A time to think if you want the ink!

Was that the market going by? 38 Clarendon Street Armadale (Anthony Grimwade), bought under the hammer $2,212,000 with 3 Bidders, Agent Quote $2,000,000 - $2,200,000

Was that the market going by? 38 Clarendon Street, Armadale (Anthony Grimwade), bought under the hammer $2,212,000 with 3 Bidders. Agent Quote $2,000,000 – $2,200,000.

Contents:

1. Buy/Sell – 17 Chelsea Brighton, a work in progress

2. Bidderman – Under the Hammer

3. Round the Grounds with agents that know

We ask the questions of Campbell Ward, Mike Gibson, Nicole Gleeson and Andrew Campbell

4. Off-Market update

5. Doctor Home – Doctors, Surgeons, Dentists and Anaesthetists, your time to shine!

6. Population, Tax and Tenancy for the Young

Buysell

Good home – auction last weekend – didn’t sell – why?

17 Chelsea Street Brighton - no bids last weekend. Why?

17 Chelsea Street, Brighton.

Firstly, this is a home that I know well – I bought it for the current sellers a few years back.

Times have changed, they have moved interstate and now want to buy there.

With selling, we began our chat at the start of the year about which agent, how to sell, when and of course how much?

The general consensus was early $4m’s amongst all agents. Nick Johnstone was selected, partly because he is a successful agent, with an office 200 metres away and partly because 17 Chelsea is tenanted and Nick’s company manages that.

An auction campaign was run over Easter, the tenant remained, the quote was $4m, then $3.7m to $4m, then $3.8m to $4.1m. Come auction day, last weekend, no bidders and passed-in.

So why hasn’t it sold? The tenant, the agent, the advocate advising (that’s me – no payment, a donation to charity), the presentation, the marketing or ………the price!

Over many years of doing this – I have found it’s hardly ever one factor for sure (unless it’s a major price issue) and often we all tend to think it’s price, when in fact it’s probably not – well probably not just price.

The home: Period 4/5 bedder home, slightly dated, 200 metres from the beach and Golden Mile Brighton, good block with a north rear, no through traffic and ten minutes walk from Church Street – very early $4m’s.

The campaign: With hindsight, Easter was quiet (logic was to be ahead of May auctions), the tenant was still living there, which made presentation less than perfect and the marketing/quoting didn’t hit the spot (because there were no offers).

Current advice to our clients in these instances and there have been three others this year like this for our clients (all of which has since sold after “failed” auctions; 142 Beach St, Port Melbourne, 17 Power St, Hawthorn and 5 Isabella St, Malvern) is blame me, get it out of your system and leave the selling agent alone, to get on with his/her job.

Let’s look at what really happened, what are your options and where do we go from here.

So is it price?

Well, when the market is reportedly starved of homes you may say, it must be. In my opinion for 17 Chelsea that may not be the case – but I have a conflicted interest, so I may well be wrong. However with no offers the quote was dropped, still no offers, post-auction – no offers. For me, that may say it’s not price – what it may say is no buyers.

Huh, Mal?

Why would a period 4/5 bedder home, slightly dated, 100 metres from the beach and Golden Mile Brighton, good block with a north rear, no through traffic and ten minutes walk from Church Street – very early $ 4m’s not have any interest?

Because we got the marketing wrong, the timing wrong, the advertising wrong, the presentation wrong or the price wrong.

And we haven’t found a buyer!

And it’s we agents/advocates who got it wrong – the sellers and buyers are guided by us.

Wrong, mistake, didn’t go to plan – all big emotional talk and whilst it may be true, it’s not always related to incompetence or unprofessionalism on the agents part and so I find it’s best to open the window, yell -

not happy, Mal (or Jan)

- then shut the window and work out how one is going to make good decisions, with what lays in front of one.

Back to 17 Chelsea, I think its the offering, not the offer.

The market is weaker in Brighton in 2018, but Brighton is still short of good period homes and this is a really good family home. However what family home buyers want is a Wow presentation and they want to be able to move in.

I think we as a collective underestimated the negative of a longer term tenancy, in both the presentation and the offering stakes.

Mistake! Yeah probably – not great, but what next?

Options from here?

1. See what happens over the next few weeks – not a strong plan OR;

2. Drop the price to find a balance point where the negative of tenancy (and please, these guys are nice tenants) meets the lower price benefit factor for a homebuyer OR;

3. Wait till the tenancy is finished (year’s end) or negotiate a shorter tenancy and re-market with the same or a different agent in spring 2018 or next year 2019?

