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It’s Easy to Throw in the Towel – Don’t.

Please, Please, Please no more bidders, I can't cope. Nope Hamish Tostevin did not say that as solder 27 Milverton Camberwell under the hammer for $2,120,000. Volcano -  8 Bidders

Please, Please, Please no more bidders, I can’t cope. No, Hamish Tostevin did not say that. 27 Milverton, Camberwell under the hammer for $2,120,000. Volcano – 7 Bidders

At 6.00 pm on Saturday, the James Clearance Rate for Melbourne’s $M+ was 93% on the 29 auctions we covered. The James Bidderman, our bidders per auction measurement was at 3.2.

Overall Summary of Melbourne’s Million Dollar-Plus Auctions:

  • Ducks ($M+ auctions with no bidders) 7%
  • Lone Rangers ($M+ auctions with one bidder) 11%
  • Norms ($M+ auctions with 2 or 3 bidders) 41%
  • Volcanoes ($M+ auctions with 4 or more bidders at auction) 41%

There is no analysis required for the above numbers – they are completely self explanatory.

Bigger Auctions:

  • , 39-41 Mayfield Avenue (Andrew Hayne, Marshall White), under hammer, $5,675,000, 2 bidders
    Interesting history here with the previous owner buying up the lots next to the house as they came to market over time and creating a gorgeous garden and tennis court giving a country estate feel (quite rare in Malvern!) to the property … (See more in Auction Reports)
  • East, 40 Anderson Road (Antony Woodley, Marshall White), under hammer, $4,820,000, 5 bidders
    As the scattered crowd of 100 utilised the backyard at 40 Anderson Road (trampoline and court), auctioneer Antony Woodley was keen to get things underway … (See more in Auction Reports)
  • Toorak, 11 Flintoft Avenue (, Marshall White), under hammer, $4,350,000, 4 bidders
    The red and orange autumn leaves were tumbling down upon the large crowd in this gorgeous Toorak Street … (See more in Auction Reports)

Bidderbuzz:

  • , 8 Cintra Avenue (Michael Paproth, Marshall White), under hammer, $2,465,000, 8 bidders
    Michael Paproth was in fine form today. And in hindsight, this was a result of good agent work at 8 Cintra Avenue … (See more in Auction Reports)
  • Camberwell, 27 Milverton Street (Hamish Tostevin, Marshall White), under hammer, $2,120,000, 7 bidders
    A crowd of 100. A crowd of varied backgrounds. A crowd champing at the bit to get going … (See more in Auction Reports)
  • Kew, 15 Lytton Street (Steve Abbott, ), under hammer, $1,910,000, 7 bidders
    This was a rare auction opportunity, with the buyer of the first auction property earning the first right to negotiate for the second property straight before it itself went to auction … (See more in Auction Reports)

Special Note: Well done to Simone Clarke who has been with us for 7 years and Valuer Adam (yes he was a valuer in a previous life) who is into his third year at James. In the last week they have proven that being young in real estate isn’t a complete handicap if you are prepared to work hard, listen and consult where appropriate. This week Simone completed 3 difficult deals for 3 very happy clients. Adam’s valuing and bidding was spot on. Its not the number or the result I was most proud of, it’s the way they were all done.

You could almost say Halli had a quiet auction today with only a 5 bidder auction at 4 Canberra Grove Brighton. Halli Moore, under the hammer, $1,705,000.

You could almost say Halli had a quiet auction today with only a 5 bidder Volcano auction at 4 Canberra Grove, Brighton. Halli Moore, under the hammer, $1,705,000.

It’s Easy to Throw in the Towel – Don’t.

Last week’s Market Insight about Stress Fog/Not Panicking and Sticking to Buying Fundamentals has raised a lot of discussions with clients and people who approach us at OFI’s. So we thought it would be helpful to go through the Mindset, James Ratings, Strategy, Result and Price of our client’s last 10 market dealings which coincidentally occurred in the last 10 days.

The May 2015 Inner Melbourne Market is strong, but it’s not impossible to navigate. Here is proof.

James 10 client market dealings in last 10 days – Some Cheers and Some Tears.

The homes below ranged in up to $6m with $2m-$3m being the most common bought or missed price:

  • Malvern Home
  • Malvern East-Home
  • Hampton-Home
  • Studley Park –Home
  • Malvern –Land
  • Kew – Home
  • Bayside – Home
  • Glen Iris – Home
  • East Kew – Home
  • St Kilda – Home

The selling agencies involved were Thomsons, Jellis Craig, Nick Johnstone, Ray White, JP Dixon, RT Edgar, Marshall White and Kay and Burton. Two agencies involved multiple times.

