oc | Tuesday 18th December
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Previously on JAMES MARKET INSIGHT

Many of today's auctions were about charades, rather than theatre.

The Winds of Market Change are upon us. But some things never change. Statement of Information $5,800,000 to $6,380,000. Vendor Bid $6,000,000. No Takers. Passed In on Lone Vendor Bid and Reserve is now $6,790,000.

The Winds of Market Change are upon us. But some things never change. Statement of Information $5,800,000 to $6,380,000. Vendor Bid $6,000,000. No Takers. Passed In on Lone Vendor Bid. Asking Price now $6,790,0001.

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Bidderman Stats

It’s 6.00pm Saturday and the James Clearance rate for $M+ Inner Melbourne was a drifting down 62% on the 34 auctions we covered today, in the second week of our James 100 Auction 3-Week Test. Last week it was 68%.

James , that is bidders per auction, was 1.6, which continues the significant drop of the last four months and represents around a 40% drop in bidder numbers from 12 months ago. Last week it was 1.5.

Look at Ducks (0 bidders) and Lones (1 bidder) today – this is why we say that many auctions were charades, rather than theatre.

If you bid, then in 6 out every 10 homes at auction, you were the only bidder – you were the one act drama – there was no other bidder supporting cast.

Hello….. 6 in 10 – in fact only 29% of homes actually sold under the hammer – almost 3 in 4 sold away from the street.

What does this mean for you the buyer?

It’s about the price you pay, versus have to pay.

Today for more auctions than not, this was the scenario below.

Since the start of Spring 2017, the market has flattened and has continued to do so in early 2018.

Bidder depth on many homes has dramatically reduced.

Therefore it can be about the price you pay, versus have to pay.

However, our sense is a balanced or levelling market is a good place to be, for buyers and sellers who are willing to listen.

The market does not yet feel doom and gloom – it just no longer feels one of overwhelming volcanoes and mayhem.

So more than ever good agents, smart buyers/sellers and good negotiation practises come to the fore.

  • It takes skill to auction a home with 1 bidder (and still get the 5 bidder price).
  • It takes skill to buy well with 1 bidder (and not pay the 5 bidder price).
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Game Changer

At this time in a flattening market it is normal for you, as a buyer, to “hear” about more and more off markets.

Many sellers believe the new market doesn’t apply to them and they still want a courageous price.

After the obvious first question: Is this what you really, really want?

Comes the next question:

Is this home really for sale, Off-market?

Yes the agent says, you can buy it, but………..really?

Is it really for sale or are you just a pawn in the selling agents or seller’s chess game?

1. Are you being used by the seller, to test value and unbeknownst to the agent who is showing you the home, the seller is speaking to other agents; who are (by necessity to stay in the chess game) telling the seller what he/she wants to hear…… that they can get more than any offer, you put forward?

2. Or is the selling agent just trying to get the listing and has forgotten to tell you that the owner hasn’t really committed to him/her the agent, or indeed to the action of selling thereby, no matter what you do, what architects you bring through, all your offer will represent; is a piece of information for the seller, not a move forward on a deal.

This is not to say that we don’t buy a number of off markets, we do.

So how can you tell if the “secret” – is really one that you have a chance of buying?

Besides getting a buyer agent to represent you (a selling agent has conflicts in off markets in relation to buyers) here is our 4 Rule Off-market Test:

Rule No 1: Can you get reasonable access when you want?

Rule No 2: Is there an indicative selling or asking price (say…on an email) that makes some sense to you?

Rule No 3: Does the agent who is taking you through have a sales authority and is it an exclusive one and how long for – meaning is he or she actually authorised to sell to you?

Rule No 4: When you have indicated you wish to offer, are the seller(s) willing to prepare an $800 Section 32 to receive your offer? Not prepared to do that on a $6,000,000 sale? Mmmm…. that takes frugal to a whole new level OR “maybe, it ain’t really for sale!”

