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July has been fairly busy away from the auctions!

All smiles from Andrew Hayne, the vendor and winning bidder as 5 bidders battle 17 McKinley Malvern out under the hammer to $4,980,000 in front of a crowd of around 200

All smiles from Andrew Hayne, the vendor and winning bidder as 5 bidders battle 17 McKinley Malvern out under the hammer – to $4,980,000 in front of a crowd of around 200

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Hello and welcome back to James Buyer Advocates Marketnews.

A few auctions of note today on very small numbers as the market awakes from its traditional Winter auction slumber.  We have covered 19 in our reporting;  was 2.4 bidders per auction and the $M+ James Clearance rate was 74% – even though a small sample, we think it’s an accurate reflection of where the market is at right now.

What we saw today at the middle level market ($3m-$7m) is best summed up at the 17 McKinley St Auction – which we rated James Home Rating 800/1000 – click here

Big crowd and so there should be with the Malvern Master – Andrew Hayne running proceedings. I went through this home earlier in the campaign and thought it would struggle to get to $5m, because of the neighbours and look from the front – but I felt it would have significant interest in the $4m’s due to its size, location, quality of living spaces and of course lack of stock.

And so to the auction – away with a vendor bid of $4,000,000 from Andrew Hayne and bang $500,000 thrown on top of that by Bidder One – impressive. Andrew said the next bid should be $5,000,000 on that basis – nice try big fella. Bidder Two went up an hundred thousand bringing a similar response back from Bidder One and we were at $4,700,000. A third Bidder joined in with $25,000 and the action slowed – prompting Andrew to say to Bidder One if you bid again I will put it on the market. Bidder One responded saying it was already on the market, bringing a wry smile from the man in charge – as we all knew Bidder One was right. We went in $5s, $10s and $20’s and gathered in two more bidders before Bidder Three won the day at $4,980,000 – a strong but unsurprising result given all things in the market right now. All were local Bidders. Mal James

What do we make of the current market – where are we at after the holiday break?

We think we are pretty well exactly where we were at, at the start of 2016.

Right now we have a stock shortage. I will rephrase that, we have a shortage of new and exciting family home stock as we did in February. At that time, and supply forces kept the market on the highish side of expectations.

Post Easter, particularly in May, we had a big of from sellers, after seeing 2016 starting better than they thought. The market swung back a little the other way to slightly on the lowish side of expectations.

There is a reasonable chance we will have a mirror image of this in the second half of 2016.

Low stock as we come out of Winter meaning firming prices; leading into more stock and a building market (volume wise) come footy finals time encouraging a possible oversupply and easing of prices later in the year.

Not all of the market has been asleep in July, well not for us anyway, please read below Inside James, which has a focus on Off Markets.

Part One of our Three Part Series on Off Markets begins today.

74 Bridport St Albert Park passed in $2,800,000 on a lone Vendor Bid

74 Bridport St Albert Park passed in $2,800,000 on a lone Vendor Bid

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Malvern, 17 McKinley Avenue (Andrew Hayne) – Under the hammer $4,980,000, 5 bidders

Kew, 34 Alfred Street (Scott Patterson) – Under the Hammer $3,065,000, 3 bidders

Malvern, 36 Hunter Street (Andrew James) – Under the Hammer $2,520,000, 5 bidders

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Black Rock, 6B Glenmore Crescent (Mark Earle) – Under the Hammer $1,620,000, 5 bidders

Malvern East, 13 Clarence Street (Marcus Chiminello) – Under the Hammer $2,490,000, 4 bidders

St Kilda East, 3 Murchison Street (Matthew Young) – Under the Hammer $1,365,000, 4 bidders

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Albert Park, 74 Bridport Street (Arthur Apostoleros) – Passed In $2,800,000, 0 bidders

Toorak, 1A Cloverdale Avenue (Anthony Grimwade) – Passed In $2,700,000, 1 bidder

Hawthorn East, 90 Harcourt Street (Maurice DiMarzio) – Passed In $2,200,000, 2 bidders

Volcano at 6B Glenmore Crescent Black Rock with Mark Earle at $1,620,000 -  5 Bidders

Volcano at 6B Glenmore Crescent Black Rock with Mark Earle at $1,620,000 – 5 Bidders

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July is normally a quiet time for most (auctions wise) and especially at our company – we encourage some time away to recharge the batteries.

However we still completed a number of transactions at all price segment levels and almost all were OFF MARKETS.

What we thought maybe of interest to readers, is to combine some of the off markets we bought in July into one scenario and highlight some key points for OFF MARKET buyers.

In our three part series on OFF MARKETS beginning today, we have combined real life concepts from each of the three price segments we bought in – in July 2016.

Top Top End – specifically $10m plus using one example we bought through Ross Savas and Jeremy Fox of and RT Edgar.

Middle Top End – specifically the $4m to $7m market using one example we bought through Jock Langley of Abercrombys.

Lower Top End – specifically $1m-$2m using one example we bought through Adam Cashmore of Jellis Craig.

