Home

Melbourne Property: The Difficult Conversations That Get Deals Done

A good week. Some buys. Some sells. A few misses. But almost every result — good or bad — involved a professional and difficult conversation.

Well, a good week at James Buyer Advocates.

A bit happened. Some buys and some sells. Yes, admittedly, also some misses.

And looking back on it, there was one common thread.

Difficult conversations.

Not negative conversations.

Professional conversations about what actually needs to happen if you want to transact in this market.

One we didn’t buy

Early in the week there was a good property we couldn’t buy because of a poor pest and building report.

I’m still amazed people buy homes without these.

This seemed like a reasonably good house.

It wasn’t.

Major rising damp. Termite activity. Water leaks.

We weren’t talking about a few cracks and a trip to Bunnings. We were potentially talking hundreds of thousands of dollars.

So we had a difficult conversation with our client.

And we didn’t buy it.

Sometimes good buying is the property you don’t buy.

At the other end of the week, we bought a beautiful trophy home in Surry Hills – Tim Heavyside.

The asking price had already dropped from two previous agent campaigns.

We found it for a client – well done Kathy

At this new level, we think competition may come.

Then came another difficult conversation.

Rather than grinding away trying to save the last dollar, we needed tight deadlines, hard work and also offer attractive enough to actually buy the home.

That’s what we did.

As expected competition came and was beaten.

Difficult conversation. Positive result.

This was a trading-up situation, meaning buying is only half the job. The market is perfect for these and our favourite job right now.

Now we have to sell.

And there’s another difficult conversation.

Their existing home is less than perfect. It needs some work. Agent selection will matter enormously.

But after that, its most attractive marketing feature may well be something very simple:

The right asking price. – that’s code for not higher than the market will bear if you want to sell.

Sale management was no different

Another home where we had to have a difficult conversation about façade colour.

It needed changing.

It was changed.

And the home presented completely differently.

We initially went off-market.

No interest.

So we recommended moving to a public campaign.

Another difficult conversation.

Basically, we felt this needed to be all-in.

Get the quote right. Get the presentation right. Get the agent work right.

To their credit the client listened and we went for it.

Did the client get absolutely everything they originally wanted?

No.

Did they get a deal done? Yes.

That was South Yarra, and there was some great agent work (David Sciola) involved as well.

And yes, we had some that didn’t sell – campaigns that produced interest and bidding, but not at the level our clients wanted.

Fair enough.

But then you need another professional conversation:

What next?

Because simply wanting a different market doesn’t create one.

The $7m-$10m conversation

We’ve had this conversation several times this week with 3 different clients whose sales we’re managing, around the $7-$10m ish level.

There have been very few sales at that level recently.

So what do we say?

Hold your nerve.

Price correctly.

Allow a timeframe that may be longer than four weeks.

And think properly about how you’re going to market: multi-agent, off-market or public.

They’re difficult conversations – especially the price correctly one!!

Off-market, in particular, isn’t flying for everything at the moment.

And putting a property online doesn’t magically solve a price problem either.

At some point, buyer and seller have to find a level where a transaction can actually occur.

Summerhill Road — this is what happens when the pieces fit

Which brings me to the public auctions we reported on today.

As always with these reports now, we had no financial connection with any of these properties.

I visited and rated the Summerhill Road home a couple of weeks ago because I was looking at another property nearby.

I liked it.

The PPPs were good.

It was ready to move into. Big family home. Yes, a little basic and without enormous architectural merit.

But importantly:

It was priced correctly.

The quote was $3 million to $3.3 million.

Two years ago? Maybe the thinking would have been $3.4million to $3.6 million, shooting for high $3m.

Not now.

The auction started just under $3 million.

Four bidders took it to the halftime break around $3.2 million.

It wasn’t frantic. Ten here. Twenty there. Limping along rather than exploding.

Then came the important bit.

After the break, Daniel Wheeler came back out and said:

We’re selling. We’re on the market at $3.2 million.

That brought out bidder number five.

Then came a $50,000 knockout bid.

I thought it was an well-run campaign resulting in an incredibly well-run auction by Daniel Wheeler and Ash Howarth of Marshall White.

Across the rest of our smallish auction sample, the results remain mixed.

Bidderman is still around 1 — roughly one bidder per auction.

We’ve been doing Bidderman since around 2008.

When you’re around one bidder per auction, you’re not looking at a strongly rising market…… it’s the opposite

And while we’re dealing with relatively small samples, our clearance rate observations remain around 50%.

Again, not what I would describe as a good market.

And that’s why these difficult conversations matter.

If your $7 million home has effectively lost around $1 million in market value over the last year, you can absolutely wait another year.

It might improve.

But what if it doesn’t?

Likewise, if you’ve got an offer that’s $100,000 below where you’d like it to be, of course you can say no.

Maybe in six months you’ll get your extra $100,000.

But maybe you’re $300,000 further away.

Nobody knows for certain.

That’s the conversation.

Difficult doesn’t mean negative….. difficult means ethical and professional and helping you move on.

This is probably where I sometimes frustrate people.

I think I’m having a positive conversation.

I know sometimes the client thinks I’m being negative.

But I’m trying to work out:

How do we actually get you where you want to go?

I’m here to work for people who want to do deals.

Buy.

Sell.

Trade up.

Move on.

And in this particular market, getting a deal done often requires somebody being prepared to say what they genuinely think — even when it’s not necessarily what everybody wants to hear.

So yes.

A good week.

Some wins. Some misses.

Plenty of difficult conversations.

But when those conversations are professional, realistic and listened to, this market is transacting.