Below are client market dealings related to public sales/auctions.  We are currently involved in 3 private/off market negotiations in addition to below and our client’s did secure another off-market during the last 10 days (Noel Jones). However we totally respect our client’s and seller’s confidentiality in non public dealings and we make no mention of them below.

1. Malvern East Home Above $2m

Client Mindset: Clients looking for a well-positioned long term family home within a set budget.
James Rating above 700: Negative pest and building inspection. Normally that would kill our involvement, however this purchase was about location. The building reports related to major structural issues if you wished to renovate. Our clients did not wish to renovate in a hurry. We arranged a structural engineer, she was brilliant and was able to quantify the expenses involved and put into perspective the issues relating to safety and so forth. Our clients then proceeded.
Strategy: We opened with a bold bid.
Result: The home was put on the market and after a less than enthusiastic effort from only one other bidder. Our client’s purchased the home.
Price: 15% above agent quote. Within James Control Price range. We saw this home holding its value well due to its location and land content – providing a reno was conservative in substance and price.

2. Malvern Home

Client Mindset: Lock and leave home in a convenient to their needs location. Not really fussed which one – in other words we were price buyers.
James Rating: A standard apartment – with acceptable floor plan, garaging and outlook.
Strategy: Put a reasonable price in and wait for a response.
Result: Waited for a response for 12 hours and were told that is was difficult to find the vendors. Next morning agent said it was still difficult to find the vendors. We then applied a  deadline to our offer. Client’s original offer was accepted over the phone 10 minutes later.
Price: Within James Control Price range.

3. Hampton Home Above $2m

Client Mindset: Our client was originally from Asia and had a very specific position and feel in mind.
James Rating above 700: Home presented a real thought dichotomy for our client – not paying too much vs rarity of offering. We advised that some homes in this area of this look and feel had lost big money in recent times when too high an initial price was paid. On the other hand the look and feel of this home when combined with the smaller land size was rare and therefore when would another opportunity come up? Once or twice a year at best was our advice.
Value: We saw value as having a risk factor if we paid too much.
Strategy: Our pre-auction offer was above agent quote and was rejected. Opened bidding at our pre-auction offer. One other bidder came in – quickly announced on the market and bought by our client.
Result: 20% above agent quote. At the Top End of James Control Price range.

4. Studley Park Home Above $2m

Client Mindset: Not looking for this type of home, but fell in love with the look and feel and views.
James Rating above 700: We felt this home was not overly suitable for our clients needs, said that, however it was an exciting home and our client instructed us to try and buy it.
Strategy: We didn’t really get to apply one as an offer came in well above $3m on the Monday before auction. Our advice was to move on. The next evening the agents advised us the offer did not have FIRB approval. We were skeptical as to where this left our client. Advised our clients that mentally getting up for this home again was not a great idea until we had more agent assurances.
Result: The property appeared as sold on the internet the night prior to the auction without any referral to us. The agent said the non FIRB buyer now had FIRB approval four days later. Mmmmm. Disappointing.
Price: 20% above agent quote and above James Control Price range.

Footnote: We have applied to the agent for our client to be reimbursed Pest and Building expenses. To date that has proven unsuccessful. We apply for reimbursement of our client’s pest and building expenses a few times a year, mainly in cases of quoting misunderstandings. All the big major selling agencies have treated these matters fairly (with us) and have reimbursed our clients a number of times in the past. We will be pursuing this further in this instance.

5. Malvern Land Above $2m

Client Mindset: New Home Buyer – after a block to build on. The dollars are important. The scarcity of this offering was key as the potential for bidders from other areas also increased.
James Rating above 700: Good block of land for a new home.
Result and Price: High $2m’s was 33% above agent quote and above our James Control Price range. We weren’t able to secure it.

6. Kew Home Above $3m

Client Mindset: Dream home client always wanted. Get It.
James Rating above 700: Good practical family home on bigger land with a facade that needs a lift. The pre offer, independent and completely free architectural advice (we organised from one of our panel who currently work within the industry) was helpful according to our client.
Strategy: Try and buy before and avoid any unknown overseas buyers. Pre-auction offer strategy was about securing more so than saving as we had a limited budget.
Value: These are the real goers at the moment. Overseas interest can add $100,000 for each $1,000,000 as a rule of thumb.
Result: Went more than our client’s were really comfortable with against two strong pre-auction bidders. However in this market, for these types of homes you have to do that on some occasions. Our client had options and time not to buy. Our client decided with time to think and bought it.

