You were selling property off the plan before settlement can be tricky. The biggest hurdle is building confidence with your buyers purely based on a promise that you will deliver the project on time and to the right specifications and standards. It's a tall order even for experienced property development consultants and sales agents. In this article, You're going to see some tips that will position your properties to build confidence and trust with your buyers to ensure you maximise every sale. However, before we get stuck into the tips, let me explain why the best time to sell your properties as a property developer is off the plan.
Here's the dream scenario …
You get all your properties sold off the plan before construction is completed. Then as soon as construction is finished, you have subdivision approval (because you're a kick-ass developer). And your new properties' titles have been registered, so your solicitor can arrange a settlement with the buyers. All of that means you get paid straight away upon completing your project.
Selling Property Off The Plan
Get up to speed on subdividing property between Melbourne and find out if you can subdivide your property. But, first, let's get into the seven off the plan sales tips that will help you knock your sales out of the park.
Get The Best 3d Render Set Possible.
If there's ever a place to spend money on maximising the plan sales before settlement, it's on these renders. Because renders sell, it's as simple as that. They need to be the highest quality you can afford. Granted, renders can be expensive but let me assure you an unsold empty development is way more costly.
FAQs About Pre Selling Construction Homes
If your lender determines you are financially qualified to maintain two mortgages, you can begin building your home regardless of whether or not you have sold (or have plans to sell) your existing home. Another option is to rent out your existing home once you move into a new home.
The term spec house refers to a house built for the sole purpose of selling for a profit. As far as investment dynamics go, building a spec house is a close cousin of fixing-and-flipping houses.
Selling new construction takes additional skills than selling an existing home.
- Know the language. Be able to speak and understand the jargon of builders. ...
- Identify Your Buyers. Understand the buyers you are selling to, and cater towards them.
- Ask About Financing.
- Stage to Perfection.
- Start with a few simple projects that are also affordable.
- Clean Up the Yard and Clear Out Clutter.
- Small Changes Make a Big Difference.
- Bring Up Renovation Loans in Your Listing.
- Highlight Your Home's Features.
- Price it Right: The Best Way to Sell a Home that Needs Work.
Killer Marketing Brochure
A high-quality marketing brochure is another non-negotiable when selling properties off the plan. This is where you put the kick-arse renders you've just had done up in lights. It's also a good idea to include as much other relevant information as you can. Think floor plans, information on the local area, the best cafes nearby, a map with neighbourhood parks, shops and amenities, the projects fixtures, fittings, finishes, information about yourself, the builder and other project collaborators.
The more information, the better. Remember, it's all about giving your buyers confidence. Think about it. If you dish up sub-par renders with a crappy brochure print-out (like the one's agents supply for free as part of their service), how can you expect buyers to believe you can execute and deliver a killer development? You can't. It's like a used car salesman who drives a clapped-out bomb, and they lose all credibility. So, you have the high-end renders and a killer marketing brochure next up.
Watertight Inclusions Documentation
Hopefully, you've been following us here at the Fish for a while now, and you are aware of the importance of engaging a quality interior designer for your development. Let's assume you have. Ask your interior designer to provide a presentation document. In addition to the standard fixtures, fittings and finishes stuff required for the construction documentation. This might be an additional cost, but it's well worth it.
A presentation document is a supplementary document where your designer explains the inspiration and thoughts behind the design. Inspiration, your agent, can use to accompany your marketing brochure. It will help explain all the thoughts and considerations of your project. And why it's a great opportunity to purchase off the plan.
Mood boards or trays are great marketing assets for your agents to leverage. It's no secret people love to touch and feel things, and given your buyers can't touch and feel the property you're trying to sell, a creative mood board can make a big difference. It's a selection of the most important fixtures, fittings and finishes. These boards and trays are other areas where your interior designer's hard Work gets put up in the light.
Onsite Marketing Banner
Erecting a hoarding on the boundary of your development site with an awesome marketing banner is another place you get your renders up in lights. It's another touchpoint (the more touchpoints, the better!) you can leverage when selling property off the plan before settlement. So as soon as your site has been demolished. Pick the best spot to get a hoarding built and add a professionally designed marketing banner promoting the sales of the properties, including your agents' contact details and the property particulars.
Clean And Tidy Sites
Make sure your site is clean and tidy at all times. When you engage your builder, you need to make a point of it. If a potential buyer does a walk or drive by to check out the site and its progress and they see a messy site, it will not give them too much confidence around what they can expect the finished product to look like. It might not even be a conscious thought. It doesn't matter. There aren't too many free hits when you're selling property off the plan. This is one of them, so make sure you take full advantage of it and have your builder execute the site's presentation accordingly.
Select The Right Agent
Selling property off the plan is nothing like selling a normal house or apartment. The only similarity is the selling part. Everything else is different, so you need to find the best off the plan property sales specialist you can in your area. By specialist, they need to have a proven track record. Off the plan, sales need to be their primary focus.
All agents aren't equal, and it's horses for courses. Your chosen agent should understand your project inside and out. They should read plans and remember room sizes, fixtures, fittings, and finishes all off the cuff. If your agent builds any trust or confidence with your potential buyers, they need to be all over this stuff. It's critical. If the agent needs to call you the property developer or the builder every time they get a tricky question from a buyer, the buyer's confidence will instantly start to plummet at a rate of knots. So, don't get caught up in all the bright lights of flashy agents. Instead, take your time and research to make sure you find the best and most experienced off the plan sales agent in your area.
