Bang a Big Easter!

The 2018 market has been challenging for buyers & sellers and buying & selling agents - so it was good to have a laugh with the great GERALD on his Vespa - after our client bought off him in Sorrento on Easter Saturday. Good work as well, by the third musketeer - Liz Jensen of Kay and Burton.
The 2018 market has been challenging for buyers & sellers and therefore buying & selling agents. So it was good to have a laugh with the great GERALD on his Vespa – after our client bought in Sorrento on Easter Saturday. Good work as well by the third musketeer – Liz Jensen of .

BiddermanEaster2018

Left Field Thinking

With auctions practically non-existent due to the Easter Break / School holidays, this week’s James Market Insight is different.

1. Easter summary – Under the Hammer

2. How to find Off-markets – there are no shortcuts.

3. Inside James – we bought 5 from 6 over Easter

4. – Mistakes, Review, Honesty, Improve.

5. Younger Homebuyers – finding better alternatives

UHEaster

In 2018, the Pre-Easter market price has altered course (downwards),

especially for the B and C-Graders however, some well-priced A-graders are still showing the way, going against the trend and increasing in value.

At James, we did a follow-up check of our 100 Auction Opening market report (17th March – click here) on Super Saturday (24th March), with a sample of 33 randomly selected auctions.

At 6.00 pm on Saturday 24th March, the week before Easter,

the clearance rate on the 33 x $2m+ auctions was a miserable 55%.

55% Saturday Clearance Rate for the Top End!

That’s cold! One of the weaker clearance rates we have seen, since 2011.

But it’s a little different for Top-end A graders.

In The Age, in a good article, Nicole Jacobs (of Block fame), succinctly summed up what we are seeing at the Top End leading into Easter 2018.

Click on to go to article

Click on to go to Nicole’s article

Why are some Top-end A-graders easier to sell,

than those further down the food chain, when history has often proven the reverse?

  • Because whilst bank lending is tightening, at the Top End there is less need for bank borrowings, so limiting LVR restrictions are not as much of an issue.
  • Because many Top-end buyers are also Top-end sellers and there is still a leftover wash from 2009 – 2016 money from China, albeit a reduced one from 2 years ago.
  • Because business confidence is high and that translates into more assertive negotiations, which in turn push home prices at the Top-end.

So overall the market has turned downwards however, there is still a modicum of competition for well-priced Top-end A-Graders.

But Mal and Gina, not all good Top-end homes are selling!

Response: You can be an A-grader on Property and Position, but still be a B or C-grader with an out of market asking Price. To be an A-grader all 3 P’s need to work.

Off market we buy

Three of the five key ways we get Off-market properties for our buying clients to consider and sometimes buy are:

1. Letter Box drop

This week we covered Grace Park, Sackville Ward and Scotch Hill – as well as a fair bit in , Armadale and Gascoigne in Malvern East and Golden Mile and other parts of Brighton.

letterbox2

2. Lunch with key agents

which we do on a regular basis. Being in a buy and sell position is advantageous over being in a buy situation only.

Coffee

3. Advertise to lawyers, owners & 10,000 Marketnews readers

LB1OM34

Are you looking to sell Off-market?

We are James Buyer Advocates (1000’s buys since 2002)

We have clients looking for

$3m to $10M+ family homes – renovated or ready to go

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.

Why consider selling Off-market?

  1. Because it’s confidential and no selling fees (if you want).
  2. Because 2018 Market has changed for sellers.
  3. Because our clients engage us for Off-market access, not low prices.
  4. Because it works – less than 20% sell under the hammer.

Three Choices for You (Different Fee Options)

Option 1: We view, bring suitable buyers and if we buy, we pick up all the costs – we are paid by our buying clients.

Option 2: Do you want a selling agent to help you but you are not sure which one?

We can deal with anybody you suggest or we can organise the 3 best agents from 3 different companies to come to your home and present to you.

We then deal with the agent you choose if we have a buyer.

We are not paid by you or the agent – they make a donation to Launch for the Homeless or The PlasterHouse in Tanzania.

You get the best agent, best deal and you can sell to whomever you want.

