Selling an Auckland apartment under a lease or hotel lease is relatively worthless, but there are situations when you really need to sell your apartment. In this podcast, Andrew Murray will show you the steps that you need to take when you plan to sell an apartment that is still in a lease. Get all the facts and more from this podcast.
TRANSCRIPTION:
Good day, Andrew Murray from Apartment Specialists. Today we’re talking about Auckland apartment sales and specifically, what happens if you can’t get your Auckland apartment out of its lease or its hotel lease. How do you sell it? We all know if an apartment is in a hotel lease, it’s worthless. But let’s face it, there are situations where you have to sell your apartment. If you have to sell it, well, because it’s in a lease and you can’t get it out, you can’t change that, so what do you do? The problem is, apartments are worth less when you sell them in a lease compared to when you’re out.
The reason why is, you can’t sell it to an owner-occupier, so that’s an emotional purchase, so, a person can fall in love with the apartment and pay more. Or, when it’s in a lease and then in every case I’ve come across, you receive less income than you are if you were renting it to a student, a family, or a professional, so it’s worth less again. So, if you have to sell your apartment and it is in a lease, there’s a way you can do it to get as close as you can to that value of what it would be worth if it was out of the lease. And you’re selling it as a long term investment. What you’re doing is, you’re selling it at the lowest return possible.
Whatever the mortgage rate is at the time, you’re selling it at that basically or less. So basically the new purchaser will just be having that as a.., but knowing in the long term there will be a little bit of capital gain when it comes out. So you’re raising that bar as much as you can. You have to realise if you are an owner, sorry, you need to do your very best to get it out of that lease, and if you can’t, you’re going to have to accept it that your apartment is worth less, and it’s minimising that loss as much as you can. So you can upsell it, and you can get very close, but unfortunately there’s not much you can do to get the true value unless you can get it out.
I can talk with anybody specifically on their apartment if they’re in that situation, on how you can get as close as you can possible, or how there are different ways you can get out of leases. Sometimes there’s some technicalities, that means you can get out. I’m happy to read through your original apartment lease for you if needed. I hope that gives you a bit of an idea, and I look forward to talking to you next week.
The best way to tell if your apartment is being marketed well is by initially going on to Trade Me.
Check out how many photos are on your advertisement, there needs to be at least 10 top quality photos. These need to be done professionally and you will be able to tell this by comparing them to others on the website.
Then assess whether or not you are drawn into the ad or not – put yourself in the buyer’s shoes.
Trade Me is where all properties are sold in New Zealand and every agent uses the website.
TRANSCRIPTION:
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.
Your goal is to get the best price possible when selling your apartment. You want to look at recent record prices and then set a price goal. You then need to ensure your listing price is slightly higher than your goal as a buyer is not going to usually offer that price. There will be an element of negotiation from the price being offered and the price accepted, allowing for this will mean you end up with your intended result.
TRANSCRIPTION:
Andrew Murray, Apartment Specialists. Today I’m talking about how to figure out how much you should list your Auckland apartment for.
We will backtrack a bit. You are selling your Auckland apartment. The record price for an apartment which is exactly the same as yours or very similar is $300,000. And you want to get as much as you can. So you want to beat that $300,000. That’s your goal.
So how much should you list it for? Now this is where you put yourself in the buyer’s shoes. So I’ve got owners that go “oh we’ll list it at 305”. Now that’s too close to what your goal price is. You want it to be a bit further away. For example, think of a buyer. A buyer wants to get it for the lowest price possible. That’s what buyers do. So they are going to come in and they are not going to offer a listing price. They are going to come in lower. So you’ve got to leave a bit of fat in. And this is where negotiation comes into which is what I really enjoy.
So generally you will add on maybe 20 to 30 thousand dollars, because you know – lets say you list at 300 and the owner is going to come in at, maybe sort of, 290. I’ll try to negotiate as close as I can to 330. Or sometimes you get lucky and a person will come at 310 already and then you can negotiate with them even higher.
So that is how you want to look at it from an owner’s point of view. You want to know that “okay, what are you listing the price for? Or the apartment for?”. It needs to be a little bit above what your goal price is because you need to have that bit of room for negotiation.
What I’m going to talk about next is traders. Now what a trader is, that’s somebody who buys a property off a real estate agent or off an owner privately and then resells it for profit. Now as a rule – we have a company rule where we don’t sell to traders. But I have lots of traders who bring me properties to sell for them. This is where it gets really interesting because this cuts – what this will do is help you cut through all of the real estate hype, as in what is the most effective way to market your property and this is how we market our properties.
