kind of thing. So that’s one key.
Another one is, that you can negotiate your income. You want to be able to get your income as close as possible to what the market rent is. Now you’re not going to be able to get market rent, but you’re going to be able to get close. If you can get very close to market rent, you’re actually doing really well. On second thought, maybe I would put my apartment in it, so then it comes down to negotiating. At the moment we don’t have enough apartments in the CBD, so hotels are looking for stock. They’re losing their customers, so they will negotiate with you, but you have to be able to. Now the larger corporations often can’t.
The next part is damage. Obviously you don’t have to pay for any damage to the unit. Only general wear and tear, and that is by far the most important. For example, if they say to you, Look, to keep the standard above hotel or the people you’re leasing it out to you need to replace the carpet. If there’s burn marks in there from previous people they’ve put in there, you shouldn’t have to pay for that, but if it’s wear and tear because that carpet has actually been pretty thin, it’s been more than ten years and starting to look pretty horrible, well you should really be replacing it. You want to be very aware of what you’re getting into. In short my answer is, yes, if you can negotiate with the lessor and get the terms you’re looking for, and it could be a great solution to your investment or to what you’re trying to achieve.
Next time I’m going to talk about looking at two different companies in the CBD. Both have a lot of apartments and leases. All of these owners are locked in, but I’m going to talk about more specifically on one that I would look at putting a lease into, and one that I definitely wouldn’t, to give you an idea. I hope that helps.
The average time period to sell an Auckland apartment and the factors affecting the period of sales.
Good day. Andrew Murray from Apartment Specialists. Today, I am going to talk about how long it takes to sell an Auckland apartment.
Now, looking at the average of our last 25 sales, I can say, on average, it took 27 days per apartment for it to go on the market and then get sold. You can say the average time to sell an Auckland apartment in the current market is a month.
Why do some apartments sell in a day and others take up to three months, sometimes four? Well, it comes down to three reasons: one being the actual property. How suitable is the property? Is it a property that’s favourable? For example, if it is not an owner-occupier property and it doesn’t get very much light, it’s going to take longer to sell.
Does the property have anything that is not going for it? For example, maybe there are a few issues in the complex and they need to be resolved. Well, that’s going to turn off a lot of buyers and make it again, difficult to sell.
Another one is access and that’s huge. Which is very different in this market than with houses. Because most of this market has tenants. If the tenants aren’t giving you access, that can make it difficult to sell again. But at the end of the day, it all generally comes down to one thing which is the owner’s situation.
If they needed to move quickly, price is the one thing that eventually holds it up. If the apartment is priced very well, it will go out of the door. If it’s priced not very well, it will last a long time. If the apartment is priced very well, it would probably go in generally, about a month and if not, it can take a lot longer.
It comes down to the client’s situation. If they want a very high price for the apartment, it takes longer. Hopefully, the ideal client will give us that time to be able to try to achieve that for them. Through the whole time, you are giving them feedback and often, if it is priced too high, the market tells you that, and we give that information to the owner, and they adjust it accordingly.
To recap on this one. Basically, on average, it takes 27 days or around about a month to sell an Auckland apartment. I hope that helps. In the next podcast, I will talk about how much it costs to market an Auckland apartment.
Learn the 10 costly mistakes most Auckland apartment owners make. We’ll also tackle the ways on how you can avoid these blunders. Why under renting your apartment can cost you a lot of money? All these from this podcast!
Good day, it’s Andrew Murray from the Apartment Specialists back again. And today I’m going to be talking about, or going through the 10 mistakes Auckland apartment owners make that are costing them – that I see them making that are costing them thousands of dollars when they come to sell their apartment. So it’s a bit of a biggy. Now this is from a report I put out that I’ve had a lot of positive feedback from and I’ve had people ask me to go into more depth into each one, so what I thought I’d do is each podcast I’d go into one of these points.
So the first one I’m going to be going through is about under-renting. Now it actually has a bit of an exponential effect, it’s a lot more than you think and I think you’re going to be quite surprised with this one. Okay so I made a very bold statement in that report and I stand by that, that every $20 your apartment is under-rented, when it comes to sell, that’s reducing the perception of value by $10,000 or more. So that $20 a week is costing you 10 grand and that’s a lot of money. And I’ll go through an example and show you that.
Now a lot of owners have asked me “Well, how am I supposed to know what rent should I should be getting?” Well, the thing is, it’s not your fault; it’s who you’re employing to do it. And that’s a tough one because if you look at the market being 67% investor, so being rented out and the owners not actually, like you, you’re not actually living in your apartment, how are you supposed to know? You’re going to be in another suburb of Auckland, another part New Zealand or in a different country.
And if you’ve got one or two in a building, how are you supposed to know what the market rent is? And each building is different and then each apartment is different, and then the condition of your apartment and so on. So, it’s very, very difficult and it comes down to the property manager, where, I mean, that differ, it’s just like real estate agents, they differ so hugely in regards to the service and what they do deliver. So yeah, it is a tough one yeah, but I can help you out with regards to that. Just drop me an email to email@example.com.
One easy one would actually be able to go to www.apartmentspecialists.co.nz to the website and a) you can download the report that I’m going to talk to, if you haven’t already downloaded it, the 10 mistakes that’s costing you guys a lot of money, and also a report on how to know if you’re being looked after in the rental market and how do you know if you’re receiving the right rent for your apartment? And from there, you can figure that out.
