Are you struggling to sell your property? If so, there may be other options. Here’s how a group of homeowners teamed up to add millions to their properties’ values.
Every home seller has the same aim.
You want to sell for as much money as possible. That’s why you’ve spent so much time trying to add value to your property. Every home improvement makes a difference, as does the property’s capital gain over time.
Unfortunately, many sellers find that they can’t sell for as high a price as they initially intended. And that can cause issues elsewhere. Failing to attract a high enough price on your current home may limit your options for buying a new one. You may have also wanted to rely on that money to help with other purchases.
In the past, there wasn’t much you could do. The value of your property wouldn’t shift unless you made even more home improvements. And that requires time and investment.
But there’s a new technique that sellers all across Australia have started using. Instead of selling individually, they’re teaming up to sell properties as a mega lot.
These mega lots appeal to property developers who may want to repurpose the land. They can also add value to properties without you having to renovate your property.
That’s exactly what a group of sellers from Manly Vale discovered. But before getting to that, let’s look more closely at some of the issues that may affect the sale price of an individual property.
Issues for Property Sellers
There are all sorts of issues that could prevent you from attracting the expected price on your property. Experiencing only one of these issues may not have a huge effect. But a combination of them can prevent you from achieving a sale.
Here are four to watch out for:
- The Location. Buyers are very particular about the location of any property that they look at. Moreover, the requirements for the location change depending on the type of buyer. For example, a family may want a property that’s near schools and offers easy access to local amenities. But businesspeople may focus on transport links and ease of access to the city. The wrong location can drastically decrease the value of your property for entire segments of the buyers’ market.
- The Price Doesn’t Match Similar Properties. Your asking price may be the problem. A smart buyer will research all of the properties in your area to find out what other people have paid for similar properties. If their search turns up lower results, you may find yourself having to come down to their level.
- Poor Staging. Many sellers struggle with striking the balance between making a property homely and neutral at the same time. You want buyers to picture themselves living in the property, which means avoiding personalisation. But you also need to emphasise that they can make this house their home. On top of that, other staging issues can affect interest. Furniture arrangements that don’t take advantage of natural lighting prevent the property from achieving its full selling potential.
- A Bad Seller’s Agent. There’s no getting away from the fact that some seller’s agents don’t do a good job. They may not advertise the property well or they put very little effort into showing and staging. A poor agent can detract from buyer interest before people even see the property.
There are all sorts of other issues that may crop up. Alternatively, external market forces may have conspired to lower your property’s value. You may have done nothing wrong. You might even have made good improvements to the house. But if the market’s not in your favour, you’ll struggle to sell.
So, what other options do you have? Just take inspiration from the group at Manly Vale.
How the Manly Vale Group Will Do it Differently
It all started with a conversation.
One resident of Manly Vale has decided that the time was right for her to sell up and move on. But she didn’t want to go it alone. So, she started talking to one of her neighbours about the possibility of selling property together.
Both owned small bungalows that had a certain appeal, but weren’t likely to attract huge prices. There’s only so much money that a great view can attract. Moreover, most of the properties on the road dated back 40 years or more. The oldest had stood since the 1920s.
The two neighbours decided that selling property together might be the best option.
And that’s when the interest started to pour in from other neighbours. It turns out that these two weren’t the only people who wanted to sell. Several people on the road had the same idea. But various issues had held them back. It’s likely that most found they wouldn’t achieve the sale price they wanted, so they decided to stay put.
But teaming up provided them with an opportunity.
All told, 17 people joined the mega lot.
And that opened the properties up to an entirely new set of buyers. Instead of trying to find 17 individual residential buyers, the group could now sell to a single developer.
The group decided to advertise the mega lot with a local real estate agent. Within minutes of the advert going live, the group received several inquiries from local retirement villages.
But the site has the potential to be much more, if the group finds the right buyer.
The group expects to sell the lot for anywhere between $30 million and $55 million. Even at the lower end of that scale, each member of the group would pocket $1.75 million.
That’s much more than the value of each individual property.
Perhaps you’re thinking about following the same route as the Manly Vale group. If so, you should follow these tips to get started.
Tip #1 – Start a Conversation
It was a simple conversation that started everything for the Manly Vale mega lot.
And it could do the same for you. If you’re thinking of selling your property, don’t rush straight onto the market. Instead, start a few conversations with your neighbours. Ask them if they have similar intentions for any point in the future.
If they do, it may be better for you to team up and sell together. As you add more members to the group, you may find that others want to join as well.