This has raised $100,000’s for charities since 2006.

Option 3: Buy/Sell. Our most popular service, where we help you buy another home and we arrange agents to sell your current home at the same time.

We are paid a buying fee by you and you pay a selling fee to the agent.

Reduces stress, bank payouts, renting and costs.

We can leverage, look at more homes, privately and if not successful – then no fees are charged.

We’ve bought Off-market

Lyall St Hawthorn, Black St Brighton, The Ridge , Hodgson St Kew, Stanhope St Malvern, Favril St Hampton, Grace Park, Hawthorn…..

OM56

If you’re looking to sell a family home in , Stonnington, Bayside or Port Phillip – ring us, we may well have a buyer.

WereBuyingSince our last James Marketnews – 6 On-market deals, bought 5 and unfortunately missed 1.

2 Woodstock

2 Woodstock Canterbury – James Home Rating 823/1000 – Simon Curtain

Agent Quote: $6,500,000 to $7,000,000 then $5,600,000 to $6,000,000 then $6,130,000.

James Control Price provided to client before negotiations: $6,355,000 to $6,855,000

Result of Private Auction: 3 bidders and bought under the hammer, above Agent Quote, however within James Control Price.

Client: Family with young children and Marketnews readers. Yes, we are helping manage the process of selling their home, through agents, during this process.

Post Deal Review Summary: See our review below.

52 Oban

52 Oban – James Home Rating 741/1000 – James McCormack

Agent Quote: $2,800,000 to $2,980,000

James Control Price: $2,851,000 to $3,251,000

Result of Auction: 3 bidders and bought under the hammer, above Agent Quote, however within James Control Price.

Client: Single and referred to us by another client.

Post Deal Review Summary: Balanced and expected result for a very good 4 bedder family home in the middle of South Yarra. This is the same sort of price and competition that you would expect to see in Armadale, Hampton, Albert Park or Richmond for this type of offering, in this or almost any market.

34 Foam

34 Foam – James Home Rating 749/1000 – Leonard Persichetti

Agent Quote: $3,200,000 – $3,500,000

James Control Price: $2,815,000 to $3,215,000

Result of Auction: 2 bidders and bought after auction, below Agent Quote, however within James Control Price.

Client:  Family with younger children, who were referred to us by another client.

Post Deal Review Summary: The quote was adjusted downwards through the campaign to better reflect interest and in the end, the final price was within the adjusted quote of $3,000,000 to $3,300,000. We felt the price paid was a reflection on the price paid a few years ago and what is happening in the townhouse market right now – not as strong as the stand-alone home market.

Call Gina

66 Clendon

66 Clendon Toorak – James Home Rating 667/1000 – Michael Gibson

Agent Quote: $6,850,000 to $7,500,000

James Control Price: $7,329,000 to $8,329,000

Result of EOI: Three bidders, on the market at top of quote and bought above Agent Quote, however within James Control Price.

Client: Younger family, who have bought through us before. Yes, we are helping manage the process of selling their home, through agents, during this process.

Post Deal Review Summary: A strong price was paid, however this is reflective of this being as A-grade a Melbourne location as you can get AND the same sort of bunfight happened last time we bought in Clendon Road (north of $10m) AND two other land type sales same week in St Georges Road (Oliver Booth) and Irving Road (Jeremy Fox) reinforced that Toorak AAA land is still north of $11,000 per sqm – despite the current downturn.

18Susan

18 Susan  – James Home Rating 827/1000 – Jen Dwyer and Steve Tickell

Agent Quote: $4,100,000 to $4,500,000

James Control Price: $4,400,000 to $5,050,000

Result of EOI: Three bidders and was on the market at top of quote and bought above Agent Quote, however within James Control Price.

Client: OS family with younger children, who have bought through us before. Yes, we are helping manage the process of selling their home, through agents, during this process.

Post Deal Review Summary: Of the homes we were involved in, this and the one below had for us, the most marshmallow type pricing – hard to find comparables, at the top end for the area and we were not sure exactly how the market would receive what was on offer, due to the land characteristics. In the end a strong result with strong bidding.

