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Market has started like a fire engine not a delivery truck.

9 Victoria Avenue, Canterbury sells under the hammer for $4,110,000

9 Victoria Avenue, Canterbury (Scott Patterson) sells under the hammer for $4,110,000 – 4 Bidders – $610,000 over reserve

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At 6.00 pm today the Melbourne market of late Winter has made a strong statement, with a James $M+ Clearance Rate of 88% and Bidderman a whopping 3 bidders per auction on the 25 auctions, we bid at or reported on today.

The Inner market has started out of the blocks in a hurry – based in part, on the lack of new stock for family homes.

However it’s not all about the lack of new stock (I ran into Alastair Craig at 87 Rowell Street, Camberwell OFI and he confirmed that across the board new stock was down 25%) – right now it’s also about the reemergence of the Asian market and it’s clashing with the strong local market – which prior to the winter break was providing the market leadership, but hadn’t fully satisfied itself. Bidderman at 3 and Volcanoes on good homes at a third of all auctions is big news – even on low stock.

When we say the apparent return of the Asian market – we are referring to at its natural base – the engine room of Melbourne’s growth – the Boroondara high-end market (Kew, Hawthorn, Canterbury and surrounds).

Yes, we are a multi-cultural city and therefore it’s impossible for us to determine the exact nature of everybody’s citizenship on the fly at an auction – so what we are saying is, we are seeing stronger and more bidding from buyers with an Asian background in the here and now – more bidding than we did in the second half of last year and the first half of this year.

Evidence as reported by our Boroondara specialists Simone Clarke and Matthew Quinn.

8 Moonbria Kew (Andrew Macmillan) – 5 bidders (3 Asian background) – on the market $3,075,000 and sold under the hammer for $3,825,000. $750,000 above reserve.

9 Victoria Canterbury (Rebecca Edwards) – 4 bidders (3 Asian background) on the market $3,500,000 and sold under the hammer for $4,110,000. $610,000 above reserve. As Simone said – far out – wow!!!

63 Leura Grove, Hawthorn East sells under the hammer for $2,820,000

63 Leura Grove, Hawthorn East sells under the hammer for $2,820,000 after a frustratingly slow start for James Tostevin. He cheered up though when the fourth and fifth bidder entered the fray.

63 Leura Grove, Hawthorn East (James Tostevin) – 5 bidders (3 Asian background) on the market at $2,610,000 and sold under the hammer for $2,820,000. A little slower than the other two, but got the expected result in the end. $210,000 above reserve.

We don’t believe any of the reserves were unreasonably low, weren’t high either, as nobody would have been sure the Asian market was still there, as the force it was in 2015.

The above 3 Volcanoes had mostly strong bidding – none of the $1,000 drip, drip drip bidding anymore – the bidding was mostly very aggressive, read our James auction reports for more detail. Click here for all auction reports.

How long will this continue?

In the shorter term, who knows, but it appears the Asian market has already adjusted to the hurdles of restrictive bank lending, tougher FIRB and higher stamp duties. The Asian market feels like it is reinvigorating, maybe even reinventing and remains the most influential market segment this millennium – but it’s early days in this new almost (still bloody cold) post Winter 2016 market.

We still fail to see what some economists keep saying in direct contravention to simple long term demand and supply laws; with regards to the longer term of Melbourne’s Inner City market. Sure price will go up and down in the shorter term; but in the long term population is increasing (demand) and Inner Melbourne home sites are decreasing (supply) which means price will go………. Of course a major change may occur, but the negative talk assumes that it will, we cannot see that evidence, so we are assuming it won’t,until proven otherwise (in the longer term).

The second half year market of 2016 has started like a fire engine not a delivery truck.

We continue to get beaten at auction in the situations where it’s a great home and our clients do not have deep pockets and therefore we are continuing to think and work laterally.

We now buy more homes off market than under the hammer at auction and we now find more client solutions on auction homes, away from under the hammer than through bidding on the day.