So what do the traders do to get the highest price? How do they get the highest price? How they’re getting higher prices than agents? What marketing are they doing and what marketing aren’t they doing? I’ll go through that next time.
There is a difference between selling apartments and houses. Selling apartments is a very specialised market and often the buyers are a different group of people to those who are looking for a house.
At Apartment Specialists it’s all we do, we only do apartments and we are focused on putting you in control. There are other agencies who predominantly do apartments too; make sure you do your research and go with what suits you and your circumstances better.
TRANSCRIPTION:
Andrew Murray from Apartment Specialists. Who specialises in selling apartments?
Now just like if – which happens quite often, I have people come up and ask me:
“Can I sell a house?” I will say, “No.” They will go, “Why not? You did a great job with me, with my apartment.” I go, “Well I can sell your house. But I know I am not the best man for the job and the reason is, I do not specialise in houses”.
My market is apartments, which is a very specialised market. It is very unique. You’ve got a unit titles act. You’ve got a lot of different types of buyers. There is a lot of different ways you can add value which is very different to the housing market. I’m not confident in doing houses because I know there is somebody out there who can probably do it better.
Now that is not in case with apartments, then obviously that is what I do. Now I hope if somebody had an apartment and they went to a housing agent. And you know the majority of the business is houses – they said to them – “Would you like to sell my apartment?” That they would say – “No, I’m not the best agent for the job.” In an ideal world, that is what should happen. But unfortunately that does not happen. Most agents sell whatever they can, as that is the nature of the business.
Now to help you look for or find the best agent or agency for you, besides obviously listening to myself, from Apartment Specialists. There is also a few other agencies that do apartments or the majority of what they sell is apartments. Now you have got – the only two agencies which only do apartments – The Apartment Specialists and City Sales and you have also got Ray White. Their office down on Lorne Street, and Britomart. And then you have got Barfoots. Now they do a lot of the mortgagee sales. And you have got Baileys down on the waterfront. They do a lot of leasehold stuff. I’ve got a few agents who do some character stuff. And you’ve got Property Asia. The name says it all. And that is pretty much it. You’ve got other ones which dabble here and there but those are the main offices that have agents which – the majority of what they sell are apartments. That is where you will find the true apartment specialists. And there are those particular branches which are in the CBD.
So have a look around. Find out which agent or agency is best for you. Always make sure when you are going with an apartment or house you are going with somebody who specializes in: a. In your apartment and b. In your area. I hope that helps.
Next week, I am going to be talking about how to choose the right Auckland real estate agent for you.
Auckland apartment valuation is done using different methods like actual comparison of purchase price or meterage. It all depends on the valuers. However, this podcast will help you look into your apartment and show you how you can increase its value.
TRANSCRIPTION:
Andrew Murray, Apartment Specialists. How is an apartment valued?
Now, an apartments’ size does matter more than houses. More than anything else. And the reason why is the value of an apartment is all brought down to the value per square metre. For example, if you purchase an apartment for $400,000 and it is 100 square metres, well then the value of the apartment per square metre is 4,000 – per square metre.
What a valuer does is they come in, they talk about the market. A lot of this is copy-and-paste stuff. But really it comes down to the sales they use. And the valuer decides what sales to use. So there is a big grey area here. There is a lot of discussion that can be around – on the equity, on valuations – because the valuer can choose high sales in the building or low sales to compare. And they find values to support the value for something sold for. But anyway, stop worrying about it.
So, how it is done is for example here, this is a property in a character building and so what I have used to compare similar buildings in sales in buildings and taking every single one down to a square meterage. Say 24 Anzac Avenue, it is a three bedroom brought down to $3,496 per square meter because it is 163 square meters and it was sold for $570,000. Okay, one in the Metropolis. Okay, $540,000, 85 square meters. Divide 540 by 85, it gives you $6,353. And so, it is all about the sales price divided by the square meterage and it gives you the value.
You can see here they also use one in the building which generally is most reliant because they are much more comparable. So, for example 1C $220,000 which has 43 square meters divide 220 by 43 and it gives you $5,116 square meters.
Anyway they look at all of that giving more weight in general to apartments being sold in the building and you have evaluation. A hundred square meters and $5,200 when it costs $520,000. Now, the actual purchase price of that apartment is very similar to that and that is what most valuers will do. They will come up with evaluation very similar to the purchase price because that is what the market has shown. And they use the sales through square meterage to show us. Now, what is a very interesting question is, different valuers can show completely different values and neither is wrong.