Off Markets

In the beginning:

So you’ve heard about a whisper, a rumour, on the quiet just for you – nobody else knows and its come straight from your new “bestest” friend. Two of the above off markets started exactly like that for us, which we took to the client and one our client brought to us.

That was the opening line from the agents; with added commentary on the home’s greatness, rarity and the owners desire to sell at a reasonable price as soon as possible. All 3 were big on details of this nature.

Small on detail was land size, asking price and process for sale – nothing new here. Almost every off market starts the same.

The information flow at the beginning of an off market is a bit like an unknown weather event.

It starts with a whisper of something in the distance, turns into a torrent of info (almost all of which is not what you need to know) and leaves you in a desolate landscape, devoid of life sustaining facts around dollars, condition and process.

Not to worry – that’s what we do at James – find out the important info – more on that later.

Lets start with some general info.

Question One: Why do sellers sell off market, especially in this supposedly strong market?

1.  Genuine – privacy reasons, well known to public, divorce, financial.

2.  Genuine – in that there is only one buyer for the property and it may take a year to find them – so other campaigns will not suit, eg the home would look stale after 6 months in the

3.  Not so genuine – but not disingenuine either, in that if the seller gets a huge price from you, then they will sell, otherwise they are staying put.

4.  Not genuine – it’s not really for sale, but the agent has browbeat the seller into running a campaign. The agent is doing so in the hope he/she can change the sellers mind with a big offer from you.

5.  Not genuine – a version of above, except they are selling next year no matter what; you are being used a guinea pig until then to get the agent the listing.

6.  Not genuine – the seller has no intention of selling, but likes the attention and free valuation advice you are given them. Cup of tea anybody!!

Question Two: How do you find out if the property is really for sale?

With so many off-markets coming across our desk, we have developed what we call the OFF MARKET duck test – meaning if it doesn’t look like a duck, doesn’t walk like a duck or doesn’t quack like a duck – then it probably isn’t a duck.

Here is the OFF MARKET duck test and best to ask the questions in writing.

1.     Have you got an authority to sell Mr Agent?

2.     What is the asking price please?

3.     What access can I get to look at it?

4.     Are there ?

5.     What is the process for selling this home Mr Agent please?

While in our business the JAMES OFF MARKET duck test doesn’t give you absolutes, it does provide you with a basis for a good foundation. And let’s not be too picky – 3 to 5 out of 5 satisfactory answers is OK but 0 or 1 satisfactory answers from 5 says move on.

Question Three: Mal, why worry about all this, before you even start.

1.     Because life is short and more to the point market time is short – basically you have Pre Easter, Post Easter, Winter, Early Spring and markets in which to find a home – these are all short bursts of activity and if you are focused on a home you can’t buy, then you will be missing ones you can.

2.     Because life is stressful. Don’t know about you, but for me personally the most stressful times I have found; have been chasing girls who simply have no desire of realizing my full potential. My time in the past has been a lot more enjoyable chasing the girls that wanted to be chased – and in my case the numbers have been small, so every chase counts.

3.     Info – you know the “friendly” agent who you are looking at the home with? Yeah! Well she/he is sucking the info out of you by the gallon, on a home you’re never going to buy. Eg You’re asked would you pay $8m for the home you’re never buying – yep is your answer. Ok, so when you are looking at a $6m home you can buy, do you think the agent will ask you for $6m or $8m? Mmmm – what do you think?

Footnote: If any of the words come across as being derogatory to good agent work on legitimately for sale Off Market homes – then I’m sorry, I’m not making my point well. All three of the off market homes above we bought, would not have bought at the price we paid – if it wasn’t for the excellent work of the selling agent. Agents who can regularly sell homes ethically off market, are at the top of the tree as far as we’re concerned; as they do so without the advertising hype – meaning they use their databases and they need to provide personalized service on both sides or else it all falls apart.

Having said that, an off market agent is NOT working for you the buyer – he or she is working for the seller.

What do you think honey?

What do you think honey?

Next week in our Off Market special we look at

Agents – getting them in order – no not controlling them, understanding them.

1.     Multiple agencies

2.     How long is he/she in control?

3.     How much influence does he/she have?

Due Diligence and James Rating – with less Market Intel

and – with limited public vindication

So how do you start, when do you start and where do you start

Playing the Game

1. How

  • Written – email
  • On contract
  • Verbal

2. When

  • Early
  • Wait
  • Two bob each way

3. Where

  • At what level
  • Too low and no connection and that starts a domino effect of bad moves
  • Too high and of course you’re in the game but …..

4. What

  • With condition or without
  • Term specific or general

And Week Three we roll the theories into one real life example where we combine three of the several off markets in each market segment that we bought in July.

1.  We talk about the psychological factors

2.  Patience, fear and anger

3.  Goals, Journeys and Destinations

4.  Win-win or not

And so on.

Hope you enjoy. If we can help you buy, please give us a call and lets get stuck in – 9804 3133.

OMS

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