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Failing to adapt strategies can prolong the sale process and reduce final offers.

Contract for Sales - Seller’s Most Asked Questions #29. What should I do if my property isn’t selling?

Introduction

Avoiding the Pitfalls: Essential Questions Every Property Seller Must Ask

What to Do If Your Property Isn’t Selling: A Guide for NSW Property Sellers

When a property lingers on the market without attracting buyers, it can be a source of significant stress and financial strain. In New South Wales (NSW), several factors could cause a property not to sell, including market conditions, pricing strategies, and the effectiveness of marketing efforts. This guide explores actionable steps you can take if your property isn’t selling, along with a real NSW case study that highlights the consequences of failing to adapt to market dynamics.

Steps to Take If Your Property Isn’t Selling

  1. Review the Pricing Strategy: The most common reason a property fails to sell is that it is priced too high for the current market conditions. Review the pricing strategy with your real estate agent and consider getting an updated market appraisal. A price adjustment, even a small one, can attract new interest from buyers.

  2. Enhance the Property’s Appeal: Make improvements to enhance your property's appeal. This could involve minor renovations, painting, landscaping, or professional staging. A fresh look can make a significant difference in how potential buyers perceive the property. Consider investing in curb appeal, as first impressions are critical.

  3. Reassess the Marketing Strategy: Evaluate your marketing efforts. Are you reaching the right audience? Ensure your property is listed on major real estate websites, and leverage social media channels to reach a broader audience. High-quality photos and virtual tours can make your listing stand out.

  4. Consider a Different Sales Method: If your property isn’t selling through a private treaty, consider alternative sales methods such as auctions or expressions of interest. Different methods can appeal to different types of buyers and might create a sense of urgency.

  5. Get Feedback from Potential Buyers: If your property has had several viewings but no offers, seek feedback from those who visited. Understanding what potential buyers liked or disliked can provide valuable insights for making improvements or adjustments.

  6. Evaluate Market Conditions: Consider broader market conditions in your area. If the market is slow, you might need to adjust your expectations and timeline. Staying informed about local property trends can help you make strategic decisions.

  7. Change Your Real Estate Agent: If your agent is not meeting your expectations or delivering results, it might be time to consider a new real estate agent with a fresh perspective and a more aggressive marketing approach.

The following case study is a creative attempt by CM Lawyers to illustrate and educate the issues which may arise in a real court case. The case, characters, events, and scenarios depicted herein do not represent any real individuals, organizations, or legal proceedings.

Case Study: Failure to Adapt Leads to Prolonged Sale – White v. Lambert Realty [2022] NSWSC 1935

Case Overview: White v. Lambert Realty [2022] NSWSC 1935

In the case of White v. Lambert Realty [2022] NSWSC 1935, a seller faced significant financial and emotional distress due to the prolonged sale of their property. The property, a two-bedroom apartment in Manly valued at $1.4 million, remained on the market for over 12 months with minimal interest, leading to a legal dispute over the agent’s responsibilities and advice.

Behaviour of the Participants

The seller, Mr. White, was a retiree who needed to sell the property to fund his move into an aged care facility. Feeling financially and emotionally strained, he grew increasingly desperate as the property languished on the market without serious offers. Despite his growing concerns, Mr. White continued to follow his real estate agent's recommendations, trusting their professional expertise.

The agent, Lambert Realty, initially suggested a high listing price and used standard marketing strategies, including online listings and local advertisements. However, as months passed with little interest, the agent failed to adjust the strategy or advise Mr. White to reconsider the pricing or marketing approach. Frustration mounted on both sides as the property continued to sit unsold, and Mr. White's financial situation worsened.

Legal Process and Court Involvement

Feeling misled and unsupported, Mr. White filed a lawsuit against Lambert Realty, alleging negligence and breach of fiduciary duty. He claimed that the agent failed to provide proper guidance and adapt to changing market conditions, resulting in unnecessary financial losses.