18a Boroondara

18a-20 Boroondara Road Sorrento – James Home Rating 623/1000

Agent Quote: $2,900,000 to $3,100,000

James Control Price: $2,869,000 to $3,489,500

Result of Auction: Two bidders, pass-in and bought after the auction, within the agent quote and James Control Price.

Client: Family with older children, long-term Marketnews readers. Yes, we are helping manage the process of selling their home, through agents, during this process.

Post Deal Review Summary: The Peninsula is always a bit of a crapshoot, but this was a AAA location – walked from a Sorrento coffee to the auction on the day – took less than 10 minutes. All felt the quote was “bullish”, but another bidder on the day, some good agent work and some movement from the seller meant a deal was able to come together. A balanced result for both buyer and seller.

Review

We get many deals over the line and when they work everybody’s a “hero”.

However, not everything goes to plan and not everything turns out as we would like it to; despite our best efforts, methods and our experiences of buying well over 1000 homes.

After every “success” or “failure” we have internal reviews.

With James internal reviews, we believe in 3 things

1. Be honest about your line-ball calls – how can we do it better next time?

2. Mistakes, so long as they are not from laziness or consistent, are accepted. Deceit or cover-up is not.

3. As with modern pilot training – all co-workers and clients, have equal standing in review inputs of management.

Below are our Easter reflections of three of our more difficult internal reviews.

Letter to 2 Woodstock client:

March 2018

Dear ____

We missed Woodstock and that was my fault and I apologise.

You did nothing wrong.

I believe after much self-analysis I distracted our negotiation away from secure to price saving.

I did that because I erroneously believed that you had a limit lower than what you did and the seller a limit lower than what they did and I didn’t fully understand your depth of feeling. They are bad mistakes on my part.

I did that ‘because’ combined with the quote changes I could ‘see the result’ which I ‘knew’ was happening if I could get it at ‘your low’ budget.

Three very big mistakes which pushed me out of a ‘listen’ mode and into a ‘tell’ mode – my biggest mistake of all.

The strategy was correct to avoid an auction, was correct on pricing and possible interest – but I went very wrong on

1) understanding the depth of your feeling and $ ability

2) questioning the seller’s position $ wise, after the quote lower and medical story.

Upon reflection, I was beautifully outpointed by Simon and I sincerely apologise _______

You got the things right on Woodstock and I did not perform to my highest levels at the critical time – that time was questioning of you and Simon prior to the original offer – we were dead in the water after that mistake.

It’s not a mistake I should have made.

_______ I would understand if you do not wish to continue with me – but I sincerely hope you do. We can find others of that class – but they do take time and a good advocate.

I can’t promise I won’t make mistakes – but I take my job very seriously and I try and avoid them.

Yours sincerely, Mal

Postscript One: Our client above responded with a really classy note and decided to continue with us and I appreciate that very much.

Our internal review concluded I made mistakes. We have identified one key area for my improvement – assumptions.

Postscript Two: Earlier this year we walked away from a client and a substantial fee on a home we had been engaged to buy 72 hours before auction. We had worked with this family a decade ago and enjoyed their company then and would happily have coffee with either or both today. However during this recent process, with one client OS and one local, it became obvious that both were on very different pages and there was zero common ground on this property.

Both parties were speaking to us individually, no conversations were together. It’s unfair to add any more colour, except to say the differences were extreme and despite having completed all due diligence, we withdrew 3 hours before the auction and informed the sales agent as a professional courtesy. The home was subsequently bought by one of the partners. Our internal review concluded we had no other satisfactory course of action.

Postscript Three: Late last year, we spoke of a substantial full refund we provided to a client – voluntarily and on our own initiative. We did so because we felt our client had been wronged in the process of purchasing the home – there was deceit/incompetence by others and deceit by the seller’s solicitor when both combined to hide a lease attached to the property. This was not told to us, nor our client and no lease was included in the Section 32 paperwork.

Subsequent to our full refund, our client successfully withdrew from the purchase. Our client has since offered to engage us in another job. Our internal review concluded we had no other satisfactory course of action.