From the seller’s point of view, it is critical that they assess their options, that best suit their needs and in these headier emotional times, it’s best to have real clarity on what it is you are trying to achieve, so as you can work through to your best outcome.

We want to buy – that is why we are selling. This market is not going forward, so unlike the previous market (2012 – 2017) our clients here are not losing ground and in fact, with an upsizing buy later in the year, they may be better off financially – maybe.

We don’t have to sell now – it’s just that we want to sell – emotionally we are over it and we want to move on. A very valid reason, but one we encourage balance on.

We found our dream home to buy – then a non-sale of this current home presents a problem. Added stress, if indeed we can arrange (banks) the holding of two homes – may mean price discounting our end. Depends on the dream home – is it a stretch or financially comfortable? Usually it’s a stretch.

One thing we are learning about this market:

Time can be your enemy or with planning, your friend.

Let us look at the numbers.

Let us say you could get $4.1m, but you take $3.8m and for what you buy next, you pay $4.1m when with some effort and luck you could have bought it for $3.8m.

In after-tax dollars that is $600,000 or if you can pay off (after bank interest and tax) an extra $100,000 per year, then it’s 6 years of savings, trips, entire school fees.

Careful thought and exploration are advised – even when not everything is going to plan.

This is so important.

Of course, you could hold out for $4.1m and never sell – well not when you want to.

Recommendations from here

1. Hold to your price.

2. Talk openly with your tenants about mutual benefits going forward.

3. Monitor your agent’s input and enthusiasm.

4. Consider continuing or taking it off the market and reinvigorating in spring.

5. Talk to your bank regarding what options you have in holding two homes if the dream option arrived.

6. Talk to your spouse and work through things – hey, we are in a bit of a pickle here – but no deep do-do. Cost is some marketing and some rent discount (not nothing, but still minor in the scheme of things). We have a solid in Brighton, very solid – we only start to make mistakes if we make decisions that cost us when we didn’t need and/or wanted to act the way we did. What seems like an urgency, may in fact not be there. Slowly, slowly.

17 Chelsea St, Brighton is a good home with some interesting times ahead

and thank you to our clients and Nick for giving permission to publish this article.

For 17 Chelsea enquiry call Nick Johnstone 0414 276 871

LLL

The auction market came back with a whimper this weekend (in terms of numbers).

A lot of “the market” is going on behind-the-scenes, but a lot of that behind-the-scenes is

in buyers, sellers and agents minds, rather than in ink and on paper.

And this is the thrust of today’s James Market News.

What’s going on in your head, what’s going on in others?

You as a buyer, as a seller and as an agent actually have

time to think your way through your buy/sell or buy or sell chess plan, if you want to.

You also have the time to ruminate, self-confuse and make some bad decisions.

You can think and ink or stink!

The choice is yours and we are here to help if we can.

2018’s 2nd Market – The May Market

Beginning in 2017, we fine-tuned our market reporting to show more clearly market movements.

The biggest innovation was our 4 markets a year (Opening, May, Spring and End) 100-Auction Test over 3 weekends.

Our next 100-Auction Market Test – May 5th, 12th and 19th.

Volcanoes

Small numbers of $2m+ auctions this weekend

Albert Park land sells for $11,500 per sqm – $650,000 above reserve/quote

36 Elizabeth Street Malvern. Lachie Fraser-Smith under hammer $3,270,000 with 6 bidders. ISP: $2,500,000 -$2,750,000

36 Elizabeth Street, Malvern. Lachie Fraser-Smith under hammer $3,270,000 with a volcanic 6 bidders. Agent Quote: $2,500,000 -$2,750,000.

Malvern, 36 Elizabeth Street Lachie Fraser-Smith (Jellis Craig) Under Hammer, $3,270,000 6 bidders

Sandringham, 5 Collingwood Street Mark Earle (Buxton) Under Hammer, $2,216,000, 4 bidders

UndertheHammer

42 Draper Street Albert Park. Shane Siemers. under the hammer $3,850,000 3 bidders. ISP: $2,900,000 - $3,190,000

$11,500 per sqm for land. 42 Draper Street, Albert Park. Shane Siemers. under the hammer $3,850,000 3 bidders. Agent Quote: $2,900,000 – $3,190,000.