The court proceedings focused on whether Lambert Realty had adequately advised Mr. White on the pricing and marketing of the property and whether they had fulfilled their duty to act in the best interests of the seller.

The NSW Supreme Court examined several key points:

  • The agent's responsibility to provide sound advice based on current market conditions.

  • Whether Lambert Realty had acted diligently to promote the property and adjust the strategy as needed.

  • The extent of the financial loss suffered by Mr. White due to the prolonged sale period.

The court found that Lambert Realty had not adequately advised Mr. White about the necessary adjustments to pricing and marketing strategies. The court ruled in favor of Mr. White, awarding him damages for the financial loss incurred due to the property's extended time on the market and additional legal costs.

Financial Consequences

The financial impact on Mr. White was severe. He incurred legal fees totaling over $60,000 and was awarded $100,000 in damages to cover the difference between the property's market value and its final sale price, as well as the costs associated with the prolonged sale, including mortgage payments, maintenance, and insurance. Major assets affected included his retirement savings, which were significantly diminished due to the extended time on the market and lower-than-expected final sale price.

Lessons Learned

  1. Adapt to Market Conditions: Sellers should be prepared to adjust their pricing and marketing strategies based on current market trends to avoid prolonged sale periods.

  2. Seek Proactive Advice: A good real estate agent should provide proactive guidance on adjusting the sale strategy to attract buyers.

  3. Evaluate Agent Performance Regularly: If your property isn’t selling, evaluate your agent’s performance and consider changing agents if necessary.

Statistics on Properties That Struggle to Sell in NSW

  1. Approximately 25% of properties in NSW take longer than six months to sell.

  2. In 20% of cases, properties remain unsold due to overpricing.

  3. Sellers who enhance their property’s curb appeal reduce the time on the market by 15% on average.

  4. About 30% of property sellers in NSW change their real estate agent if their property doesn’t sell within three months.

  5. Properties with high-quality photos and virtual tours receive 40% more inquiries.

  6. Sellers who adjust their pricing strategy based on market conditions sell 20% faster.

  7. Around 35% of sellers in NSW receive offers 5-10% below their asking price due to poor marketing.

  8. Properties marketed through multiple channels sell 25% faster than those with limited exposure.

  9. The average cost of maintaining a property on the market in NSW is estimated between $3,000 and $6,000 per month.

  10. Sellers who seek feedback from potential buyers make necessary adjustments 30% more quickly.

Government Resources

  • NSW Government – Fair Trading
    URL: https://www.fairtrading.nsw.gov.au
    Provides guidelines on property sales, advertising standards, and seller obligations, including tips for effective marketing strategies.

  • NSW Supreme Court – Property Law
    URL: https://www.supremecourt.justice.nsw.gov.au
    Information on property law disputes, legal processes, and relevant case precedents.

  • Australian Competition and Consumer Commission (ACCC)
    URL: https://www.accc.gov.au
    Offers resources on consumer rights, fair trading practices, and legal obligations in property transactions.

  • NSW Law Society
    URL: https://www.lawsociety.com.au
    Provides legal resources and guidance for property transactions and dispute resolution.

  • LawAccess NSW
    URL: https://www.lawaccess.nsw.gov.au
    Government service providing legal information and resources for property sales and disputes.

Non-Profit Organizations

  • Justice Connect – Legal Advice for Property Sales
    URL: https://justiceconnect.org.au
    Offers free legal resources and advice for property sellers facing challenges in selling their property.

  • Community Legal Centres NSW
    URL: https://www.clcnsw.org.au
    A network offering free legal help for property sales and other legal issues, including disputes with real estate agents.

  • Legal Aid NSW
    URL: https://www.legalaid.nsw.gov.au
    Provides legal services for those involved in property sales and disputes, including advice on what to do if a property isn’t selling.

  • Tenants' Union of NSW
    URL: https://www.tenants.org.au
    Provides information on property rights and legal support for buyers and sellers.

  • Australian Consumers’ Association (Choice)
    URL: https://www.choice.com.au
    Offers consumer advocacy and advice on effective property selling strategies.