Steps To Selling A Property
Get yourself and your property prepared for the sales process. Before your property goes up for sale, tackle any reasonable home maintenance issues and simple renovations to maximise your chances of selling. It also helps to clear out and present your property in its best possible way. It might also be worth researching recent sales in the local market to get an idea of the sale price you might be able to achieve. Downloading an AMP property report could help with this.
Choose A Real Estate Agent.
They ask your family and friends for recommendations that can help when choosing a real estate agent. You can also try attending open homes to scope out local real estate agents and get a first-hand view of their sales techniques. Once you have a shortlist, interview several to help you find the best fit. Be sure to ask about their charges upfront, and don't be afraid to negotiate. It's also important to check that they have a valid licence and a good knowledge of your area before signing up with an agent.
Pick A Sales Method And Set A Price.
When you decide to sell your property, you'll need to choose a sales method. Two common types of sales methods are private treaties and auctions. Your real estate agent can advise what works best in your local area, your property type, and the current market conditions. They can also advise you on what your property may be worth and help you set an asking price (in the case of a private treaty sale) or establish a guide price (in the case of an auction).
- Private treaty
- A private treaty can enable you to have a longer sales campaign and more time to consider offers on your property from potential buyers. But there's a risk that if your asking price is too high, your property won't sell, and if it's too low, you may miss out on maximising the price.
- Auctions create competition between buyers that can drive the sale price up. However, they can be riskier as you never really know how interested buyers are or how much they think your property is worth until the auction day.
Formalise The Agency Agreement
The agency agreement is the contract between you and your real estate agent. It covers whether they have exclusive rights to sell your property and for how long, their fees, any additional costs such as marketing (online advertising and 'for sale' boards) and administration fees. Before signing, you can suggest alterations to the agreement as part of the negotiation process. If you're not sure about any of the information in the agreement terms, you can consider seeking legal advice.
Prepare The Vendor's Statement And Contract Of Sale.
The vendor's statement (also called Section 32) is used in some states. This is a legal document explaining whether there's a mortgage on the property, any covenants that would restrict what the owner can do with it, any easements the land is subject to (drainage, rights of way, or power lines, for example), council zoning and associated declarations. You'll likely need to hire a conveyancer (a property law specialist) or solicitor to prepare the vendor's statement. They'll also need to prepare the contract of sale, which must include the title documents, drainage diagram and a current planning certificate issued by the local council.
Inclusions and exclusions must also be outlined within these documents. For example, standard inclusions in property sales include fittings and fixtures such as fixed floor coverings, light fittings and window coverings.
These details vary for each state. You can find the exact requirements for buying and selling property via the government's information and services website.
The Sales Campaign
The sales campaign involves:
- Get your property ready to be shown.
- I am taking your marketing photos.
- They were holding open homes, which your real estate agent will coordinate.
Generally, sales campaigns last 4-6 weeks1, and it's worth making sure your property is in a sellable condition before the campaign. Otherwise, it can cost you time and money.
Securing A Sale
- Private treaty
- Under a private treaty sale, once an offer is accepted, you and the seller exchange signed copies of the contract of sale, and the buyer pays a deposit. The buyer usually has a cooling-off period to withdraw from the sale. The cooling-off period can vary, so be sure to check how it applies in your state or contract for sale.
- If you're selling by auction, the buyer is the person who bids the highest price on auction day, providing that amount is above your reserve price (the minimum amount you're willing to sell your property for).
If bidding doesn't reach your reserve price, your property is passed in – which means you're opting not to sell the property for the highest bid that was achieved at auction. However, a sale may be negotiated later between your real estate agent and one of the bidders.
If the property is sold at auction, the buyer must sign the contract of sale and pay the deposit immediately. There is no cooling-off period, even if the property is passed in but sold by negotiation later on the same day.
Discharging Your Mortgage
If you've got a mortgage on the property, you'll have to arrange for it to be finalised before settlement. This involves giving your lender a completed discharge of mortgage form. To discharge your loan means you (as the lender) are removed from the property's title. Discharging your mortgage is a good way to avoid any delays in settlement of your property. The process can take several weeks, so it's important to make arrangements with your lender shortly after you've exchanged contracts of sale. There are usually costs involved in discharging a mortgage. You may want to contact your lender before you put your property up for sale so that you can be aware of any costs and the process involved.
Settlement usually takes place six weeks after the contract of sale is exchanged and is overseen by your conveyancer or solicitor. This is when you receive the full sale price – minus the deposit, the amount owing on your home loan (which is paid to your lender), your conveyancer or solicitor's fees and your real estate agent's charges. Once settlement has occurred, the sale is concluded, and you'll need to move out immediately.
Buying Off The Plan
Purchasers should be aware of their rights when buying off the plan or buying not registered land. If you are thinking of entering into a contract to buy premises not yet built, please take the following steps:
- Exercise caution and obtain appropriate legal or other advice before signing any documents or paying any money
- Look Out for clauses that allow the developer to rescind the contract after you have exchanged
- Know what you are signing. before signing a contract, ask the following questions:
- Are there separate contracts for purchasing the land and construction of the house?
- How do those two contracts interact?
- Will there be additional costs or penalties if there are delays to building start dates?
- Remember, there are no price guarantees until you have exchanged contracts.
These are just some of the lengths our development team and we at Little Fish go to. Especially when selling property off the plan before settlement. If you take all of the seven tips on board, they'll give you the best possible chance to sell your dwellings. No matter what state the market is in. In all honesty, if you get them all right, you can expect to be selling your properties consistently above the market value. We take selling property off the plan before settlement that serious here at the Fish that we run a live blog post on our website for every relevant project. It's a place agent's can send buyers to follow along with the project's progress.