A Bali Policeman pulls over a speeding motorist near Ubud. He walks up to him and says

“Can I see your real estate license, please?”

The driver responds “Don’t you mean my driver’s license?”

“No,” says Bapak Polisi “Not everyone in Bali has one of those.”

Talking about too many real estate agents. If they all would be ethical and interested in your benefits, no need to come up with jokes like this.
I am sitting here and think about what I can do to contribute anything meaningful for our clients today?
I shall write my idea down now, maybe to go with the next monthly newsletter.  Just to say again a ‘thank you’ to our buyers and vendors. ‘Thank you kindly for your trust.‘
As in the month’ before, we will now talk a little about the business of property buying and selling. Today mostly the vendors may find some useful morsels in and between the lines.

Please note, all the important, but dry details about exactly how to buy, how to sell, regulations, expenses, tax issues, the law covering land transactions, and more, all this you find in sufficient detail on our or other’s websites.

However, what is often left out, is background knowledge about how to get the best deal for both, buyers and vendors. There is actually no contradiction. Both can get the best deal out of the same transaction. This is what we are looking into over the next few minutes, all based on what my colleagues have been successfully been doing hundreds of times over.

By the way, to the good people, who are sometimes referred to as tyre kickers, I say: ‘sorry, but today there is nothing in it for you’. Here and today we just have an exclusive exchange between actual sellers, buyers and me, the property guy.

Maybe when reading on, a buyer may think; ‘Ooops, this is not for me, I am not interested in vendors good fortune.  I’m here for getting a real good deal myself.’ Hang in, all becomes clear soon, because the same as in real battle it pays to have your spies behind the enemy’s lines, right?  
Come on you prospective buyers, we take a look at what clever vendors would do…

You see, for example in the US there are exclusive vendor’s agents and also specialized buyer’s agents. Here in Bali you deal with a hybrid, who is balancing the act of doing the best for both parties. To do so openness and honesty are essential, together with a high degree of professional knowledge, experience in the often complex local regulations and a profound understanding of what both parties expect and need. We believe to do just that, it is the firm concept of our way to serve.

In any case, each vendor wants to know ‘How to sell above market value’.
There is much more to it, that fits into a small report like this.  If you are really seriously interested in the art of preparing your place for a good sale, let me know. We can cover this in detail in another issue. Today we just deal with basics.

And for you the buyers: - be aware, that the following is usually embedded in the mind of the vendor and you do well to understand this.

I’m now going to take the vendors through a proven process of what needs to happen to sell above market value regardless of where you are located here in Bali, or your reason for selling. The first, and probably the most important thing to know is that you only get one shot at this.
In a few weeks or months from now, you’ll be thinking one of four things when it comes to the sale of your property.
1.     You’re still on the market and no closer to a sale. It’s stressful and frustrating. What next?
2.     You’ll think it was one of the worst experiences of your life. You sold too cheap and the buyer got a bargain at your expense.
3.     You’ll be indifferent. You got a sale and the price was reasonable, but “really should’a been better”.
4.     Or you’ll be delighted at the price and the terms your agent secured on your behalf. It was not only a great real estate selling experience, you’re confident the maximum price was achieved.
I’m sure you’re looking for number four, so in order to do that, I’m going to explain what needs to happen between now and then to help you get there.

Logical versus Emotional.
It’s common knowledge inside the real estate industry that a property will sell for somewhere between a logical price (the low end) and an emotional price (the high end).

Let me explain. Establishing the likely selling price for any property is largely based on recent sales evidence of similar properties sold in the area. Because here in Bali there are only few restrictions regarding style, building structure and usage of the land, very few properties are alike and suitable for such straightforward comparison.  
However, simple logical evaluations are possible and based on location, land size, building size, estimated construction cost per sqm and maybe value of access road, inclusions, etc.  Such logical calculations are do-able within one hour, even if we did not quite finish our brain-surgeon studies.  
By the way, we do this almost on a daily basis for our clients.  Totally free of charge.  Call 0361 970 888.