Anyway, so I want to go through an example today using my own figures. Now it is involving maths, so don’t be shocked. So what’s I’ve done is, I’ve put them on, I’ve totted the numbers on a piece of paper, okay, sort of like, you know when you come through – not through customs, but you come through an airport and you come and see everybody and you see these guy’s holding up names? It’s going to be a little bit like that. So anyway, I’m only general figures.
Now, if you’re sitting there thinking “Well my apartment’s got a vista” or “My apartment, buyers or purchasers, I’m going to sell them to owner-occupier and get a higher price”. Well spot on, well done and you’re right. But the thing is, when you look at it, what do you think is pushing those values up for the owner-occupier? It’s very different to the housing market because this market you’ve got a majority of people looking to buy apartments who are investors and investors will push those values up and owner-occupiers will have to come up and beat them.
So it’s pushing the investors up, the owner-occupiers are going to have to come up, you see? So it’s actually working in your favour and very important. And if it’s an owner-occupier-type of apartment but you’re renting it out, well, of course you’ll want the most income possible.
Okay, so let’s say, let me just use a typical investor apartment, pretty small, valuing around about, say the market value is $300,000, okay? So two bedrooms, around about 50m2 and it’s got no car park, and the investor, so an investor who’s the typical kind of buyer, is looking for – I’m using my own numbers again, every investor’s different – so in this case it’s a 7% return, okay? So his goal is a 7% return.
Now this is a net return, what net means, it means after expenses, okay so after your body corporate and after your rates. Now people say “What’s a 7% return?” Now, that is if you take a 7% return means if an investor spends $100,000 of their money, each year, after expenses, that’s net, after expenses they want to receive 7% of their $100,000 back, so seven grand back in income. If it was 8% net return they would want $8,000 back. So you get my drift, okay?
Now, they use an equation and there are various equations that are used but they all come out with the same answer. Okay, so if you’ve got, so here we’ve got your income, which is your rent x 52 weeks. Now 52 weeks, some use 50, some use 48 and then minus your expenses, which is your body corporate and your rates, as I mentioned before, and then you divide it by the return you’re looking for in the decimal value, which is in this case 0.7 which is 7%, okay? Now, so your apartment – so for this apartment the market rent is $500 per week, so that’s what it should be receiving, okay? And if it’s not, it’s not being rented properly, okay, or there’s another reason for it.
Now, the body corporate fees $4,000, just a round figure, and your council rates are $1,500, so that’s your expenses, your outgoings. So we put that into the equation. So you have rent x 52, so 500 x 52 minus expenses, which is your 4000 for your body corporate, $1,500 for your rates, and divide it by that 0.7 which is your 7% return the purchaser is looking for. And so what that does it gives you a figure and that will come out at the value of what your apartment’s worth. So this investor is saying to you “Okay, at that rent, at market rent, to me that’s worth $292,857” and they may go to around $300,000 to purchase that apartment.
Now this is where it’s my job to make that perception as good as possible, that the rents are going to go, you know, looking at the rent trends to try and get that rent up as I can, work with the property manager, work with the tenants and that kind of thing. And that’s something I do with every apartment. Some will actually say, unless it was an emergency to sell, I’d go “Can you wait? Because I want to be able to make sure that you’re getting the best rate you can for your apartment and we can probably work with tenants and the property manager to see if we can achieve that”. Now I don’t do rentals myself, but I know who the good ones are and the ones that I prefer to work with that I can help with if you’re interested. Apart from that.
Now, so what I’m going through first of all, let’s say – I said a very bold statement in that, and I mentioned it earlier, about that every $20 costs you 10 grand. So every $20 your apartment is under-rented or not getting the rent is should be, you’re receiving, well, it’s worth to an investor’s value $10,000 or more less than it should be. Now that’s a lot of money, okay? So what I’m saying is, I’m going to say okay, let’s say your apartment has not rented for that $500, its market rent which it should be, it’s rented for $460. Okay so that’s $40 a week less than you should be getting. Now some people go “Okay, well that’s not a big deal”. Well for starters, it’s over $2,000 a year, right, which is a lot of money. But you’ll see where it really gets interesting is when it comes to the value on how an investor looks at it.
So, when you put those figures into the equation that I talked to you before, which was that 460 x 52 which came out around 23,000, minus your expenses, you come out with a completely different figure. Now wait for it – woo – $263,142. That’s almost 40 grand. Okay, so that’s just from having your apartment not receiving the rent it should be, just by $40, the perceived value by the investor has gone down by $40,000. So now you can really see the effects and why it’s so important to have the right property manager, the right people looking after you and the right advice.
So I hope this has been helpful. Next week I’m going to be talking about traders, how traders purchase property, how to make sure, how to know if there’s trader interest on your property when you’re selling, what happens in this market with traders. Now, traders are people who buy apartments off you guys, off owners and sell it at a profit. And the weird thing is, is that the majority of traders’ deals they get through real estate agents. So that means you’re paying for a fee, sell to a trader who makes it a profit. So it’s how to be aware of that, understand it in this market, and make sure it’s not you.
Anyway, so, also when looking at this, what I’ve done is, if you haven’t already downloaded this report, I highly recommend you do. I’ve had a lot of really good feedback from it and it will help you obviously with the future podcasts. So just go to www.apartmentspecialists.co.nz, put in your email and I’ll send it out to you and, yeah, hope it helps.