Crucial Stages of Marketing Residential Property - Case Study Example

Marketing Property Running head: A & DISCUSSION REGARDING THE CRUCIAL STAGES IN MARKETING RESIDENTIAL PROPERTY A 10 Page Paper on the Crucial Stages of Marketing Residential Property In APA Style Hellen Engelbrecht Academia Research Writer Marketing Property 2 The following paper will discuss and describe the crucial stages involved in the marketing and finally the sale of a residential property from an agent's point of view. Firstly, how would one define what an estate agent is An estate agent is someone who buys and sells immovable property by the instruction of or behalf of the owner the said property in question. The property involved could be a: Residential property either a freestanding vacant stand, a stand with an erected building or a sectional title unit in a high rise building; Agricultural land; Commercial and lastly Industrial property. The main function of an estate agent is to introduce a prospective buyer to the property they have been given instruction to sell. Thereby earning a commission calculated on an agreed percentage of the final sale price, usually around 6% to 10%. As an estate agent I've been dealing in the property market for the past six months. A few weeks ago, I had canvassed throughout the area I had been given allocated when I had joined the estate agency. I had a special advert flyer printed with all the details of our estate agency's functions, our methods and ethics involved in selling properties and informing the public to contact me as soon as they have a property they would like to sell, because our agency has a fast sale rate, we are efficient, well presentable, professional and our clients investment and future would sit securely in the palm of our hands. We will attain the maximum sale price for our sellers. We always keep ethical obligations towards our sellers, buyers and any other parties involved in the sale, to ensure they are content with the entire agreement and all its processes. I had been contacted by new sellers who were in need to sell their property rather urgently. They were relocating to Europe and amid beginning a new business venture they were in desperate need of their profits earned from the sale to fund a property they had already signed for on a sale clause stating they had to sell their property within one month, or else it will be passed onto another interested party. Marketing Property 3 Without delay, I collected all the necessary documentation I needed to gather all the listing details of their property. A package of documents comprising of: (i) Company Portfolio including all recent major sales performed by our estate agency and myself, the strong ethics our firm stand by, awards our firm have received in the past and any other new developments or mergers our firm may have in the near future and possible factors such as the economic stability, ever changing exchange rate and political situations that may affect the prospective clients property investment value. (ii) A Sole Mandate, so I would hopefully be able to secure my new clients to our firm in a binding contract that will stand strongly and securely so we can be the 'sole' estate agency firm to be able to sell their property and not accidentally landing in any commission disputes with other agencies over any miscommunications. That is why we always push for a sole mandate and if we don't receive one and we can only attain an open mandate, we always inform our clients of every investor we show the property to, to remove any possible miscommunications. (iii) A Comparitive Market Analysis is very important to present to my clients. I'll pack my camera and laptop, so I can access the internet whilst my clients and I are discussing their properties details such as the fixtures, movable items, immovable items, immovable items they wish to add into the sale agreement that they would like to take that item with them, any special servitudes, or outbuildings that may belong to their property and any other items of interest that may cause a dispute or add value to their property. Using all the information acquired by my new clients, I'm able to search our firm's online database and select similar properties recently sold within the same area by the use of my laptop and a wireless internet connection. By comparing details such as the quantity of bathrooms, bedrooms, Marketing Property 4 entertainment areas, lounges, patios and the sizes of the property itself etc of the above mentioned properties to the current property at hand. I am able to present a market value analysis to my clients. Now my clients are able to clearly see the price range their property will be marketed within. "An Informed Client is a Happy Client". I accomplished a sole mandate, so now I can push this sale to our full capacity! Advertising is a very important factor in selling a property effectively! Varying forms of advertising may be employed by a marketer 'The Estate Agent', such as: (i) Newspaper Advertising (ii) Property Guides and Magazine advertisements (iii) Internet websites - search engines, property finders and search sites by areas and countries etc(iv) Window displays (v) Canvassing flyers (vi) Open viewing Show House's (vii) Quarterly Glossy Drops. By successfully advertising