So, it is a very interesting process. But I hope that gives you a bit of an insight to how apartments are valued. And then it will help you look at your own apartment. Or help you when you look at the value of other apartments – that compare one sale for or another sale for. And at the same or similar kind of apartment – and take it down with a square meterage. I hope that helps.
Next week I am going to be talking about– the question I am always asked, “When should I sell my apartment? How do I know?” And back to apartment sales.
Third on the series of questions of owners on “How Do I Sell My Apartments?” – aside from professional photography and putting the apartment in the best light possible, you’ve got to use feature ad. How important is it and How to Use a Feature Ad to Sell Your Auckland Apartment is a matter that we will dwell on thoroughly in this podcast.
TRANSCRIPTION:
Hi I’m Andrew Murray, Apartment Specialists. The third part and the question I get asked all the time is “How do I sell my apartment?” Online presence, as I say it each time, is so important to sell your Auckland apartment. So, A. You’ve got to have professional photography; B. The professional photography has to be putting the apartment in the best light; and C. You got to have a feature ad. Now what I mean by that is you pay another $69 on Trade Me. And now that is virtually nothing. And it means that when your apartment is searched for – after those first couple of weeks when it is further down to list – it comes up a lot higher. So it is an absolute must.
It is kind of like – if you don’t have a feature ad – your apartment is going straight to video. As in it is not in the cinemas. No one really knows about it. And the common saying in real estate is that you can’t sell a secret. So I will go straight to the point. What I’ve done is, I have actually got two apartments here that are in the same building. Very similar but one is slightly superior to the other. The slightly superior one is already under contract and it’s gone unconditional – I just put it up on Trade Me just purely to show this. And you will see what I mean.
So we’ve got the first one. It is bigger than most. And you can see both. If you look through – both professional photography, both the same complexes – but one is a feature and one is not. So let’s go back to the first one. The photos look great. Now this is a tenanted apartment which you’re seeing. We did a lot of work with the tenants and they let us come in. Look around their things. All that kind of thing in order to stage the apartment, it came up great. I won’t go through all the photos and bore you. Anyway, let’s go to the other one. They were basically put up right after each other so exactly the same time, yesterday morning. Let me look at this one. You see this is a superior one, looking fantastic. This one has got a view.
I prefer this one to the other one. Now, this is the one that is actually already sold. Look at it. Let’s look at the views on them both. First one, 374 views. Still very good probably because of the presentation of the photos and it looks really good. Now, second one, 1122. That just says it all. If Trade Me charge $600 to make a feature ad, I would still recommend it purely on those numbers as it’s huge. Thank you for listening to this.
Now I hope you understand how important your online presence is. There’s a lot more factors that go into it, but these are the basic three things. Professional photography of the Auckland apartment in its best light, and it being a feature ad. Thank you.
Staging is an important part of your marketing campaign. Having stagers come in to your property prior to photos will ensure your apartment looks at its best for the photos that go online.
We understand that often you are selling a property that may be tenanted and with it not being their own place the furnishings often don’t fit certain areas or the aesthetically it may need freshening up.
We offer this as a free service and come in and clean, tidy and present it to a high standard. For further information, contact Apartment Specialists and we will be happy to help.
TRANSCRIPTION:
Andrew Murray, Apartment Specialists. “How do I sell my apartment?” The question I get asked most often.
Now, it is all about having your apartment looking its absolute best online. So that is about using professional photography. And what I’m taking about today is not about you just paying for professional photography – it is having your Auckland apartment looking in its best light before the photographer gets there because otherwise it is a waste of time.
So, looking at the list of things that I’ve just come up in the last two days – rather than comparing my own and all that kind of thing – I wanted to look at two apartments that are very similar and can actually be really compared. So again here, you’ve got one in Harvard and one in Zest. They are investor apartments. They are the ones that a lot of people have difficulty with with tenants.
And now that is not an excuse. You can create a relationship with a tenant. And you will see that, as in regards to the results of professional photography. So both have used professional photography here.
Freehold, two bedrooms, the apartment in Harvard. Eleven photos. Two bedrooms, one bathroom. Two bedrooms, one bathroom. Both exactly the same size. Very similar. Both listed at exactly the same time. So you’ve got here, Freehold, two bedroom apartment, and the photography- it’s professional photography. I mean, the appearance could look better but it doesn’t look bad. It’s showing the apartment in good light. And how many views has it got? 396.
Now, we then look at Zest which is very similar. Professional photography as you can see by the wide angle lens. But the presentation is shocking to be honest. I mean, if you were an owner, would you want your apartment to look like that? If you are a buyer, what are you thinking? And this is an example where it just doesn’t create the same amount of enquiries.
