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SELLING A LIFESTYLE PROPERTY: RISKS & ADVICE

By Trish Willis | Member of the Property Institute of NZ (IPAC)

Data analysis reveals a few shock findings

Agent Finder NZ specialises in advising owners when preparing to sell lifestyle properties and has collected data for over 12 years. When analysed, some unexpected trends specific to lifestyle blocks were uncovered which are well worth being aware of.

Firstly, a total of 160 real estate listings of all kinds that went live online were analysed. Of this 160, 127 (79 per cent) sold.

The average time frame to sell them took 24.5 days.

Agent Finder NZ sought to establish what characteristics the remaining 33 unsold properties had in common and what could have been done to help the owners of these types of properties in the future.

How to scrutinise a property appraisal for a lifestyle block

What the data revealed about unsold lifestyle properties

The common indicators showing which properties will be most difficult to sell include:

Properties overvalued by vendors preferring to leave their property sitting on the market unsold and price-reduced over time.
Lifestyle properties not listed with a specialist lifestyle property agent. For example, lifestyle properties that should have been digitally and proactively marketed internationally but weren't. You can find out more about marketing your lifestyle block internationally here.
Properties with structural (leaky house) issues
Poor presentation, layout of furniture, real estate photography and therefore poor click rate to a listing online
Properties on the market a second time around (when the buyer pool has waned)
Tenanted properties (when combined with one or more of the above)

Most of the unsold listings fitted into two or more of the groups above.

Learn how to choose a suitable lifestyle property agency wisely here.

Lifestyle blocks were the worst affected

Over 80 per cent of them were on the market by the same vendor a second time around.
50 per cent scored five of the above risk indicators.
The remaining were affected by two or three of the indicators above.

The most common problem combination was lifestyle blocks listed on the market by the vendor a second time and price expectations too high. Or there were issues with the real estate agent's marketing standards and/or negotiation skills which vary greatly.

The hidden costs of not selling first time around

An additional period of paid advertising and marketing
The possibility of paying double commission if you don't sign the clauses provided
Additional interest paid on a mortgage if you have one
The emotional cost of more people trudging through your home...
You may have to re-rent the property again
Price reduced marketing and looking 'desperate to sell' starts to set in and you are more likely to accept a less than desirable sale price
Above all, it is disheartening. You've made a decision to sell and you 'can't move on'.

View this overview of how much it costs to sell a property in NZ

What can you do to prevent your lifestyle property from failing to sell?

Protect yourself with accurate appraisal information from vetted agents for all property types and especially for lifestyle blocks.
Specialist vetting of licensed real estate agents is free and 100 per cent independent of all real estate selling brands and uses a set of criteria for short listing the most competent lifestyle property agents.
If you believe your lifestyle property is hard to price, get an independent market valuer who is not recommended by your agent. You can then compare this to a property agent's appraisal.

More tips for lifestyle and rural sellers

Real estate often comes with the unexpected and interpreting titles, Land Information Memorandums (LIMS), Property Information Memorandums (PIMS) and all the associated issues such as covenants, easements and cross-leasing can all be quite complex. A property lawyer can cost a lot less than a lost sale due to lack of preparation.
Put your buyer's hat on and present your property in a way that appeals to the broadest range of buyers possible, inside and out. Find out more about how home staging can make an impact.

We continue to monitor and analyse the information available and as needed will write articles that put vendors at a greater advantage than what they might currently have.