Method of sale question?

[richard56]

Hi
My late uncle has 2 property that the Public Trust are just about to try and sell on behalf.
We have been asked to chose our preferred Method of sale.

I believe the property's are 2 adjoining 2 bed units in Barbadose St Christchurch.

So which of these methods would you chose given today's current market in Christchurch?

1...general listing with real estate agent

2...Sole Agency with..."any one you guys recommend right now in Christchurch?...for a period of...."how many days"

3...Auction

4...Tender

Thanks
Richard

[Sportsvee]

I'm no expert, so take the below how you please.

It all depends what you want. Quick sale? Top dollar? Not fussed?

Auctions turn some people off, but generally get you the top dollar there and then. And have the added benifit of a possible sell date.

If not in a hurry, list it with an agent (sole or otherwise) & let them do the leg work. Find a realistic price you are happy with & wait.

Never done a tender, again might turn some people off.

Personally I like to have an idea of price when looking at something so I can do my figures. Auctions and such you usually get a BS figure from the agent.

Hope that helps a little.

[SimonW]

What is the approximate age and condition of the two units in question?

The Christchurch market is unlike any other market in NZ right now, especially if we're talking about older units. If you have a look at Trademe, you will find there are 187 sale listings for 2 bedroom units in Christchurch and it's fair to say that some have been on for an awfully long time - The oldest listing dates back to Wednesday 18 March 2015!!!
The sale market for older units here is certainly not on the boil in the same way as other regions. The most likely reason for this is that there is a lot of brand new or nearly new housing stock that has come on the market as a result of EQC rebuilds, so the traditional 1970's concrete block or summerhill stone units are now in less demand and are therefore not selling as quickly as they did say two years ago. That's certainly my take on the situation anyway - others may disagree.

It's also worth considering that there is now a lot of vacant rental stock out there in Christchurch - again due to new or recently EQC repaired units coming back on the rental market. As of today, there are 345 2 bedroom units available for rent on Trademe. This has led to more choice for renters and an overall reduction in the weekly rents. To give you an example, a 1970's unit of mine which was previously rented consistently for $340 a week between 2011 and 2016 is now only getting $275 and it took a while to find the current tenant. I think it's certainly fair to say that tenants have more choice in Christchurch now - especially between many good quality new or near new rentals, so the older stock now needs significant refurbishment to be able to compete, unless lower rents are sought. That's definitely been my experience and has led me to complete some pretty comprehensive renovations in the last couple of years - full insulation, double glazing, new carpets, kitchens, bathrooms etc.

If your late uncle's units are in need of refurbishment, you may not find much demand for them unless they are priced accordingly. A buyer is also not likely to find much rental demand until refurbishment is completed - at least not from quality tenants.

Late last year I was lucky enough to link up with an agent who had just sold another unit in a 1970's block where I also own a unit. The other unit was sold in a multi offer situation and I managed to leverage off that - the agent found me a buyer within a week, at a price level which was above my expectations, and I didn't even advertise my property. Had I not been able to do that, I believe it would have taken quite some time to find a buyer for it, and I would have had to do a lot more work to prepare the property for marketing.

In regards to the original question, my 2 cents would be as follows:
If you want a decent price for an older unit in Christchurch, I wouldn't recommend an auction right now. A lack of competition for such properties could work against you in an auction room.
I'd probably recommend a sole agency with a deadline sale. A deadline sale encourages a buyer to put their best offer on the table up front as they have no idea what other parties are offering, and they also have no idea how many other parties there are. That uncertainly drives them to offer what they believe the property is worth to them.

If you like, I can give you the contact details of the agent I used. He's a young go-getter and I certainly recommend him.

[richard56]

Hi
SimonW....you hit the nail on the head.
2 x times 2 bed 1970's units in need of refurb'
I will PM you later today.
Thanks
Richard

[Meehole]

Harcourts are the top real estate company in Christchurch, they sell more houses than any other company.
Ring your local branch and ask for the top sales agent. Your uncles places would probably appeal to a 1st home buyer.

[fuzzlevalve]

Auctions turn some people off, but generally get you the top dollar there and then

The stats say this is only true in a boom and the % is nominal.

[Meehole]

Auction is good for a house that has quirks and unknowns, buyer beware in other words or when the market has plenty of buyers. It's also good for agents who can't determine the market value of a house, or for an agent when they have an unrealistic vendor. Vendor thinks the house is worth $600k, agent thinks $525k. Rather than be honest and lose a listing better to go along and get the listing and the auction will condition the buyer to the lower figure. You'd have to be a pretty new or useless agent not to be able to put fair market selling price on a place.

[Davo36]

I would think in this case an auction will bring about a bunch of people wanting to steal it.

And the agent will use that to tell you it's worth bugger all, best to sell now.

What I'd do is a) Get it valued by a registered valuer so you know what it's worth and b) Do a general listing i.e. with multiple agents.

[richard56]

Hi
Yes Davo
That is the way I am leaning at the moment.
Public Trust has gotten Valuations and Appraisals done .
So I will let them know my preferred method and hopefully the rest of the family chose similar method.
Thanks
Richard

[Kaye]

Richard be careful with using their valuations and appraisals when I had to deal with them their appraisials were at least $50-$70k out.
I organised a proper appraisal to be done and sold at $90k above their highest appraisial. They use tame Valuers and RE Co's to do theirs mine was completely independant.