Perhaps re read the previous sentence if you are a struggling buyer. There are solutions.

Our add to clients is not simply putting one foot in front of the other and then the hand keeps going up with four others at auction.

You need strategies to buy well.

If you already have a home, could I encourage you to be thinking about your children living within a few postcodes, rather than regional in a decade or two. We can help you buy the right sort of additional homes now.

Below we continue the second of our three part series on Off Markets.

Lots of interesting thoughts at 9 Boyd Albert Park (Greg Hocking) - Sold Afterwards above $3,000,000 - 2 Bidders

Lots of interesting thoughts at 9 Boyd, Albert Park (Greg Hocking) – Sold Afterwards above $3,000,000 – 2 Bidders

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Canterbury, 9 Victoria Avenue (Scott Patterson) – Under Hammer $4,110,000, 4 bidders

Kew, 8 Moonbria Avenue (Andrew Macmillan) – Under Hammer $3,825,000, 5 bidders

Malvern, 12 Robinson Street (John Bongiorno) – Under Hammer $3,160,000, 3 bidders

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Malvern East, 38 Macgregor (Daniel Wheeler) – Under Hammer $1,837,000, 7 bidders

Brighton, 1A Mair Street (David Hart) – Under Hammer $2,600,000, 7 bidders

Hawthorn East, 63 Leura Grove (James Tostevin)  – Under Hammer $2,820,000, 5 bidders

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South Yarra, 35 Motherwell Street (Andrew Hayne) – Passed In $3,250,000, 2 bidders

Brighton, 60 Halifax Street (David Hart) – Passed In $3,100,000, 0 bidders

Brighton, 1 Laburnum Court (John Clarkson) – Passed In $3,050,000, 2 bidders

OMS

Welcome to Week 2 of our 3 part series on Off Markets

Last week we introduced what an Off Market was – click here to read

This week we look at:

  1. Dealing with Agents
  2. Limited Information

Your relationship with the selling agent and how you manage it; is a critical factor in whether or not you will be successful in buying an Off Market.

Firstly lots of homes are not Off Markets for sale – they are just homes. A quick reminder of the James Off Market Duck Test! To see if its an Off Market or just a home.

  1. Have you got an authority to sell Mr Agent?
  2. What is the asking price please?
  3. What access can I get?
  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 good foundation for initial decision making.

So lets say you have viewed the home and you are satisfied with the James Off Market Duck Test.

You have deemed yourself past Base Camp and ready to climb the mountain.

Next stop is dealing with or understanding the selling agent’s position.

By now you should know that the selling agent is not actually your friend and not actually working for you – he or she is a professional, working for the seller.

That is not to say the agent is not wanting to see a deal done or not being helpful or not a nice person – after all he or she is showing you the home, that you like and that you have now assessed as having some chance of buying. That’s 3 big ticks for the agent, but they are working for the seller – just giving you some perspective.

Dealing with Agents.

Is the agent the controlling agent in this deal?

You need this critical insight and it needs to be right.

Is it an open listing with a number of agents having access to the home? That’s usually a big negative for you, if you are new to the game.

So if yes, where does your agent sit in the pecking order in terms of information flow?

Why is this important?

Well if you are not speaking to the controlling agent, your information flow could be restricted and the home could be sold without you knowing;

or could be sold without you getting the right information (there is a lot more to this sentence than a few words,if you think about it);

or in fact it’s actually not for sale even though your agent, who is not the controlling agent, genuinely believes it’s for sale.

Some supplementary, but very important questions to information flow.

Are the other agents sharing commissions or is it dog eat dog – that’s an insight into the information flow?

Here is another issue to manage around – have you been told about the home by an agent who has access for a limited time; but then another agent has the exclusive listing? This puts you at a distinct disadvantage by actually going through with the non-exclusive agent – yes it’s better to not go through with the wrong agent – you will be locked into the wrong agent – you will have significantly reduced your chances of being the buyer.

