Hi brains and experience trust,
We have this 1 BR apartment that was a necessary purchase 10 years ago but a poor investment, so we are looking to get out of it.
We are also in the midst of settling 3 IP’s and planning the renos on those, so are somewhat time-poor.
We spoke to RE agent and had two questions: 1. What’s it worth and 2. What will it cost to sell it. The answers were 1. a $100k range on the sub $400k property, and 2. $7k marketing plus 2% or so.
Actually, the RE agent’s answers turned us off. So we started rethinking what we needed.
The RE agent waxed on about triggering emotion and leveraging off competition to get much higher offers at auction (possibly).
It’s realistically a sub-$375K unit. It looks nice and is tenanted @350/wk. We’ll be happy with $350K and aren’t too bothered trading off the $11k marketing and commission costs against a possible kick of the price to $370k (quite unlikely) or $360k (zero sum game).
We’re looking to list at $365k and aim to sell for $355k+ via a “sell your own property” site.
What would you do? Find a RE to take it to auction or go for the owner/seller experience? Why?
If your instincts kicked in and you looked at the numbers, yes you are correct. We will not be trying to sell to investors, lol.
Thanks for your time.
Red and Jane
Hi Red and Jane,
First off, which city the unit is in would likely make a difference to any answers. e.g. I wouldn’t be suggesting auction in Brisbane (where the usual “sold at auction” rate is around 50%). That might work better in other centres, of course. Also if you give an area of a city too, that might help give more context.
$7k plus 2% sounds way off to me. But then, I’m from Brisbane, where a $350k property’s RE commission would be somewhere near $9k total, and not $7k plus another $7k. Of course, that quote might be RE speak for “an auction campaign” where they (supposedly) spend heaps on advertising and promoting ($7k? – yeah, right) and then charge you a further $7k on sale.
I’ll leave it at that for now – let’s see if others have more ideas,
Benny
Hey Benny,
Thanks for your thoughts.
It’s Carnegie, Melbourne, VIC. They are crazy about auctions down here. Only have a hammer….
Yes the agent was suggesting an auction marketing campaign @7k. Other agency commissions may be closer to 1%
The REA commission will only move $200 for each extra $10k that they can sell for. I personally don’t see a big incentive for a REA to work too hard to sell for a higher price.
I imagine that the REA roll their marketing campaign and then leave it to the auctioneer to excite the punters and live with the result.
Hi again,
Thanks for the extra info. I don’t know Melbourne at all, but I hear the situation for renters is dire throughout Aussie right now. Can that translate into having renters buy a little 1bdr? I’m not sure, as borrowing has also got harder with the HUGE increase in Interest Rates over the last 12 months or so.
If an opinion helps, 1bdr’s were always the “poor cousin” of RE investing. They were always harder to sell in times gone by – but today, with everything else now so expensive, perhaps the timing is right for a sale. The lower price point helps someone with less deposit saved. They may also be sick of paying ever-increasing rents too, helping them to decide on saying “Yes” to your place. So if ever there was a good time to sell a 1bdr, this could be it.
I can’t comment on the FSBO aspect as I’ve never done it. I also don’t hear of it much in Aussie, but perhaps Melbourne is different? Anyway, good luck with the sale,
Benny
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