But it all starts with that initial conversation. If nobody brings up the idea, it’s impossible to act upon.
Tip #2 – Establish Good Lines of Communication
As the group grows, you’ll find that lots of ideas get thrown into the mix. Each member will have their own goals for the sale. They may also have useful ideas for how the mega lot can appeal to more people.
If your group doesn’t have good lines of communication between all members, these ideas get lost. You may even find that resentment builds among group members who believe that no-one’s listening to them.
Hold regular meetings so that you can all share ideas. It’s also a good idea to formally introduce new members to the group. This gives everybody a chance to get to know each other and share their ideas.
Tip #3 – Assign Your Goals Early On
Goals are essential to the success of any project.
But you may run into a few difficulties when trying to sell a mega lot. You have several individuals involved, all of whom have their own goals.
Trying to satisfy everybody with the sale may not be possible.
Instead, come together as a group and set some goals that you can all agree on. These may differ depending on the group, but they can relate to any of the following:
- How much you intend to sell the lot for.
- What actions you need to take before you put the mega lot on the market.
- The type of property developers that you’ll aim to appeal for.
- Any contingency plans. For example, if the mega lot becomes so large that a single developer won’t buy it, you could have a plan in place to split it.
With your goals established, you can work backwards. Figure out the steps needed to reach those goals and ensure everybody agrees.
This early goal establishment lowers the possibility of confliction later on.
Tip #4 – Assign a Group Representative
While it’s important that you come to decisions as a group, it’s not the best idea to all turn up to every engagement. You’ll likely meet with estate agents, property developers, and other potential buyers during the journey. A group of 10+ people all trying to communicate at once could cause issues.
Instead, consider assigning an individual as the group’s representative. This should be somebody who has the confidence to talk and negotiate with people. Moreover, the representative should also be somebody that the group trusts.
Anyone in the group who has prior experience of selling property is a good choice here. They’ll understand the general mechanisms of the process, even if they change slightly with such a big deal.
Most importantly, the representative must understand the group’s goals and have the confidence to walk away from deals that don’t meet those goals.
Tip #5 – Understand Your Reasoning
Money is likely the key motivator for many people who decide to join a mega lot group.
But there are other factors at play as well. Market conditions may have made an individual property undesirable to buyers, which makes mega lots a good alternative. Zoning changes in the local area may also be the reason for joining a mega lot. Such changes may signal future issues, which could lead to your desire to sell.
The most important thing is that nobody should do it just to go along with the crowd. If somebody doesn’t have a good reason for wanting to sell, they may thwart the deal later on. Somebody pulling out, especially if their property is in a prime location, could cause major issues.
Tip #6 – Strike the Right Deal
This is a difficult one because the concept of mega lots is still fairly new for many sellers.
How do you know when it’s the right time to sell? Moreover, how do you know that you have the right buyers?
Look to the group at Manly Vale for an example of this. They could have sold their mega lot almost immediately due to the interest from retirement communities. But they chose to hold out because the lot has much greater potential.
You need to know what your mega lot has the potential to achieve before you can strike the right deal. Taking the first offer that comes up is rarely the right choice.
Speak to experts, such as property developers and real estate agents. Learn about the zoning issues in your area and how they may affect demand.
Understand what your lot has to offer before accepting any deals.
Tip #7 – Find the Right Estate Agent
This is a tip that applies to all sellers.
But those selling mega lots may have to put a bit more thought into who they work with.
In an ideal world, your agent will have some experience in selling mega lots before. This means they’ll understand the challenges that they present and can guide you through the processes.
However, you can’t guarantee you’ll find such an agent. In those cases, look to agents who have contacts within the property development community.
Remember who the mega lot will primarily appeal to. If you use an agent who focuses solely on the residential market, you may struggle to find buyers.
Search for a relevant agent and ensure the entire group agrees on using them. Again, this reduces the possibility of conflicts arising later on.
The Final Word
Selling as part of a mega lot isn’t for everyone. There are certain complications involved that you won’t deal with when selling alone. You have to come to group decisions and the whole process can take a lot of time.
However, mega lots do present plenty of advantages. Most find that they can raise the value of their properties by joining a mega lot. Plus, they can help you to appeal to a niche in the buyers’ pool that may not have otherwise considered your property.
Whatever the case may be, you need to maximise the value of your property before you sell. That’s where Archistar Property can help. Head to our property website and enter your details to learn about what you can do to make your property more appealing.