Disclaimer

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Disclaimer

• This presentation is not investment advice. It is
  only intended to inform and illustrate. Persons
  investing in real estate should obtain
  professional financial and taxation advice before
  buying a property. Sources of information
  contained in this presentation are believed
  credible, however, AIC cannot guarantee their
  accuracy. AIC takes no responsibility for errors
  or omissions contained in this presentation and
  it disclaims any liability for any loss or damage
  incurred by any person for a reliance on any part
  of the contents of this presentation.

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I need to sell and it will probably be at a loss
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Minimise losses

• AIM This presentation will cover how losses can
  be reduced. This is in a situation where a
  property must be sold and it will probably be at
  loss due to a downturn in current market
  conditions (ie a property bought at the peak of
  the property boom and is now in the midst of a
  significant downturn).

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Have you explored all options

• Refinance
• Release equity
• Revalue property
• LOC up to 85 or pay LMI (negotiate LMI
  reduction)
• Move out and rent
• Rent out bedroom for share/student accom
• Rent garage or carspace

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You decided you need to sell

• Assess Situation
• Why do I need to sell?
• Have I assessed other options other than selling?
  
• How much time have I got?
• How much money have I got?
• What are my constraints?
• What is the worst case scenario?
• How can I avoid the worst case scenario (Limit
  the loss/damage)

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Mortgagee possession

• Try avoid it. Detail to the bank your problem and
  work with them.
• 3 failed payments
• Last notice
• Seizure
• Real estate agent engaged
• Sale
• Bank refunded monies owed
• Owner reimbursed remainder, if any
• If you follow bank instructions, in many cases it
  will not affect your credit rating!

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Plan

• Time period to sell (campaign and settlement)
• Realistic selling price (fair market value do
  CMA)
• How are we going to sell it
• What is the strategy
• How can we minimise losses
• How can we have the property appeal to as many
  people as possible

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What is your selling strategy

• Auction
• Private Treaty
• Make property competitive, emotional and open to
  as many buyers as possible
• Contract - Will accept 5 deposit
• Agent - Will consider slightly longer settlement

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• Negotiate commission with agent
• Give them incentives (results driven)
• Know your selling team
• Have open house at the best period of natural
  light
• Attend open house as unassuming spectator
• Listen to comments (how can I do better?)
• Instigate cost effective improvements from
  previous open day
• Open house on weekday and Sunday as well

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Advice and Ideas

• Get free advice/ideas
• Use other real estate agents (free appraisals)
• Magazines - Home Beautiful
• Internet gardens, home makeovers
• Library!
• Call valuers

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Improvements

• FIRST AND LAST IMPRESSIONS
• Wash exterior
• Make house more practical (switches, handles,
  door stops, towel rails, bathroom
  ventilator/heater, shaving cabinet, shelving)
  Turn house into home (be careful about individual
  tastes)
• Improve security (locks, light sensor, fences,
  gate)
• Cleanliness (dust, stains, crumbs, cluttered
  environment)
• Improve light (curtains open, improve reflection,
  replace bulbs)
• Hygienic kitchen, laundry and bathroom
• Attention to detail

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improvements

• Replace carpet, use rug, (even hire rug)
• Paint
• Façade (first impressions)
• Garden (lawns)
• Furniture
• Change furniture if necessary in entrance room
• Aroma in kitchen

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• Draft and attach facts document to brochure
• Schools
• childcare
• Transport
• Shopping centres
• Medical facilities
• Places of worship
• Entertainment
• Recreation areas
• Access to major routes
• Time and distance to CBD and beaches/lakes/rivers

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Potential to Gain Unrealised Value

• Speak to a Town Planner (what can be done to
  improve intrinsic value of property)
• Drawings (What could be done)
• DA (careful not to over capitalise)

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Offers

• Dont rush into accepting the first offer,
  especially just after the launch of the campaign
• Private Treaty - Negotiate a higher price if the
  offer is below your asking price and point out
  all the attributes of the property. Be prepared
  to be flexible with terms.
• Auctions Meet with the auctioneer and discuss
  how he will auction the property and ensure that
  he knows ALL the attributes of the property
• Ensure that there are no disruptions during the
  auction and a wet weather venue is prepared just
  in case

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After Sale

• What have you learned?
• How can you avoid it in the future?
• What worked, what did not?
• How could you improve?
• What was the best thing that worked?
• What was the least beneficial?
• Evaluate how much you think you gained thanks
  to implementing some of the strategies mentioned?

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The Future

• Live to fight another day
• Take the loss as a lesson and learn from it
• Failure is a closer step to long term success
• You will be better prepared in the future
• Many of the worlds leaders and richest
  individuals failed at some time in their lives
  and grew stronger because of it (Alexander Graham
  Bell, Lincoln, Col Sanders, Reagan, Mitterrand,
  Churchill, De Gaulle, Gann, Livermore, Curie)