Market warning: these sellers should think carefully before acting, especially in the current buyer’s market…
New listings have surged, but sales have failed to keep pace.
The shift from a seller’s to a buyer’s market in recent months has put unprecedented pressure on sellers. Data released by OneRoof shows that new listings have surged over the past two months, but sales have failed to keep pace, adding to the difficulties of an already subdued market.
Auckland’s market is particularly challenging for sellers. Many local real estate agents report fewer people attending open homes and less urgency among buyers. The market’s rapid shift in buyers’ favour has left some sellers at a loss, prompting many to change agents and sales strategies in an attempt to improve their prospects.
Comparison of total listings, new listings and properties sold in the Auckland market from August 23 to February 24 (Source: OneRoof)
An Auckland agent who wished to remain anonymous recently said he had already “parted ways” with several clients this year, mainly because the homeowners had unrealistic price expectations. The subdued market is making it harder for people to sell their properties for the prices they want.
The agent said frankly that, in most cases, homeowners had been promised too much and believed their properties were worth exceptionally high prices. Overpromising is very dangerous in a market like this, with some agents even offering free marketing to gain market share. Having learnt from experience, the agent now chooses to end the relationship amicably as soon as he realises it is not a good fit. Past experience has taught him that repeatedly giving in and compromising harms his own interests and ultimately fails to deliver a positive outcome for either party.
Luxury property agent Michael Boulgaris advises sellers to think carefully before making a decision. He believes dismissing an agent who has put in a great deal of hard work is a blow to the agent and an unwise decision for the seller. He urges sellers to be patient, particularly in a weak market. One seller worked with him for two years, and their sustained trust and effort ultimately secured a good price for the property.
Boulgaris said owners unable to sell in the current market have only two options. One is to accept reality and lower the price after six months to attract buyers and gauge the property’s actual value. The other is to rent it out for 12 to 24 months before trying to sell again, in the hope that house prices will have risen.
“They could also consider renovating a dated bathroom or kitchen, or at least freshening up the property with paint and landscaping to make it more appealing. Alternatively, they can remain patient, stay loyal to their agent and go with the flow.” Boulgaris believes these strategies generally work over the long term. He has been in real estate for 37 years, and most of his clients are loyal and have become friends.
Real estate agent Ollie Wall said that, in the luxury market, a property’s value is likely to fall when its seller changes agencies. “In our experience, moving from one agency to another is a bit like taking an item off the shelf and putting it in the shop’s bargain bin. I think that reduces its value from a buyer’s perspective. If you see it with one agency and then with another, it already looks like it has failed.”
With properties taking increasingly long to sell, he understands sellers’ frustration. When this happens, sellers sometimes feel they should try something new, which is a reasonable response. However, he believes doing so in these circumstances usually works against the seller. For some homes, the challenge is finding the right buyer, and that can take longer than expected.
Admittedly, a weak property market can create a substantial gap between market prices and sellers’ expectations, potentially causing the relationship to end on bad terms. Homeowners often decide to terminate their contracts early because the sales process has not met their expectations. Of course, this working relationship goes both ways. Although homeowners engage real estate agents to represent them, agents can also seek to terminate their agency agreements if the relationship deteriorates because of mistrust or unrealistic expectations.
What has your experience of selling a home been like? Have you had a positive experience working with a real estate agent?