24 Apr How to sell a very unique property with limited interested buyers?
In today’s show Michael Cooney, from Hodges, joins us to talk about how to sell a very unique property with limited interested buyers.
Kevin: Sometimes from time to time, you’re going to need to move something out of your portfolio that might not be performing all that well, and it might not be performing because maybe it’s only limited in terms of its attraction to tenants or even its attraction to buyers. What can you do? Michael Cooney from Hodges in Melbourne has had some experience with this and joins me.
Michael: Well, thanks, Kevin. How are you?
Kevin: Good. Michael, what advice would you have for someone in this position? What should they be doing?
Michael: They have to firstly understand the property they’re trying to sell and its uniqueness. Every property has a unique selling feature. If they’ve had it for a while, it could be something that has a longer term tenancy in it. You have to understand the property, and if they’re going to sell it, they need to find an agent who will understand the property. That’s the first thing. The current owners bought it for a reason or reasons, so it’s very important that the agent knows those reasons, and this will help them understand the buyers who they’re looking for.
Timing is the next point. When is the best time of the year to sell and show the property? Now, now if it’s an average investment, time is probably less critical. At the moment, if we’re going to sell apartments above shops in an area where it’s a bit of a tougher market, what we have to do then is look at “Okay, how are we going to market those? Who’s going to buy it?” and they’re very much a local buyer. I would advise your investors then to choose a local agent. They should be choosing someone local who knows the market, who has sold similar properties, and that’s very important, also.
Kevin: I like the point you made earlier, Michael, too, about understanding the buyer and where they’re going to come from, because that’s certainly going to help with the marketing again, I would imagine, as well.
Michael: I think so. I think if you’re looking at, “Who is going to buy this property? Is it another investment or is it going to be an owner-occupier?” If it’s going to be another investor, are they going to be a local one? Are they going to come from a financial planner? Are they going to be a self-managed super fund?
But if they’re going to be an owner-occupier, if I were the owner of the property, I would be looking to do some research about what you can do. Research “What properties like mine have sold recently, and who has sold them?”
Go to that agent. If they’ve had a successful marketing program, you know how many days it’s been on market, they will have a list of buyers who perhaps missed out on the property, so an off-market sale may be a distinct possibility.
But you also have to look with unique properties at why are they selling now? What’s the reason they’re selling now? Is there a real negative with the property that they need to tell the agent that needs to be overcome?
Kevin: There’s always a reason for a property to be sold, Michael, isn’t there? It could just be that it’s excess in the portfolio and you’re saying you should brief the agent on this?
Michael: I think so. It’s really important that people tell the agent and find an agent who you can sit across the table and have some really open and honest dialogue with. If it’s a distressed situation, tell them, because the right agent will help you. The right agent will help you in every circumstance. The wrong agent won’t.
It’s really important to research, “Okay, I’m going to perhaps rate my agent and see who the number one sales office in the area is, who is the number one salesperson. Does that coincide with who’s selling these types of properties in the marketplace?”
It could be simply that you’re retiring, it’s a pre-CGT (capital gains tax) property, so you’re just ready to liquidate it, or you’re looking to move into another investment. You’re shuffling between funds. There are a number of reasons why you’re selling. Be open with the agent and make sure that person understands exactly what you’re trying to achieve, when you’re trying to achieve it, and how you’re trying to achieve it.
Kevin: Yes, it all makes sense, Michael. Thank you so much for your time, Michael Cooney from Hodges in Melbourne. I appreciate your time, mate. Thank you.
Michael: No worries. Thanks very much.