OK let’s move from information flow to agent influence?

Does the agent have the skills to be able to influence the seller in a manner that will bring about a deal you (and the seller) can live with?

Anybody can buy an Off Market $2 million over the odds; we know because we see it and the almost finished (maybe it hasn’t) Asian stampede right at the top, proved that on a weekly basis in 2015.

A question is do you want to pay well over the odds? If yes then “Junior Agent” should be able to fumble your deal through, if not then “Junior Agent” won’t be able to get the deal through – so the deal won’t happen for you or the seller. And to be clear – a “Junior Agent” may be very experienced at selling under auction conditions, but not so at Off Markets.

If you want a win-win Off Market deal, you need to be dealing with high quality, experienced agents such as Ross Savas, , Jock Langley, Adam Cashmore, ie those we bought from in July and others such as , John Morrisby, Ian Jackson, Andrew Campbell, Rae Tomlinson, Michael Armstrong, David Wood to name a few more.

It’s not a matter of buying it cheap – it’s a matter of actually buying it. These guys will not sell you something cheap – in fact if you let them, they will sell you something very expensively.

No, it’s a matter of finding an agent who has the skills to manage the seller to “only slightly above unreasonable” – but still at a level you can afford, so as to get the deal done – if it is in the interests of the buyer and the seller.

With agents it’s the 3 I’s

  1. Is this particular agent in your best Interests to deal with on this home?
  2. What about his or her Information flow?
  3. Does the agent have sufficient Influence?

Limited Information for Pricing and .

I make judgments all the time.

Don’t know about you, but I will be walking down the street and look at a bloke’s trouser length and make some sort of assessment on his character, depending on whether I like that length or not!

Now in the absence of other information, I’ve assessed whether this bloke on the pavement is a man of decency, or a potential threat and I’ve made that assessment based on his trouser length!

Mmmm – Mal, you’re an idiot, who does that – well you do. Look at the judgments you make each day on limited information and how many times are they wrong.

At a public auction you have a lot more information to be able to and confirm the pricing of the home. You can see the numbers at OFI’s – you can see who is bidding and you can see what levels. You can get a feel on the mood. That is all very helpful (if your radar is tuned in the right way) to help you price and competitor strength.

You don’t have that vindication in a private Off Market – and to some extent neither do we – although we will often have a fair bit more information than you.

This is where, in our case, professional peer review and James Council plays a critical role in helping to assess value and pricing.

Without independent professional 2nd opinions you are flying completely solo; judging everything on “trouser length” without 2nd opinions – it can be an expensive way to live your life.

Aha you say, but you have the agent – in fact he or she is your beacon – he is your second opinion – she is your default professional? Really?

Please, because an agent rings you up twice a year for five years does not necessarily make him a close friend – does not make her somebody you “owe”.

What it makes him/her is a diligent professional agent working for the seller and ……. you are the buyer.

Repeating this, we are of the opinion you don’t “owe” a selling agent anything, just because he or she maintains regular contact with you. Our human condition is we all naturally tend towards friendship – but in real estate it’s friendship that often costs you the most.

The advice of “friend agents” is often

* not as robust,
* your fees are often higher and
* in a world where the poorer buying and selling agents can have an attention span of a nat, the care factor lower (if allowed to get away with it)

However in the absence of no other person to speak to – your selling agent becomes your lean to, your adviser.

May I suggest a different adviser – may I suggest an experienced in Off Markets, professional buyer advocate. We are no friend either – but if I was going to court, or having my tax done, or in for open heart surgery – friendship would be secondary to competence, skill and area of expertise – in buying a home friendship should be secondary to getting the best outcome – because often after the transaction is done, your “friend” is gone.

The seller has his professional agent – why don’t you get your professional buying agent or advocate.

But we move on, and so to next week.

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.

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