Albert Park, 42 Draper Street Shane Siemers (Greg Hocking) Under Hammer $3,850,000, 3 bidders

Armadale, 38 Clarendon Street Anthony Grimwade (RT Edgar) Under Hammer, $2,212,000, 3 bidders

Glen Iris, 4 Netherlee Street John Manton (Marshall White) Under Hammer $3,740,000 3 bidders

Surrey Hills, 25 Wharton Street James Bateman (Jellis Craig) After Auction $1,830,000, 3 bidders

Kew, 161 Derby Street Paul Caine (Caine Real Estate) Bought after pass-in $1,880,000+, 2 bidders

1a Kildare Street Hawthorn East. Passed in $2,325,000 with 0 bidders. John Piccolo. ISP: $2,500,000 - $2,750,000

1a Kildare Street, Hawthorn East. Passed in $2,325,000 with 0 bidders. Agent Quote: $2,500,000 – $2,750,000.

BigDucks

Brighton, 71 South Road Passed in $3,700,000, 0 bidders

Hawthorn East, 1a Kildare Street Passed in $2,325,000, 0 bidders

RoundtheGrounds

We ask four well respected high-end agents, three questions about their market patch.

These are their unedited responses.

Stock Levels seem down across the board?

1. Firstly, do you agree?

2. Secondly, if you were a seller and wanted to buy – what do you believe would be a good strategy?

3. Thirdly – Do Off-markets work – fact or fiction?

InnerEast

CW-2ChaucerCanterbury

Campbell Ward – JC – 0402 124 939

levels are down. I agree. Compared to this time last year there are segments of the market that are tracking 20% – 30% less in volume. A number of reasons both local/overseas – eg changes to foreign investment, banks tightening up lending and implementation of quoting laws, which are confusing the marketplace. All this combined is seeing an overall settling of price in the marketplace.

If I was selling and buying in the same market – remember it’s all relative. I believe selling first in this market is the right approach and take advantage of buyers that are starved of good quality homes. This will allow you to buy back into the spring market, which historically is when property levels increase.

Off-markets work for the right home. There needs to be a willing seller and buyer and the home must be unique in nature. I have handled off-market transactions that have exceeded vendors expectations and you can achieve a premium – recently sold a home in in 8 days above $5 million – happiness both sides.

Stonnington

Firstly… I do agree stock levels are down across the board. The breaks we incur for Easter and school holidays, seem to extend the time frames of non-marketed homes. Sellers are taking their time to decide to go to market. Stonnington down around 30% in home sales on last year… last time I looked.

Secondly…If I was a seller wanting to buy, I would take a good look at what’s out there, that appeals or accommodates and see how they are selling and if I’m prepared to compete to the levels, for the right property. Buyers need to be prepared to compete and pay strong prices for their perfect home. – because if they’re perfect for them… they are probably perfect for others too.

Selling first is the way to go if you want to know what you’ve got to spend, or if you need to find out if your expectations will be met. If buying first you need to know your stuff. 

Thirdly…off-market offerings have slowed things down I think. When stock levels are low, agents become hungry to find listings, so often agree to take on overpriced off-market listings in the hope that someone will come along and meet these high expectations. This can confuse buyers and sellers.

The successful off-market sales we hear of are, in my view, perfect homes with all the bells and whistles, high demand homes; where there’s not another one and the right buyer is happy to pay to secure it. Two recent South Yarra sales are good examples of this and will send future expectations a little out of whack.

The problem is that off-market sellers, can become a little disillusioned in the process and think their home may not be worth what they want, so they don’t go to market. If they had gone to market in the first place, they may have achieved the result with the competition. 

Nicole Gleeson – K&B – 0414 809 221

NicoleG

MichaelGibson

Mike Gibson – K&B – 0418 530 392

Firstly are stock levels down? It certainly seems that stock levels are down across the board, in particular for this time of year.  I don’t think there is any one particular reason as to why there is not as much property on the market as normal and given the stock levels – it is certainly a good time to be selling in the months of April/May/June in Melbourne.

Secondly – as a seller I would normally recommend taking the conservative route of selling first, as it can be risky buying first and being “forced into a price you may be reluctant to accept”.  Alternatively, if you wanted to buy first, try and secure a very long settlement to give you plenty of time to maximise the sale of your own property.  Time can be your friend.