So, it is about creating relationships with the tenants. It is coming in and lightly staging with them – and actually talking with them – and that’s a whole conversation in another process. But it is the result that counts. So professional photography is a must. But you are wasting your money if you are taking professional photography of something that does not look good.
So, I guess that is the point that I want to get through today. And you had probably see in the views 286. So from 286 to – how many were there before? Very quickly, my apologies. So, probably about 30% more views. So that’s 30% more buyers looking at your apartment.
Thank you for that, I will be now commenting on the third part of this question, Is it a feature or not a feature?
When selling your Auckland apartment it takes professional looking photos and a little staging to add glitz and glamour to your property. Many apartment owners consider this to be an optional add-on but more and more buyers are making decisions based on what they see online. Many buyers in this market have to do their research online as they don’t live in Auckland. Others would rather gather information online than waste their time driving around and travelling long distances to look for apartments. That’s why it has become a necessity in the Auckland apartment sales market to include quality photos in your online marketing. This will provide buyers with a valuable image of the apartment you are selling.
Why You Need to Market Your Apartment with Quality Photos
There are often many apartments being sold in one building at one time. You need to make sure your apartment presents well and stands out from the rest. A recent successful example of this is:
In one particular building the apartment listed to the right of the one we sold was listed for $250,000 (and it is actually a better unit). It has been listed since April 2013 and at the time of writing this guide it still hasn’t sold. We sold our client’s in under two weeks for $265,000 purely because we made the apartment look it’s very best.
What’s the first thought that comes to mind when marketing your Auckland apartment? Isn’t it that you want to get the highest price for it? What if it’s a rushed sale? Do you have to lower your apartment’s value simply to sell within a given timeframe?
Unless you have to sell your Auckland apartment within days you should always aim for the highest price. However, before asking for this, you have to attract many buyers and hold their interest. You have to excite international buyers via your online photos and you have to make local buyers want to get in their cars and view your apartment. Moreover, when it comes to rushed sales, you don’t have to lower your property’s value simply to sell it off. You need to aim for the highest price and promote your apartment through quality photos. This is what Apartment Specialists is about to show you how to do….
Below is a comparison of a living room in an apartment that we recently sold. These are before and after photos of the same room. The first photo shows you what the room looked like when we arrived. The second shows you what a little bit of staging can achieve.
Which room attracts you more?
A Guide to Flattering and Seductive Apartment Photos
Watch this short video before you start reading our guide as it will provide you with some great examples of the good and the bad.
You now know that photographs can be powerful bait when attracting the interests of buyers and property investors. We have come up with a simple yet powerful guide to help not only Auckland apartment owners but other agents in the Auckland apartment sales market. Use this guide yourself or ask your agent to follow it. You can do the staging yourself or hire a professional photographer.
Pre Photoshoot Preparation
Take Time to Build Relationships with Tenants
This is not related to photography but this is an important step when staging an apartment. Most Auckland apartment owners do not live in their apartment. Their apartment is often under a rental agreement. If a tenant lives in the apartment that you are about to sell and they do not cooperate, the thing is, you won’t get those professional looking photos that you want. They might not even allow you to take any until their lease expires. That’s why it’s important to build a relationship with them. You can then simply talk to them ahead of time, tell them that you want to take photos on this certain date, and if it’s okay, you will move their stuff around and then put everything back.
Staging Kit
It’s important that you prepare a staging kit or props beforehand. I’ll be honest and say that some tenants do not have classic and sophisticated tastes when it comes to furniture and accessories. So it is handy to arrive with duvets, throws, pillows, bed sheets – anything that would likely improve the appearance of a room or a view.
Photoshoot Checklist
Exterior Shots
When doing exterior shots remember to get photographs of the following:
Façade of the apartment building Exterior amenities (i.e. gardens and parking areas) View from inside looking out If there is a coutyard or deck, get photo of these areas View of the street from apartment looking down
Interior Shots
Shots of whole room areas including:
Master bedroom Kitchen Dining area Living area Bathroom
Improve on your Auckland Apartment Sales with these Photoshoot Tips
Use Lights to Brighten the Area
When taking exterior photos, make sure you do it in the middle of the day when the sun is up and the sky is blue. The sun’s rays make the view more stunning. If taking interior photos, make sure that all lights are turned on and you use a flash. This will fill in any shadows and even the colours of the images. If you have contrasting colours in the background it makes the colours stand out.
The More Photos the Better
All buyers love to see more than just the façade of an apartment building, the more photos of the apartment the better. This includes all rooms and the interior and exterior views. If the apartment has a spectacular view of the sea, a park, etc then add them as well. They add value and excitement to buyers.
