Selling a Tenanted Property

Selling a rental with tenants requires a number of additional requirements the owner and agent must abide by to ensure tenant rights under Legislation are met. While these requirements initially may seem onerous, by keeping a tenant “in the loop” with timely communication, any issues can be dealt with before they become insurmountable problems. There are pros and cons to selling a tenanted property:

Pros:

  • Rental income continues while the property is on the market.
  • Buyers benefit from purchasing a tenanted property – reducing costs such as letting fees and time vacant after settlement.
  • Potential buyers see the property as “rentable”

Cons:

  • Increased legislative requirements for notice to tenant
  • Reduced flexibility for opens
  • Possible lack of control over the standard of presentation of the property
  • Potential buyer pool – buyers after vacant possession may not be interested

A successful campaign of a tenanted rental keeps the tenant “in the loop” before, during and after the sale. A tenant who does not know what is going on, is uncertain of their future, or is kept in the dark with open times and notice will likely not be accommodating with access to the property for opens.

So, how do you do this?

Notice of Sale

It is a requirement before entering a residential tenancy agreement to advise a prospective tenant if owners have or intend to advertise the property for sale. A tenant can terminate a tenancy if the owner enters into a contract for the sale of the property within 2 months after the start of the tenancy agreement and did not inform the tenant of this intention.

Issue Correct Notices within Required Timeframes

On deciding to sell a tenanted rental property, an owner must advise the tenant with at least 14 days written notice they have entered into a sales agency agreement. Advertising the property or access to the property for the purpose of showing prospective purchasers cannot occur before this 14-day timeframe expires.

Once the initial 14 days has passed, the right of entry to the property for opens is outlined in the Act. These requirements include no more than 2 occasions within any 7-day period, at a time previously arranged with agreement of the tenant. If an agreement cannot be reached, at a time within normal working hours with reasonable notice. Reasonable notice is not defined, but at least 7 days minimum is advised.

Once the property is sold, the tenant must be advised in writing within 14 days or as soon as possible after the contract of sale is entered into of the name of the purchaser and the date from which rent is to be paid to him or her.

Remember, the tenant has a right to stay at the property during any open inspections, including on auction day. The tenant is also entitled to the quiet enjoyment of the property – continuous driving past or prospective purchasers walking around the property may not meet this requirement.

SA Listings tips:

  • Start an open and honest dialogue with the tenant as soon as the decision to sell the property is made.
  • All notices MUST be served in a timely manner, erring on the side of caution.
  • Provide the tenant with a complete schedule of inspections as soon as possible.
  • Any property manager MUST be in the loop with the decision to sell, plus the intended schedule. Consider combining routine inspections with other required access (such as photo sessions) in order to minimise tenant disruption.
  • Consider a small rent reduction throughout the campaign. This will show the tenant you are conscious of the disruption to the tenant’s enjoyment of the property.
  • Stay flexible. The tenant must not unreasonably refuse to allow access. However, be prepared and willing to negotiate access times.

SA listings will happily arrange for all of the above requirements to ensure your sale campaign runs smoothly. We also partner with experienced property managers who understand the needs of both tenants and landlords throughout a sales campaign.

Planning and preparation is needed. But if done, there is no reason the sale of a tenanted property should not go smoothly. Contact us for more information.

Justine Thomson

Preparing Your Home for Sale


Pay attention carefully, this blog could add thousands of dollars to the sale price achieved by your home, with only a relatively small outlay, plus some hard work and elbow grease! How? Well, the formula is simple:

  • Fresh paint on walls: preferably a neutral or crisp white – it’s amazing what a coat of paint will do
  • De-clutter: everything packed away in boxes, except the bare essentials
  • Minimal furniture: key pieces only with modern soft furnishings and accessories
  • Well kept garden: fresh mulch, neatly cut lawns and healthy plants
  • Clean windows and walls
  • Clean pavers and driveway
  • Repair any noticeable damage to the home: patch holes in walls for example
  • Remove mould from bathrooms and refresh grout
  • Basically, present a clean sparkling home that smells fresh!

