22-10-2013

Skip auctions if you want to sell to first-timers, agents told

Landlords.co.nz

1. News
2. 2013
3. October

Agents and vendors need to consider listing properties with listed prices, or by negotiation, if they want to continue to attract a range of buyers, brokers say.

By Susan Edmunds

Auctions have been the sales process of choice in Auckland for some time now.

But since the loan-to-value restrictions kicked in, very few low-deposit borrowers have been able to get preapprovals for home loans, which makes it impossible for them to bid.

Up to three-quarters of the houses sold in Auckland over recent months have been sold under the hammer.

The new rules mean that more houses are being passed in, reserves unmet.  Investors with more equity are still in the market for those properties, but tend not to bid as high as would-be homeowners.

Christine Lockie, of Loan Plan, said if agents continued to favour auctions, they would lose the first-home buyer market and the emotionally-attached buyers who went with it. “If agents change their strategy, some first-home buyers will qualify for lending over 80%.”

Campbell Hastie, of the Go2Guys, said a change in sale method would make a huge difference. “If it was to change to price by negotiation, that would open the door to first-home buyers.”

He said buyers with a small deposit could then put an offer in on a property and then go to the bank and ask them to take a serious look at it.

Broker Grant McFlinn agreed it was still possible for people with a deposit of less than 20% to get finance in some cases, but it would require more than a three-week auction campaign.  “If enough properties in the typical first-home buyer market don’t sell, [agents will] wake up to the fact that they’ll need to use other ways to sell properties.”

Source: Landlords.co.nz