apartment sales Archives - Apartment Specialists

Tag: apartment sales

As an owner, you might be wondering what YOU need to do, or help with, in the process of selling your apartment. After you choose the agent that you feel will best represent you and get a good price for your apartment in the time frame you need, what else needs to be done on your part?

Surprisingly little. We do the leg work for you. From the time you sign the listing agreement to the time your apartment goes on the market and we start getting offers, we are there for every single step of the process. And, we’ll keep you up to date on each step, too.

Summary:

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.

SUMMARY:

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 a Sole Agency Agreement can mean for you.

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.

Summary:

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?

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.

SUMMARY:

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.

?find apartment actually worth

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.

SUMMARY:

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.

When to sell, when not to sell.

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.

SUMMARY:

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.

Apartment Specialists Podcast No: 77

Summary:

In this podcast, Andrew will reveal insights on apartment hotel leases. He will also give some tips to those who are willing to place their apartments under hotel leases.  The things they need to consider when they negotiate with a lessor, and how to get the terms that they are looking for.

TRANSCRIPTION:

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.

Cheers!

Apartment Specialists Podcast No: 73

Summary:

What’s the most effective method of apartment sales in Auckland CBD? This podcast answers that question and provides  insights on why it yields that result.

TRANSCRIPTION:

Good day, Andrew Murray from the Apartment Specialists? Today is a bit of a spirit of the moment podcast, because I got up this morning – today being a Saturday – and saw that there was such a different view count between apartments that have been auctioned and apartments that have been listed with a price, and I couldn’t believe it. I’ve always known this for a long time. There’s auction in the CBD appears to not be the best for vendors or sellers, but it really showed it today so I thought I’d show you that.

So let’s just look really quickly. Auckland CBD – two bedrooms and the price bracket’s the same so it’s all comparable. Now this is a leasehold property. You’re thinking of list views. 2281 views in a couple of days. Now we come back to that. An auction unit in the same price bracket – freehold – you’re thinking of more views. It’s had more time. It’s had three days more time to get views – only 374.

That may be an isolated incident. Let’s look at this one. Auction – think – you think cheap will get more views. It’s had more time – four more days – but still only half as many – 1055 views.

Let’s check another just to make sure. Two bedroom – same price bracket – 735. But that’s had another six or seven days more.

So what’s that saying? It’s saying that buyers don’t buy at auction. It’s too risky. They could miss issues. They can’t put in a due diligence clause. They can’t put in the clause saying they need their lawyer to approve that it’s not leaky. They can’t do the investigation and they can’t do the time. Banks often won’t go unconditional because of these things. Apartments and houses – they’re littered with risk and buyers like to be able to purchase on their terms, with conditions. A buyer will pay more if you’re going to have the security. And from a vendor’s point of view – so it’s not working for the buyer because the buyer could buy a leaky building without knowing about it and then there’s a huge risk.

From the sellers point of view it’s not getting the amount of viewers or viewings that they could have. Which means the price is going to be affected. Yes, some apartments work really well at auction. I’m not saying they don’t. But what I’m saying is they’re a similar price as long as your agent really knows the market and really pushes it – value – and marks it properly, is my opinion the better option here. Not to be stuck on the hammer and under pressure.

So just very quickly – just thought I’d show that. Because I thought it was as clear as day-shine. I was quite amazed really. It just shows the apartment market is so different from the housing market and that’s really affecting results on method of sale.

Anyway, hope that helps. I look forward to talking to you next week. Cheers. Bye

average period to sell an auckland apartment


Apartment Specialists Podcast No: 42

Summary:

The average time period to sell an Auckland apartment and the factors affecting the period of sales.

TRANSCRIPTION:

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.

Cheers.

 

under renting your auckland apartment costs more than you think

Apartment Specialists Podcast No: 4

Summary:

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!

TRANSCRIPTION

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 andrew@apartmentspecialists.co.nz.

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.