Clients often ask how the home should look for photography and opens. To help clients visualise what is needed, I can provide pictures of furniture to be showcased in each room, such as those shown below. Take note, while each room in your home will not look exactly like this, I want clients to take away from these pictures the number of furniture pieces in each room and the way it is styled with the soft furnishings and accessories.

Finalcollage

The property image above, listed and sold recently by SA Listings, was styled for minimal cost and achieved a sale result of $46,000 in excess of Vendor expectations. Note the following from the photos:

  • Formal lounge includes 3 key furniture pieces: lounge, coffee table & cabinet
  • Bedroom includes 3 key pieces: bed and two side tables
  • Second bedroom includes 3 key pieces: bed, desk and chair
  • Kitchen: totally clean bench tops with exception of minimal accessories
  • Lounge includes 4 key pieces: lounge, chair, cabinet and coffee table
  • Meals includes 2 key pieces: kitchen table and 6 chairs
  • Outdoor area includes 2 key pieces: outdoor table with chairs
  • Front yard and rear yard: neat, tidy and clean

In addition to the key furniture pieces, the soft furnishings and accessories in each room really make it pop. Think eye-popping paintings, lamps, neutral toned rugs and fresh flowers, with a common colour scheme. For bathrooms, all you require are matching towels and a beautiful soap dispenser on the vanity.

A big mistake commonly seen in homes on the market, is overcrowding in each room with too many furniture pieces. This can have the impact of making rooms appear small and cramped. Whilst it may be difficult to live without these pieces, for the limited period it is showcased to market it is well worth taking the pain to achieve the gain.

We hope you found this blog informative and if the styling process is too overwhelming, SA Listings can assist you with professional styling. We offer a unique styling service with affordable styling packages. To find out more contact us at http://www.salistings.com.au/contact

Justine Thomson


 

What Price to Offer?


As an Agent I am often asked the same question from each and every potential purchaser, “How much should I offer?” The answer to this question is: there is no answer! As the Agent selling the home I work for the Vendor and my role is to achieve the best possible price for them – but I’m unable to advise you, the purchaser, of what price you should offer for the property.

However, to give you some insight into ways to determine the offer price to secure the home of your dreams, SA Listings suggests you think about the following points:

  • Do your own research on the area and current market sale prices for similar properties. To assist you with this, a good Agent should be able to provide you with a list of recent sales of comparable properties in the area.
  • A good Agent should always consider current market prices for similar properties sold in the area and should price the property accordingly. Your own research, plus the agent’s comparable price list, should give you an indication of where you believe the property price sits. Remember, the price advertised will be the Vendors expectation so your offer should, as a minimum, be in this range.
  • Have you missed out on previous properties you were interested in? If so, the reason may be is you are low-balling your offer in the hope of securing a property below current market conditions or you may be seeking a property outside your budget. I can tell you, the chances of securing a property using this approach is slim. A good Agent prices the property in accord with current market conditions and if you low-ball an offer the Agent will likely recommend the Vendor reject it. The likelihood of securing a property using this tactic is as probable as daily rain in Dubai. Do not low-ball, go in with your best offer from the start.
  • Consider carefully any conditions you include with the offer. An Agent may recommend a Vendor accept a lower offer if no conditions are attached, for example, a cash unconditional may be more attractive than subject to sale. So be prepared: have finance pre-approvals in place, offer an appropriate deposit and know what you are prepared to do regarding settlement timeframes. Being prepared here provides confidence to the Vendor of your ability to pay for the property and shows you are serious about the property and your offer.
  • Remember, each property is unique and if you have been searching for some time and this property ticks most of your boxes then don’t miss out, put your best foot forward from the start. Too many people miss out by trying to snag “that bargain” when in reality, had they put in a realistic offer initially they would have secured the property.

contractOne final note, don’t bother asking the Agent where your offer sits compared to others. A good Agent will not disclose this as it is against South Australian legislation. The agent is unable to tell you any details of other offers, other than the fact there are other offers. If you wish, you can ask for this in writing.

If this home is THE ONE, your inner Zen, your sanctuary, the right floor plan, the right location and within budget then don’t be influenced by other offers, just focus on what you want, what you can afford and put forward your best and final offer. You may not get a second chance. If your best offer is not good enough, be prepared to walk away, another one will come along.