Community

We live-in, work-in and belong to the Inner East and Bayside Melbourne Community. We support:

MelbourneFHP

Current Housing on James Family Project 700 sqm duplex Bayside site

Current Housing on James Family Project 700 sqm duplex Bayside site

At James Buyer Advocates we are looking to help younger homebuyers where we can.

We now believe in a PAUSE in rapid population growth through immigration (family reunions excepted) from 2020 to 2025/2030?

Why? We would like to see our community have a discussion and consider infrastructure solutions to better house our young people, who already live here.

When our community thinks it’s right to go again, press the migration re-start button.

We continue to support and feel we should improve our actions with refugees and overseas aid.

Our current tax laws are really hurting young people!

When our negative gearing tax laws allow me to buy a $million home with $8,000 after-tax dollars and no deposit AND yet that same home would cost a young couple $50,000 in after-tax dollars and a 20% saved deposit, then we have major inequities and unfairness in our Australian society.

Tenancy laws

Whilst we act for investors and acknowledge there are problem tenants, we also feel that no-grounds evictions and unreasonable rent rises adversely affect the psyche of many younger Australians whose only choice now, is to rent. It also weakens the argument that “carte blanche” tax incentives to investors are good for renters.

However, many in our community do not agree with the above sentiments.

So, we at James Buyer Advocates are looking for and presenting new ideas on a micro basis, for making significant changes to the way young people are “housed” in the future.

We think there are better solutions to house young people, than an isolating 52nd floor, a divorce enhancing mortgage or an infrastructure-free zone, 6 miles west of Woop-Woop.

Our plan is simple –  to practically show and encourage you – including plans, costs, council battles – many of the issues we run into with our project to house 5 families on a 700 sqm site in Bayside.

Possible additional 3 homes to make 5 family homes on Bayside site

Possible additional 3 homes to make 5 family homes on Bayside site

Question: How are you and your adult children, grandchildren going to live well with the Inner Melbourne 3P’s?

  •  (feels like a home)
  • Position (near an Inner train station and within cooeee of each other and no 60/90 minute, times two, daily work commutes) and;
  • Price (mortgages that don’t kill families and ruin health)

We at James are helping a number of families at least discuss and plan. Some families we have begun buying for.

One (not the only) possible solution: why not live together, but also live apart – it’s a century old idea, can it work in Inner Melbourne?

  • Grandad helps looks after grandchild for son/daughter, while son/daughter earns money to help look after grandad and grandchild.
  • Like the Greeks, Africans, Indians, the Jews/Arabs and Aborigines sort of do – like the Anglos, Americans and some Aussies sort of don’t.
  • At times families want to live together and at other times, families are the last people any of us want to see.
  • But if we are all going to eventually live in smaller spaces, why not have a family as your neighbours – OMG – separate entrances and privacy – but some communal living.
  • Protection of family wealth – a family farm concept can be 1000 acres in Horsham – can it be 700 sqm in Bayside and then possibly, other sibling farms coming off this one piece of wealth?
  • Inner Melbourne is regarded as one of the most liveable cities and with all my travels, I agree (for oldies). However, for young people, it is fast becoming one of the more unliveable cities, due to mortgage/traffic/future fear stresses.This will only get worse, if we oldies, don’t wake up; put our bank accounts, super fund balances and growing old fears to the background of our minds; and bring our families into the foreground of our hearts, by finding ways for the young and the old(er) to work and live together in meaningful and happy ways.

At the latest meeting with young architect student James Hayward, on-site at the Bayside block we discussed:

privacy and divorces and communal sharing of solar, carpooling and laundries -

whilst separating entrances and individual family living spaces

and not being fortune-tellers we mostly talked about the ability to build flexibility into the future.

James Hayward and Mal James discuss initial planning of 5 family homes on a 700 sqm site in Bayside

James Hayward and Mal James discuss the initial planning of 5 family homes on a 700 sqm site in Bayside.

We are trying to bring you practical ideas and coverage on how we can all help our young people, better house themselves.

Over the next months, you will see plans and issues with:

Housing 5 families on a 700 sqm site in Bayside.

This is what we call the James Melbourne Family Home Project.

Call Gina

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