By Charles Tarbey

When it comes to transacting real estate, it is natural to formulate our property goals based on numbers. With the ever-present influence of price guides, auction clearance rates and headline growth figures upon our decisions, it can be easy to overlook the human aspects of real estate.

While crunching the numbers of a prospective transaction is essential, I believe it is equally important to evaluate the relationship dynamics and emotional influences that may play a significant role in achieving results in line with your property goals.

1. Consider online versus offline strategies

As consumers, we have become accustomed to a wide range of choice when looking to purchase goods or engage with a service. Of late, this is increasingly true of the real estate industry as a variety of different digital and disruptive platforms for real estate sales are entering the Australian market.

Vendors are advised to carefully investigate these offerings and evaluate which best suits their objectives. While it may boil down to a personal choice about how much involvement you want from an outside party in selling your property, I encourage Australians not to overlook the benefits of embracing real life relationships and communication.

Simple actions like chatting to people in your local market who have recently sold and seeking their advice, picking up the phone and speaking to a local agent about your options, or capitalising on their database of established relationships to ensure your property attracts maximum exposure, may make the difference between a good price and a great price for your sale.

2. Embrace auction competition

In heated markets where supply levels may be lower and interest strong, it may be worthwhile selling your property in an auction to capitalise on this interest from prospective purchasers and stimulate a greater sense of urgency for the sale.

Recently, I saw that two great properties with water views located on the same street had sold within a short period of time. One was sold at auction, and the other via private treaty, yet the property that sold at auction achieved a considerable amount more.

Disclosing the price may create a ceiling in some situations, with buyers less inclined to want to pay more. However, auctions can create a competitive bidding environment in which buyers do not want to miss out and may result in a price beyond expectations. This can often be put down to human vs human bidding and powerful communication from the auctioneer.  

In saying this, it will still remain important to weigh up the chosen method of sale in light of local market dynamics as we see diverse conditions across Australia. 

3. Incentivise your agent

Alternatively, in markets where there may be more stock on the market and increased choice for buyers, a private treaty may be a more favourable option. Vendors may wish to consider the value of the commission they are prepared to pay in these types of markets.

With the offer of an incentive such as a higher than market commission, people can naturally be inclined to work harder to achieve the best results. This can be applied to the relationship between a vendor and an agent. 

Of late, it appears that some agents are discounting commissions to attract listings in competitive markets. Vendors should be wary of this as the cheapest commission may not guarantee the highest quality service, and a short-term desire to save money may backfire if it leads to a result below expectations.

Negotiating a mutually acceptable rate of commission with your agent can not only encourage them to work to achieve your expectations, but it may also serve as a good indication of how effectively they will negotiate when selling your property down the track.

4. Think long-term

Finally, the prospect of capital gain is an obvious motivation in transacting real estate. However, some may want to rush and may buy and sell property too quickly in pursuit of a quick profit. Others can tend to be easily influenced by chatter of market crashes or property bubbles, and exit the market too early when they could have achieved better results.

I am of the view that to position yourself for the best possible outcome, property investment should be approached with a long-term outlook in mind.

Recent CoreLogic data from the September 2016 quarter showed that across all gross profit sales realised, the typical length of ownership was recorded at 9.1 years for houses and 7.6 years for units, attesting to the value of holding property for a longer period of time.    

With the appropriate due diligence and professional advice combined with a patient, level-headed outlook, you may be able to better navigate the movements of the real estate cycle in your area and time a transaction for a favourable outcome.