Here are 10 key pieces of real estate knowledge or ‘truths’ that I have learned throughout my career. These tips will help you make better decisions when buying and selling real estate.
1. Every property would sell tomorrow if price didn’t matter
There is no such thing as an un-saleable property. Every single dwelling in NZ would sell tomorrow at some price. The house is never the problem, the price is the problem.
This might sound over-simplified but I find this mindset helps clarify thinking around most property decisions.
No matter what your property looks like, it could sell tomorrow at some price. Everything you do from the moment you decide to sell, is about maximising your sale price, be it focussing on preparation, choosing the right salesperson or deciding which marketing strategy to use.
2. Time heals most bad buying decisions
Don’t beat yourself up if you think you overpaid for your home by a few thousand dollars.
Chances are, in 5 years it won’t matter. Be glad you are in a home, that you are safe and have a roof over your head. Human nature is to over-analyze the things that went wrong (we think we paid too much) instead of focusing on everything you got right: Eg. Great school zone, sunny house, weatherboard cladding etc.
3. The best way to make money in real estate is to never sell
How many people do you know who have a story about the house they bought 20 years ago that they wish they still owned because it’s now worth 5 or 10 times more?
4. The first offer is probably not the best offer
One of the biggest real estate myths out there is that ‘your first offer is usually your best offer’. This is such an easy phrase for a salesperson to spout when they are sitting across from you with an offer they want you to sign. But they have no way of proving this saying to be true.
The best offer is one bought about through a competitive situation (if possible) after the property has been exposed to the market and all active buyers are aware it is for sale.
For some owners, a quick, early offer solves their problems and it’s ok to accept the first offer if it works for you. Just keep in mind that if you don’t fully test the market, you could be missing out on a higher price.
Read: Negotiation tips for sellers.
5. There is no such thing as a perfect builders report
I have never seen a perfect builders report. Not even for a new home. As a buyer, it’s important to manage your expectations and realise that every property requires maintenance.
Keep in mind too that a building inspector will only tell you what’s wrong with a property. That’s what you pay them for, after all. Don’t expect a balanced report with a pros and cons table.
Check out: How to read a builders report.
6. There is value in making decisions
When you are buying, maintain focus by making decisions quickly where possible and try not to over-analyse. Research different buying areas and then narrow it down as much as possible. There is value in learning a hyper-local market before you start making offers.
Talk through your non-negotiables (eg. afternoon sun, easy access, single garage) and then stick to them unless you can’t find anything suitable and need to adjust.
Read: What happens when you can’t agree on which house to buy
7. Amateurs quibble over 1-2%
It’s so hard to swallow your pride and let go of your need to ‘win the negotiation’ but sometimes that’s just what is required to help you get on with life. I’m talking about those situations where you and the seller are $10k apart and no one will budge.
Forget about the seller and their salesperson and ask yourself – Do you love this home? How many more weekends do you want to spend visiting open homes? Are you really going to let this property go over $10k?
Don’t worry about scoring points over the agent or the seller. If it works for you, go for it and get on with your life.
Read: How to negotiate like a pro
8. Selling is easier than you think
Once you have decided to sell there really are only 3 things you can control.
- Choosing the best possible salesperson
- Presenting your home as well as you possibly can
- Making it as easy as possible for buyers to visit your home
Stick to focussing on what you can control.
9. You can change everything about a house, except its location
Possibly the most important point on this list. When evaluating a property, I place far more value on the sun-aspect and the access (which can’t be changed) than I do on the condition of the property. A sunny home that needs lots of work beats a perfectly renovated home on the south side of a hill every day of the week.
Read: How to work out the value of any property.
10. You don’t need a ‘bulldog’ agent
You may be surprised how many potential sellers think they need to hire a ‘hard sell’ real estate agent to secure the best possible price. I have met many owners who will hire a salesperson they really don’t like, just because they think that salesperson has strong negotiating qualities that will help them extract the best price from the current market. In my opinion, this is the wrong approach.
A considerate, personable agent builds trust and makes it easy for buyers to offer, thereby increasing your chances of buyer vs. buyer competition.
A bulldog agent might be good at extracting more money from a buyer one on one, but more often than not, they alienate buyers from the process by coming on too strong. Potentially reducing the amount of competition for your home.
Here’s the thing: Competition beats negotiating tactics every day of the week. Hands down.
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Just a comment on point 9, it is sometimes possible to change access to a property. I am sure you have seen houses where a drive was added, despite being uneconomic or impractical 30 years earlier.
Another good blog Andrew. Particularly pertinent to today, those that have bitten the bullet instead of quibbling have done well to get on the property ladder as the prices have been on the move..
thank you, Andrew- great info, sir.