my new property, I was able to increase the visibility of the property for sale to a magnitude of national and international prospective buyers. Recently a couple came into our office looking to invest in a new property. Their family was growing, so a larger home with a piece of garden would suit their needs perfectly. I immediately contacted the sellers of my newly acquired sole mandate, told them about the new prospective buyers and organised an appointment for the buyers to view the property. I advised the buyers of the various costs involved in buying a property. I explained to them the following costs involved such as Stamp Duty, the Deposit, Legal Solicitors Fees, Home Insurance and Assurance, Surveyors Fees, Valuation Fees, Life Insurance, and possibly more unforeseen costs such as for renovating their home or damage they may need to take care of prior to moving in. Hunt Online Ltd ( 2006) http://www.huntforproperty.ie had an excellent rundown of the various costs involved. I explained to the buyers that Stamp Duty is a tax that the buyer has to pay to the government when they buy a second hand home. As in the case of my new buyers, they are buying for the second time to upgrade, so they will need to pay the stamp duty. The following table found Marketing Property 5 on House Finder UK (May 2007) "UK Property Law" http://www.housefinderuk.com/index.phpoption=com_frontpage&itemid=1 explains the rates my buyers would be looking at for the value of their new property. The buyers had enquired whether there were any exceptions to paying stamp duty. The following table found on Hunt Online Ltd ( 2006) http://www.huntforproperty.ie explains the following exceptions to the rule: Here are the current levels of stamp duty that you will pay when you buy a house: Up to 125,000* Nil 125,001 - 250,000 1% 250,001 - 500,000 3% 500,000 or more 4% *The stamp duty threshold for non-residential purchases of land increased to 150,000on 1 December 2003. Non-residential property transfers, and residential property transfers up to 150,000, in disadvantaged areas are exempt from stamp duty." My clients had fallen within the exemption rule the previous time they had bought and because this is their second purchase, they also fell short of the exemption rule of the purchase being their first. So unfortunately they would need to pay the stamp duty for the purchase of the new prospective property. I informed the buyers that a deposit requirement of 10% would be needed later in the buying proceedings. The buyers had informed me that they had already saved up around 10% of the purchase price, as they had known when previously applying for their mortgage loan, because by having an excellent savings record and that will prevent the buyers from having to take out a short term loan for the deposit and the least amount of loans a purchaser has on their records the greater chance of receiving a decent mortgage loan in amount and interest percentage. Solicitor fees will also need to be Marketing Property 6 paid. It is worth shopping around for a quality solicitor with affordable fees, as they might even charge you for telephone calls, emails or any other office expense that may arise from the proceedings of your purchase. All the other expenses involved were already known by the buyers due to their previous purchase a couple years back. Once the prospective buyers had a chance to view the property for sale, they immediately loved it. They asked for a second viewing to be arranged and the second viewing 'sealed the deal'. An initial lower offer had been presented, the sellers replied with a counter offer and eventually the buyer's final bid had been accepted. As an agent I advised the possible buyers about an excellent mortgage advisor to help them find a suitable mortgage that will suit their needs and will prepare the necessary paperwork to allow the buyers to get going with the whole process. A good agent remains current with their client's property buying and selling proceedings and regularly informs their clients of any new information regarding the sale. The buyers received a "Letter of Offer" Hunt Online Ltd ( 2006) stating their application had been successful and their new mortgage lender will be forwarding a "Formal Loan Offer" that will set out the conditions of their loan. I had in the mean time advised the buyers of my sole-mandate property of the solicitors they would be working with who will be handling the rest of the sale procedures to follow. Hunt Online Ltd ( 2006) http://www.huntforproperty.ie explained clearly how "the buyers will then be required to place a booking deposit on the property that will confirm the agreed sale property to the buyers. Neither parties have entered into legally binding contract yet to purchase the property; the parties will only be legally bound on the signing of the contracts." I advised the sellers to contact their current mortgage loan bank to begin the cancellation process of their current mortgage bond. I advised them to avoid any unnecessary confusion and unaffordable delays in the sale process, to send a written notice to their current bank. Marketing Property 7 On the receipt of the written cancellation notice on behalf of the sellers, their bank will then begin the cancellation process and calculate their