It is reasonable to assume a home will most likely sell for a similar price to a similar recent sale. That’s the logical conclusion of such current market analysis exercise. But what about a home that hits the market and immediately creates a ‘buzz’? This villa or home might not differ much from other recent sales of similar properties nearby but it has a special WOW factor that has maybe several buyers tripping over each other to make an offer.
Such a home will usually sell quickly and for a surprisingly good price that defies any logic. That’s what we call an emotional price and any seller, armed with the right advice and information, can achieve the same result.
Don’t be confused by the word ‘home’. My definition of a home is any residential dwelling where one can live, like a simple joglo, a ‘fixer and upper’ in any stage, a tiny bungalow, a cottage in the paddies, a chalet in Sayan, a sprawling mansion in Sebali.
A home is any place you permanently lay your head and enjoy security and protection from the elements. It’s where you retreat after probably many years of your working life and celebrate your victory. It’s where you protect your loved ones and get together with friends. No matter where you live or who you are, your home is your castle, which is why it evokes so much passion and emotion and why this aspect is almost impossible to value.
There is no other investment so essential to our needs, with the potential to increase in value over time like real estate. Look around. Your car, your clothes and your phone begin losing value a minute after purchase. But not real estate, which is why good property is always in great demand.
This makes the initial price decision very important. It also changes which selling method and process you’re going to go with. Selling above market calls for an experienced local agent who knows what to do, including which buyers to target, how long the property should be on the market and the ideal pricing strategy.

Don’t attack this by yourself.  Can I suggest you team up with your agent to prepare your home for market?
Here are four reasons why:
Pricing and positioning.    Your agent will be able to assess your likely selling range from recent comparable sales in your area and work with you to arrive at the best selling strategy, including evaluation of the emotional factors.
Resources.    Your agent will not only know what needs to be prepared prior to your campaign commencing, they will usually have access to the best contractors and tradespeople. A good agent will work with you to help you leverage their connections to get proven reliable contractors for renovation, if so needed.
Operational Skill.    The sale of real estate is a living and breathing thing. From the moment your marketing campaign begins through to contract and handling special buyer’s requirements, such as application for B&B licence, upgrading power supplies, etc, you need an experienced operator in your corner, fluent in every aspect of the process and ready to act and advise you when required.
Navigating numerous negotiating possibilities.  A good agent earns their fee for-service by helping you through the critically important negotiating process. So many potentially great outcomes are sabotaged at negotiation because of poor decisions and the wrong advice. Will you be negotiating with one buyer or could it be more than one? An experienced agent will give you a very valuable edge when it comes to negotiating a sale above market, because they know their sales reputation is only as good as the price they achieved for their last client.
 
The good agent also will soon pick up in detail what the buyer really wants and can afford. He will be able, based on this assessment, to suggest why a certain villa may suit more than others already seen and therefore help to clear the clutter in the buyer’s mind. The price point will be discussed. “Why is a premium price maybe justified and add significant capital gain in the future?  Sometimes a price turns out to be unrealistic, for example should a major development come up near by, which during construction will reduce value, but might increase again, once the project is running.  The vendor, helped by his agent, is well advised to be price-flexible in such circumstances.

When you engage real estate buyers with a positive emotional viewing experience, amazing things happen!
They assess the logical price and add some for the emotional factor.  A factor, which is long forgotten by the vendor, because over time the awesome view becomes ‘normal’ and the fancy indoor-outdoor bath is something, ‘which is just there’, same as the constant breeze coming in from south east. ‘We like it, but it’s been always like this…’. For the vendor there is no strong emotional value attached any more.
– However, for the new buyer…, besides the actual impressions on inspection he can see real money earning points, which count well when possibly selling on again one day.