If after reading this blog, you are unsure on how to go about the negotiation process you can always engage a Buyers Agent to act on your behalf. SA Listings offers this service – for more information contact SA Listings at info@salistings.com.au

Justine Thomson

Staging a Home for Sale


The whole world is a stage – but should your home be?

What is it buyers look at when visiting an open home? Frankly, ask three different people and you may get four different answers! While one may step back and take in the larger picture of the home as a whole, another may look at the same house through the eyes of the furniture, the art, or even the family photos on the wall, and yet another will simply cast a critical eye over the structural integrity of the home. It may even be that it is easier to answer what is it buyers look at by first ensuring there is nothing in the home that will turn them off as soon as they walk in.

Some examples? Tired, ratty old furniture that has seen better days, magazines or books in the loo, and whilst you may simply love your collection of every set of commemorative babushka dolls from the twentieth century – it may be many buyers will not.

Now of course, most people have some idea that in order to correctly present your home for sale you need to “de-clutter” and “de-personalise,” but what about the styling through out the home? This is where the services of a home styling or staging professional can help – with interior designing skills to make your home stand out that extra mile.

A home stylist will cast a critical eye over the home, and will be able to provide appropriately styled furniture and accessories to suit. For example, large furniture pieces may be comfortable, but they may be cramping the space available, making it look smaller than it really is. Changing them over for smaller, less intrusive pieces that match and compliment other pieces in other rooms creates a sense of space and style. Styling gives potential purchasers an idea of what the home could be for them, not what it currently is for the vendor.

A home stylist may also remove items that stand out and draw the attention of buyers, such as loud artwork or rugs. Again, a flowing sense of style throughout the home will help ensure the home appeals to as broad an audience as possible.

Remember, first impressions count. You want buyers to walk into your home and imagine living there with their family, inviting their friends over to a home they are proud of, a home that is up to date and on trend.

Not every home will require the expense of a stylist or staging. But in some cases, the outlay of a moderate expense may mean a greater return come settlement day.

master_bedroom_before_and_after_long_distance_interior_design_online_grande1

Should you be interested in property staging, during the appraisal of your home the SA Listings’ team is able to discuss options that best fit your property and budget.

Justine Thomson

Selling Yourself

If you are considering selling your home in 2017 there are many paths you can take:

  • Sell it yourself
  • Engage a traditional real estate agent on commission with a full agent service
  • Engage a real estate agent at a fixed price with a full agent service

Selling an $800,000 home could cost as little as $2,610 if you sell yourself or up to $17,675 if you utilise a traditional commission agent.

If you are considering selling on your own, think carefully about the following:

  • Appraise the property correctly by using publicly available information about local sale prices and consider an independent valuation to assist
  • Ensure you present the home well for photography
  • Prepare relevant marketing material
  • Ensure all relevant documentation is available to a potential purchaser to enable an informed decision to be made, example: council rates, water rates, copy of title etc
  • Be prepared to arrange inspections by appointments and opens at various hours of the day
  • Be prepared to meet potential purchasers and take on board any negative feedback
  • Follow up with those people interested in your home and be prepared to take the emotion out of the sale negotiation
  • Engage a Solicitor or Conveyancer to prepare the Contract and Form 1

People often underestimate the work involved in selling a home and the level of professionalism required to negotiate the best conditions and price. Selling a property is an emotional and intense experience. It can be easy for a seller who decides to sell it on their own to run into trouble with incorrect information provided to a prospective purchaser or the inability to remove the emotion from the sale. A real estate agents market knowledge and negotiating skills can be particularly useful when it comes to listing a property for sale. Following is an indicative table of costs under each model.

Cost to sell an $800,000 Home by Private Treaty Sell On Your Own Sell with SA Listings Sell with a Traditional Agent @ 2%
Base Price $1,295.00 $7,888.00 $16,000.00
Professional Photography Inc Inc $200.00
Sign Board Inc Inc $150.00
Listing on realestate.com Inc Inc $500.00
Brochures Inc Inc $110.00
Open For Inspection Manage Yourself Inc Inc
Form 1 $330.00 Inc $330.00
Government Searches $385.00 Inc $385.00
Contract Preparation $600.00 Inc Inc
Total $2,610.00 $7,888.00 $17,675.00

In 2017 there is choice and the flexibility to now sell your home with a full agent service at a lower cost to a traditional commission agent. So why create a headache for yourself and embark on selling alone when you can engage the service of a real estate professional at a transparent fixed fee. Whilst you think you will save thousands by selling yourself, it could in fact cost you thousands in the final negotiated price!