7. Bayside Home Above $3m

Client Mindset: Not sure if this was the one. Not sure on price. Fair enough.
James Rating above 600: Position was excellent. Home had some issues for this price point – but they were fixable.
Value: We saw value a fair way below the initial asking price.
Strategy: To be honest our strategy wavered and was not consistent. I should accept some blame for this as I was not able to pin our client down in this instance.
Result: We missed it to a bidder who was firm, speedy and above our James Control Price range.

8. Glen Iris Home Above $1m

Client Mindset: Concern the market was moving away and needed a home.
James Rating above 600: Good family home that could be made a lot better with some cosmetic renovations.
Strategy: Go before Auction as we had a limited budget.
Result: Our client secured the home in a boardroom auction.
Price: 10% above agent quote and within James Control Price range.

9. St Kilda Home Above $2m

Client Mindset: Really liked the home on first looks.
James Rating above 600: A home that had a number of plusses and minuses.
Strategy: Help the client clearly understand the issues with this home – pest and building (negative) and fundamentals (mixed) as well as their own home value (they were unclear before). Allowed clients to make an informed decision before we began bidding.
Result: We didn’t start after our clients made an informed decision shortly before auction that this home was not for them. We are now looking for their dream home.
Price: 20% above agent quote, but in the circumstances that was fair enough. At the top end of James Control Price range.

10. Kew Home Above $1m

Client Brief: Dream Home Client always wanted. Get it.
James Rating above 600: Great little home – beautifully renovated.
Strategy: Allow client to understand where price would fall.
Result: Our client bought it.
Price: 20% above agent quote and towards the top end of James Control Price range.

Ok so that was 8 bidders - if there is anymore shall I use my thumbs or toes to count them. Cintra Avenue St Kilda, Michael Paproth, under the hammer, $2,465,000

Ok so that was an 8 bidder Volcano – if there are anymore bidders shall I use my thumbs or toes to count them?  8 Cintra Avenue, St Kilda, Michael Paproth, under the hammer, $2,465,000

It’s Easy to Throw in the Towel – Don’t.

What we can learn from above 10 examples:

  • The Market is Manageable. Our buying clients’ success rate was 67% on the ones we started on. If you do your homework you can be successful.
  • The market is hot and you need to be brave and bold. Not ridiculous, but brave and bold.  On one of the homes we bought, the underbidder paid $110,000 extra the next day to be an underbidder again on what appeared to us to be a similar offering. Our bidding was not crazy it was bold and calculated.
  • Stick to the Fundamentals: All the homes we pursued were homes our clients really wanted and most had good ratings. If it doesn’t feel right, be bold in another way and move on. Better a missed opportunity than a mistake.
  • You are not going to get smashed or surprised every time, if you do your homework on price. We gave very accurate price ranges in 8 of the 10 deals.
  • Sometimes it is just too much and you have to move on. Move on but don’t give up or don’t overreact. Our clients didn’t “go crazy” on any of the 10 deals above, even though some had missed before.
  • Finally and most importantly – in this market you need to be a little single-minded, a little single-focused and when you have found the right home you need to be strong, clear and persistent. Sometimes you get lucky, but if you are not clear, then unless you are buying rubbish (poor PPP’s home) you will get beaten.

words_expertsAgent_May-9_2015

Agent Survey: How are stock levels looking for June this year to date compared to the same time last year?

Jenny Dwyer (Hocking Stuart, ): Stock levels are considerably lower than 2014 as we head into the winter months. With a continued low interest rate environment, the opportunities are enormous for vendors to realise an optimum price given the current market conditions. It appears however that a large majority of owners are looking to spring to sell, hopeful that the value of their properties will continue to rise even further during the months ahead.

Sam Wilkinson (Kay & Burton, Hawthorn): Our auction bookings for this time of year are definitely up on previous years. Significantly, we are also seeing a spike in ‘off-market’ sales and general activity. This is being driven by the unprecedented for family homes in the area, which is far out stripping the ‘on-market’ .

Mal’s Note: Interesting to note the complete contrast in Stock Opinions above – its about geography. For example in the first quarter, Kew agents couldn’t keep up yet Elsternwick agents had their quietest stock start for many years.

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