In regards to Off-Market transactions – they have their pluses and minuses.  On the positive side, it can be a private and no-fuss transaction for the buyer and seller alike.  In the last three or four years if you were to have sold privately I think there was every chance that the ultimate sale price may have been conservative, given the enormous activity and strength we have had in the market.  If you have a AAA property you must test the market properly, as I don’t believe there is any downside and the upside might be significant.

Bayside

AndrewCampbell

 Andrew Campbell – MW Brighton – 0419 366 545

Stock Levels down? Yes, Mal I agree with this, compared to this time last year. Our Bayside market is coming out of a slow period, due to the bigger than usual Easter Break & School holidays. Many buyers say there doesn’t seem to be a lot of options on the market right now – I agree. That is leading to some frustrations.

The month of May is, however, building to be a stronger month along with June, as sellers are choosing to hit the market at this time. So it feels like an increase in stock coming.

Buy/Sell. I still believe if I was a seller right now, that Auction is the clearest and most effective way to get a result! And if I was to buy, I would connect with an agent with a good reputation in the local market that would show me properties off-market or buy in a private sale manner.

Off-markets: Fact, they work and work really well! I’m currently dealing with several clients that prefer in my marketplace to transact privately off-market. I’ve seen an increase in this space especially in the higher dollar end over the last year.

Off market we buy

We continue letterbox drops for off-markets for our clients.

We covered more in Toorak eg around St Georges Road, Armadale, Scotch Hill and Urquhart Estate, Hawthorn. If you have a no-advertising sign or a for-sale board then we don’t letterbox.

We have clients looking for

$3m to $10M+ family homes – renovatable or  ready to go or land.

Golden Mile Brighton, Hampton, Middle Park and……Grace Park, Sackville, Tara Estate, Scotch Hill and……Gascoigne, St Georges Toorak, Armadale and……

Call us for no-obligation real buyers $ guide.

LB1

Call Gina

Off-market exchange: Gina & Yolanda on Socials

There is plenty of midweek action on James Social Media – Facebook, Twitter (especially Live auction Saturday updates on 100-Auction Test days) and Instagram.

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DoctorHome

This is a time in the market when things begin to shine for

surgeons, doctors, dentists and anaesthetists;

who are looking to upgrade.

We can bring specialised reports on the dollars (land values, discounts for Heritage, capitalisation costs), the properties (architectural or not) and the strategies (agent negotiation, buy/sell leverage, time savings) to a no obligation, confidential, 45-minute meeting.

Hawthorn, Kew, Canterbury, Inner Camberwell, Hawthorn East, Toorak, Armadale, Malvern and Malvern East, Albert Park, Middle Park, Richmond, Elwood, Brighton, Brighton East and Hampton.

Having bought literally for hundreds of doctors, let’s talk what works and what doesn’t – so whether you are buying first or selling first, local, interstate or overseas – it pays to at least speak to Gina (0457 835 255) if saving time, money and getting access is on your needs list.

Off-market, EOI, private or public auction, private sale, boardroom auction, best offer in.

As well, we have a fully updated due diligence structure for buying auctions this coming weekend. No success / No fee. That’s the plug!

Call Gina

Community

Practical Solutions for Younger Homebuyers

The world has changed since 1985 when my Mum gave me $22,000 instead of buying herself a new car and told me to buy the home I was renting. I got a bank loan (mum and dad guaranteed and twice as much as the car) and I bought my first home. I don’t know what I was earning, as I didn’t have to think about it. Today a new car is $80,000 plus a bank loan double that of $160,000 = $240,000. Let me know where I can buy a $240,000 block of land with a rundown home on it, to get my 2018 life started (wealth-wise) in Inner Melbourne.

Before society begins some movement into helping younger homebuyers with ideas such as:

  • governments sharing ownership with the younger,
  • families deciding to and councils understanding multi-generational living,
  • homeless and rental schemes,

we as an ageing society need to really, really know there is a real problem for young people and want to really, really help them, do something about it.

This little silent slide movie below got some criticism because of the words The Enemy Within – those words are also a catchcry for the mentally troubled. I left the words as they are. The housing issue for the young is a real one and yes a lot different than it was for us. Can I suggest your children may need your help, not your advice on how you got on when you were a lad!

Next week some real and practical plans on what we are trying to achieve on a real block in Brighton, Melbourne (click here for more)

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Call Gina

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