Justine Thomson

 

SA Homes Top Ten Wish List

I thought with 2016 recently ending and the New Year ringing in, it is an apt time to review the most common search words buyers use when seeking a property in SA, to assist any would be seller in 2017.

Many will be surprised pool is the number one search word when seeking properties in SA. For all those lucky enough to have a pool, the cost to run, maintenance and amount of times utilised often outweigh the benefits a pool can bring but at sale time this can be a bonus. A pool can be an attractive garden feature and for families a must have in our dry, hot summers. If your kids have flown the coop and you are thinking of ditching the pool, think twice, especially if you have plans to one day sell your home and downsize.

The old fashion granny flat is back in vogue! Statistics prove our kids are staying at home much longer these days and often do not consider leaving the family abode until in their late twenties or early thirties, sigh…. Grandparents are also becoming a part of the extended family, assuming a carers role for children when both parents work. To give extended adult families breathing space it is little wonder the granny flat is a highly sought after commodity. If you are fortunate enough to have a granny flat and are considering taking your home to market, it would be worth spending some coin on reinvigorating life into this space. If used as storage, clear out the boxes, de-clutter and style as you would a second home.

The corner block has always been a sought after find in SA but even more so since the State Government zoning changes. If you fall into the new zoning categories for higher density living, the corner block can be correlated to the golden goose who lays the golden eggs. Make sure you check with your council for current zoning requirements before putting your home on the market. The right zoning can add tens of thousands to your sale price. A good agent should be aware of the possibilities in your area when it comes to potential development or subdivision and should factor this into the market price.

Top Ten Property Search Words in SA

  1. Pool
  2. Granny Flat
  3. Corner
  4. Views
  5. Beach
  6. Shed
  7. Esplanade
  8. Cottage
  9. Character
  10. Investment

To maximise the return on your property consider the top ten search words and ensure your Agent takes full advantage of known characteristics your home has in meeting buyer needs.

If considering selling your home in 2017, we would love to hear from you and assist you in making the most of your properties attributes: salistings.com.au

Justine Thomson

The Great SA Property Rip Off

The headline may have caught your attention but this will catch your attention even more. I have calculated stamp duty payable across all states based on the July 2016 Adelaide median residential house price of $445,000.00 and the results will surprise:

QLD:     $0

WA:      $2,878

VIC:      $9,335shutterstock_84524770

ACT:     $11,260

NSW:   $15,515

TAS:     $15,910

SA:       $18,580

NT:       $19,688

The calculations assume the property is an established residential Torrens Title home purchased to live in.

Effectively, South Aussies are paying 4.18% in additional tax on a $445,000 residential home to live in, compared to their QLD counterparts who pay zip, zilch, nothing! And we pity our poor NT cousins who are ahead of us at 4.42%. I call it a tax because it is. The State Government aptly see it as our “fellow duty” to help out the State Administration to fund the coffers. The differential of the transfer fee between SA and the States is also worth noting but I don’t want to depress you even further.

Stamp duty in SA is a barrier for first home buyers trying to claw the end of their fingernail on the property ladder. Some available options for residential stamp duty relief is to purchase an off the plan apartment or buy land and build.

Over recent years we have had some reforms in residential stamp duty relief with off the plan apartments but is this the right way to go? A policy providing stamp duty relief for off the plan apartments will inevitably increase the supply of apartments under construction but will there be enough demand from South Aussies to live in apartments? We still have a good supply of land available North, South and in the Adelaide hills to support our current population growth. We are not yet Hong Kong with limited land supply and large capital values. The concern with current policy is apartment supply will outstrip demand and basic economics suggests this will have a negative impact on apartment prices.

It would only seem fair to spread the love of stamp duty relief across all types of residential purchases. Alternatively, we can all move to QLD!

Justine Thomson