exact cancellation figures. See http://www.standardbank.co.za . The banks attorney is instructed by the mortgage loan manager to handle the cancellation proceedings by requesting the property for sale's title deed and mortgage bond documentation of which arrives promptly if there are no major interruptions. If there are no outstanding fees or interests unpaid by the sellers on their current mortgage loan, the bank will sign consent for the mortgage loan to be cancelled. The bank requires guarantees to be present for the payment and then refunds are finally paid after the cancellation. I organised a meeting for the buyers to come to my office to sign the contracts. At the stage in the buying process, the buyers are now entering into a legally binding agreement for the purchase the property. The buyers will be required to sign a purchasing contract and to pay the balance of the deposit. The buyers had previously asked what the necessary percentage of the purchase price would be needed. Sitting down in our office along with the deposit receipt of 10% of the purchase price and ready to sign the acceptance of the loan organised by the mortgage advisor at the best possible interest rate, the buyers eagerly awaited the signage proceedings. Once all the needed documentation had been signed, all the documentation including the signed offer to purchase by both parties and witnesses, the approved loan applications on behalf of the buyers, the cancellation documents of their current mortgage bond, copies of identification documents, marriage certificates etc had been forwarded to the solicitors to continue with the property sale process. My clients enquired exactly what do the solicitors do once they receive all the aforementioned documentation and how do they earn the money my clients have to pay them I explained the basic steps taken by the solicitor found on Hunt Online Ltd ( 2006) http://www.huntforproperty.ie Marketing Property 8 "Step 1 - Your solicitor will receive confirmation of your accepted offer on the property and a copy of the estate agent's details from the seller's estate agent. Step 2 - Your solicitor will contact the seller's solicitors requesting the draft contract. Step 3 - Your solicitor will receive the draft contract, which is checked for any unusual clauses, and a copy of the deeds that provide confirmation that the property is owned by the seller and any restrictions that apply to its ownership (eg rights of way over the property). Once the contract is approved one copy is returned to the seller for signature. One copy is kept for you to sign. Your solicitor will also usually receive details from the seller about matters such as boundaries, disputes, guarantees, alterations to the property and a list of fixtures and fittings to be included in the sale. These documents will be explained to you and you will be given copies. Step 4 - Your solicitor will carry out a search with the relevant local authority, which asks for details on proposed road development in the area, relevant planning applications etc. Step 5 - Once you have received the results of your property survey, and are happy with the information that the seller has provided you need to sign your part of the contract and return it to your solicitor. You are now ready to exchange contracts [unless and until this happens you are not legally bound to go through with the purchase]. At exchange the seller will usually insist that you pay them a deposit as a sign of good faith. This is usually 5-10% of the purchase price. You will need to let your solicitor have this money a few days before exchange if it is being provided by cheque. The deposit is usually held by the seller's solicitors in a special account. Step 6 - Exchange of Contracts - Your solicitor and the seller's solicitor agree (usually on the telephone) that contracts are exchanged on your purchase and they fix the completion date [the date on which the property will become yours]. The relevant dates are inserted in the two copies of the Marketing Property 9 contract and these are then physically exchanged, together with the deposit cheque to the seller's solicitor. Step 7 - After exchange your solicitor will carry out further searches to ensure the property details provided are accurate and to ensure the seller is not bankrupt. Step 8 - If you are obtaining a mortgage then your solicitor will also have been liaising with your mortgagee. They will prepare the Mortgage Deed [the document which gives the bank or building society a charge over your new house] for you to sign and report to the mortgagee requesting the mortgage advance in time for completion. Step 9 - Your solicitor will calculate the sum needed from you to complete the purchase, including the balance of the purchase monies, their fees, stamp duty (if applicable - only over 120,000) and Land Registry fees. You will need to provide them with this sum before the completion date. Step 10 - Completion - On the day of completion the balance of the purchase price is sent electronically to the seller's solicitor's bank by your solicitor. Once it has been received by them the purchase has been completed and they should advise the agents to release the keys to the property to you. The deeds to the property are sent to your solicitor. Step 11 - After completion