Move Things Around
When taking shots, always remove the clutter like dishes, clothes and all stuff that is not furniture or appliances. Remodel and move furniture and appliances in order to stage the rooms properly. This will make the rooms look larger and attractive.
Remember to Go Pro
If you are hiring a real estate agent or agency to market your Auckland apartment, ask for samples of photographs of apartments that they have sold. Now that you know that they have a huge impact on the value of your apartment you need to see what they can do. If you decide to go pro then there may be an additional cost but this will definitely be well worth the investment.
We would love to hear your feedback on our guide and see your before and after photos. If someone you know is selling their Auckland apartment then email them this guide or even better share it on Facebook.
In this podcast, I discussed about the myth of the sole agency and the reason why you need to get out of it.
TRANSCRIPTION:
Andrew Murray, Apartment Specialist, the Auckland apartment market. Today, I’m going to be talking about the myth of the sole agency. The fact that, you can’t get out of it. The thing is, you can.
I often get called by this guy, “Andrew, I’d like you to represent me. You’ve been recommended by Joe Blogg because the agent that I’m with at the moment is just not working for me”. For number of reasons, it could be promises they haven’t kept. Or it could be that they’re just not getting along.
Now, real estate is an interesting industry. And the Auckland apartment market’s where you can’t try before you buy. The agent promises the world – and if they don’t deliver – you’re stuck with them for 90 days. The same thing is this: if you’ve got a vendor that has to sell on a certain time frame for various reasons – generally because of financial commitments – and it means they have to go through an agent they don’t want to go through or they don’t feel are doing the best job for them. And often, this leads to accepting offers that they didn’t want to accept.
The key thing here is to remember as the vendor, you are in control. Make sure you are always in control because the problem with the real estate industry – especially in apartment market from my opinion is – the vendor loses control when they sign that sole agency and they need to get that control back. They need to better dictate the terms. They need to be able to hold the agent accountable.
So when you find the agent who you want to represent you, ask to have a clause added in the agreement saying you can terminate that agreement if you feel they’re not representing you or they’re not delivering what they promised. So it’s their business loss, because what other industry can you actually lock someone in? So remember that. And that should really, really help you because it’s also going to make them work harder. Because they know that if they don’t, they’ll lose the job or they’ll lose you as a customer. And that’s how it should be as it is in every other industry.
I hope that helps. That’s a really, really an important one that I feel very passionate about. And so remember that.
Next week what I’m going to do is, I’m going to talk about another myth – that you know your apartment is getting sold or undersold to a trader to be resold because you don’t. And I’ll give you a few tips on how you can tell.
Is this true – Not all agents get paid the same? Well, we will discuss more about this myth on this podcast.
TRANSCRIPTION:
Good day. Andrew Murray, Apartment Specialists talking about the Auckland apartment market.
This is an interesting one – Not all agents get paid the same. That’s quite a myth. You would think real estate agents all get the same – the owner pays a commission, they get their cut. This is actually not the case. A real estate agent is judged by their agency according to how much commission they bring into the company. Not if they get highest prices, not if they do the best job but how much money they bring into the company. What happens is the more money they bring in, they get a higher percentage of that commission. So what happens is, if a vendor pays $10,000 dollars towards an agent. If they are a beginner agent, they’re probably going to get most likely about 50% of the commission. So 50% of $10,000 – if they list and sell a property goes to the agency – and 50% goes to the agent. Now, as an agent brings in more commission, their percentage will change.
A top agent may get 70% to 80% of their commission. This has quite a few implications because if you go through – if the lead comes through a company – as in the agency – the boss will more likely put that lead to where they’re going to receive the most money. When you think about it, if the agency is going to get $5000 off one deal and $2000 if they direct it to a more experienced agent, they’re going to give it to the least experienced because they’re going to make more money. There’s a bit of a conflict there.
So always, never choose the agency. Choose the agent. Also, when you’re choosing your agent, always ask for the history of the sales and how they stacked up. Because in the Auckland apartment market ,you can’t really tell who’s getting the highest prices unless if you ask them to show you their previous sales and how they stacked up – how they ranked -and the building they were sold in. They’ll tell you if you’re dealing with the agent you want to deal with.
Just a recap – Not all agents get paid the same. So never go through an agency. Call up the agency and go – I’m looking for an agent to represent me – because you’re most likely not going to get directed to the one that’s best for you. You are going to get directed to the one that’s on the lowest cut. I hope that helps.
Next week, I’ll be talking about sole agencies and what happens when you want to get out of one. How is this dealt within the Auckland apartment market? Do they let you out of a sole agency?