Answer No to any of the above?  Then you may be on the emotional hook for a home that is not really for sale and others that are for sale, may well be passing by your rose coloured glasses.

Off markets are an excellent way to buy and sell; however there are many traps for new players and you can be distracted for months away from other more purchasable homes, if you are not prudent.

Say Yes to Off-market, but say No to somebody else’s chess game, by following the 4 rule Off-market test.

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Behind the Scenes

At this time in a flattening market it is normal for you, as a buyer, to “hear” about more and more off markets.

Many sellers believe the new market doesn’t apply to them and they still want a courageous price.

After the obvious first question: Is this what you really, really want?

Comes the next question:

Is this home really for sale, Off-market?

Yes the agent says, you can buy it, but………..really?

Is it really for sale or are you just a pawn in the selling agents or seller’s chess game?

1. Are you being used by the seller, to test value and unbeknownst to the agent who is showing you the home, the seller is speaking to other agents; who are (by necessity to stay in the chess game) telling the seller what he/she wants to hear…… that they can get more than any offer, you put forward?

2. Or is the selling agent just trying to get the listing and has forgotten to tell you that the owner hasn’t really committed to him/her the agent, or indeed to the action of selling thereby, no matter what you do, what architects you bring through, all your offer will represent; is a piece of information for the seller, not a move forward on a deal.

This is not to say that we don’t buy a number of off markets, we do.

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Volcanoes

This Scotch Hill auction tells you how the market is. Rip roarer volcano with Chris Barrett, but basically ran out of puff at the top end of the range. Good agent read - solid market response. 42 Berkeley Street, Hawthorn $9,010,000, 5 Bidders.

Surrey Hills, 5 Junction Road (Scott Patterson, Kay & Burton) under the hammer $2,600,000, 5 Bidders

Hawthorn, 42 Berkeley Street (Andrew Hayne, Marshall White) under the hammer $9,010,000, 5 Bidders

Malvern East, 24 Turner Street (Mark Wridgeway, RT Edgar) under the hammer $4,700,000, 4 Bidders

For all 34 James Auction Reports

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Big Ducks Lones

Matching T-shirts, matching glasses, matching elbows!! 10 Kingsley Street, Elwood - Torsten Kasper, sold after auction just over $4,300,000, 1 Bidder.

Armadale, 17 Denbigh Road, passed in $6,600,000, 0 Bidders

Hawthorn, 32 Lisson Grove, passed in $5,700,000, 0 Bidders

Malvern, 41 Thanet Street, passed in $3,800,000, 0 Bidders

For all 34 James Auction Reports

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INNER EAST

HAWTHORN - KEW - CAMBERWELL - CANTERBURY
SURREY HILLS - GLEN IRIS - RICHMOND

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BAYSIDE

BRIGHTON - ALBERT PARK - MIDDLE PARK
HAMPTON - ELWOOD

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STONNINGTON

SOUTH YARRA - TOORAK - ARMADALE
MALVERN - MALVERN EAST

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James Community

James Buyer Advocates earns it income by providing bespoke buyer advocacy services for high-end family home, apartment and investment buyers and have been doing so since 2002.

James Buyer Advocates puts significant resources into creative solutions for Younger Homebuyers, Launch Housing (Homeless Prevention Program) and The PlasterHouse (a children’s rehabilitation hospital in Arusha) Tanzania.

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Buy/Sell Advocacy
The decisions you make change your environment

A week in the life of
James Buyer Advocates

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Next James Marketnews

Next weekend is the holiday long weekend and so there will be no James Market News reporting.

We have held over our 4th and final part in Value is not Price and Price is not Value until the week after – sorry, we’ve had a super busy week with clients.

March 17th: will also be the third and concluding week on the James 100 Auction Test – showing where the Opening / Pre-Easter market is at. Bidderman – Market Size and the Wounded Underbidder – Prices.

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