your solicitor will pay any stamp duty payable, register the transfer with the Land Registry and forward the title deeds, when received back from the Land Registry, to your mortgagee (if you have a mortgage) or to yourself." During the transfer process of the properties from the sellers to the buyers, I kept close attention to the happenings, I regularly checked with the solicitors how far along the process was, what still Marketing Property 10 needed to be done to hurry the process on, who was waiting for whom. If I could do anything to push the sale time, I did especially because my clients desperately needed the profit from their sale for the purchase of their new property. The signed offer to purchase was enough evidence for the sellers to secure the property they had already signed for relying on the clause of the sale of their own property. The buyers were eager to move into their new larger home and obviously I would receive the commission due to me for mediating the sale process and introducing the purchasers to the sellers. Finally one warm day in autumn the solicitors involved and the bank informed me that the sale had gone through smoothly and the new owners may move into their new home. I contacted all the parties involved, thanked them for their patience and cooperation and congratulated them on a successful transaction. The Critical Comment I would like to make on whether I think Home Information Packs for residential property in England and Wales will assist the sales process. Well, if all persons living in England and Wales were informed about the general state of the country and all the necessary information that will allow them to make an informed decision on the sale of their property or the purchase of a new investment or home it will allow the seller to be able to make informed decisions regarding whether they should sell their property or wait for another time and the for the buyer to know what kind of property they will be able to afford in different areas, whether it is a small apartment in an upmarket city centre or a quaint cottage filled with period features and bedrooms on the outskirts of a smaller village within an hours commute of the city centre, it will save a lot of time and effort on behalf of an estate agent of whom needs to try to explain why the buyer can't afford a property of the criteria they are looking for in a specific area or that the seller will not receive the amount they are asking for their property on the poor state their home is in or just that the asking price is too high, and they would sell it a lot faster if they dropped the figure to a more realistic amount or were up for offers. Marketing Property 11 Information packs informing the user of various statistics regarding their area, the values of recently sold properties in their area, crime rates, and appearances of their town or village and how the whole sale process works. Possibly a lot more people of whom rent will not be so scared to buy and those who need to sell may be able to make necessary adjustments and improvements to their property to either increase the sale price for a higher profit or just make it sell faster. A home information pack will definitely improve the knowledge of the home owners and prospective owner. REFERENCES Hunt Online Ltd ( 2006) http://www.huntforproperty.ie House Finder UK (May 2007) "UK Property Law" http://www.housefinderuk.com/index.phpoption=com_frontpage&itemid=1 Standard Bank (May 2007) http://www.standardbank.co.za/SBIC/Frontdoor_02_01/0, 2354, 176061_1941379_0 4PRO406 Sales Practice and Marketing COURSE WORK 2 For Haris Middleton Essay (approximately 2000 words) "Discuss and describe the various crucial stages in the sale of residential property from an agent's point of view from original instruction to marketing a property through to eventual completion". Critical comment (approximately 400 words) "Do you think that the Introduction of Home Information Packs for residential property in England and Wales will assist the sales process" Your completed assignment is to be handed in at the undergraduate office on or before 2 May 2007. This assessment accounts for 50 per cent of the total assessment for the module. Students who hand in work late will be penalised in the marking, which will form part of the final assessment for this module. You are reminded to retain a copy of your coursework submission in the event that the original goes missing. Performance criteria are; The principles involved The layout and logical progression Communication skills Conclusions reached. Self-reflection Using the form below, to be submitted with your work, reflect on the sources of information you have used to write your essay, which have you found to be the more useful and why Name: "I found that Hunt Online Ltd ( 2006) http://www.huntforproperty.ie had been extremely informative. The website laid out the full procedure of selling a house step by step. Full descriptions of the various stages and up to date fee structures,percentages and even exactly what the solicitor does throughout the property transfer process. The official Standard Bank (May 2007) website, explained all the details one needs to know about the procedures of the banking side of the transfer process." Attach this page to the coursework Read More