Now here is where the agent’s observation kicks in.  If these values appeal to the buyer, the agent will help evaluate these characteristics in comparison to other objects. For example, he also can advise, why a border on a slope or small water flow adds a good measure of value to the land and about how much, when it comes to a re-sale. Why, for example, a certain kind of nearby temple is more often frequented than others, resulting in many noisy ceremonies.  Such details can one day make or break the enjoyment of the home and effect it’s value.
Whereas vendors often leave to “go back”, buyers are here for long. The agent understands that there is either an enthusiastic supporter who spreads praise for the agent or someone who regrets not having selected the likely best local agent for purchasing advice.
Our buyers are indeed as close to our hearts and minds as the vendors who give us their fee.
And oh, that may be interesting – please ask us to show you references from others before you. They say a lot about how for example, we jointly solved problems which sometimes turn up unexpected.   

If you, as vendor, like to find out exactly how to go about making your property irresistible to buyers regardless of current market conditions or where you’re located, then keep reading.
Believe me, selling real estate for a client is not for the faint hearted. We’re talking large amounts of money that, in many cases, will have a major impact on the next phase of the owner’s life.  We’re also talking about managing expectations and having the marketing ability to change course quickly if necessary. The marketing of any property is essentially a campaign that needs constant monitoring and guidance. It’s never a set-and-forget proposition.

When is a property for sale most popular? Some owners believe the longer a property is on the market, the more buyers over time it will attract. Not true. In fact, as a general rule, I believe, the longer a property is on the market past the average time-on-market in the area (presently 6-9 month around Ubud), the less it will sell for.
Let me explain. Real estate is most appealing to buyers when it first hits the market. This is the ‘Golden Window’ and usually the first two or three weeks will produce the highest level of genuine buyer enquiry. That’s because real buyers who have been actively looking to buy, are ready to pounce on a suitable property fresh on the market. In contrast, a home that’s been sitting on the market for months generates little appeal.
What buyer is attracted to a property no other buyers want? Hitting the market ‘fresh’ with an attractive proposition is critical to success. Removing an optimistic and often unrealistic ‘for sale’ price encourages buyer response and, in many cases, results in an impressive end result.

There is no recommended retail price. Unlike almost anything you can think of, real estate has no specific recommended retail price. That’s its special power and means every seller, armed with the right information and support can influence his or her selling price, every buyer can deduct the emotional factors and point out through his agent, that he is here mainly for getting a good deal…  and then the agent comes in and brings both opposing minds to the table. More often than not, we reach afterwards for the sticker  SOLD to put over our window display.

What we did not talk about yet, are so called ‘fire sales’ or picking up an almost impossibly good bargain. This usually relates to land purchase. Such lucky buy almost never comes up.  Why so?
In Western Countries Papa and/or Mama make a decision when such urgency calls, set a price and go for the sale.
Not so here.
A fire sale, maybe by a Balinese family, who has to cover a major ceremony or event, is long debated by the family before the sales decision is finally made. We are dealing with a seemingly unfair imbalance of brain power.
The Balinese will win, because there are just so many more brains involved. All the important decisions within a family are usually made by joint consensus of the clan.  From grandpa to the grand children, brothers, nephews and nieces, near all contribute their opinion, often based on which cut they get out of the deal and wishful thinking about achievable sales prices in the area.
Indeed, there is a formidable brain assembly to deal with.   
Many good land deals would have been impossible, if our office’s local sales person would not have been able to talk directly with the joint vendor’s assembly and bring them to reason.  Nevertheless, real fire sales are as rare as hen’s teeth.

Those impossible attractive bargains, maybe due to an acute health drama, are usually quick detected by the local head of village, or local LPD (Lending and Saving Co-op).  They purchase the bargain with a loan and sell on at higher price, or pass the deal on to wealthy partners against a healthy markup share or commission.  Hoping to pick up such a bargain is like waiting for rain in the Sahara.
Who ever has seen a bushfire in Australia’s eucalypt forests, where, because of the oil content in the leaves, the flames jump in seconds from tree to tree, understands what I mean.  Let’s forget that, you will be too late.

Finally, I hope you picked up one or the other reminder about the essentials when selling and purchasing.
After all, even in the age of google and instant research results, it will pay to realize that an experienced local agent is the best tool to achieve an outcome, which is specially tailored for you. We’d like to see you happy and proud and enjoy telling others about how it all went.   

Yours very truly –

Ray for UbudProperty