oc | Thursday 12th December

The Feb Pep

Last week we focussed on buying (and thank you for the emails and texts). This week our Market News’s main focus is buy/sell management (the fastest growing real estate market segment).

Welcome to the early start of Inner Melbourne Top End 2019 auction markets.

We are witnessing the initial rumblings, ahead of the market’s first decent hit-out, which is next Saturday – February 23rd and things have started positively, as most on-the-ground, experienced market watchers would have expected.

Huh?

The market has started positively, hasn’t it been reported as dead and on its last legs Mal!

What do you mean started positively, as expected? Aren’t prices falling?

Yes, prices were falling last year, however, this is February and every February (even the GFC) there is what we call – The Feb Pep.

Please explain the Feb Pep!

Surrey Hills, 3 Vincent Street Surrey Hills. Michael Wood (Marshall White) ISP: $2,600,000 - $2,750,000 Crowd: 60 Opening Bid: $2,600,000 vendor bid Result: Sold after auction $2,840,000 Bidders: 2

, 3 Vincent Street . Michael Wood ()
ISP: $2,600,000 – $2,750,000
Crowd: 60
Opening Bid: $2,600,000 vendor bid
Result: Sold after auction $2,840,000
Bidders: 2

The Feb Pep

Is a positive vibe from increased numbers of refreshed buyers out in the marketplace and it occurs every February. It’s like the first round of the footy season  – the year always starts with some zest – check out the multiple bidder numbers below on the limited auctions we covered today.

Results: Sold, Sold, Sold, Passed In, Passed In, Sold

Bidders: 2,3,3,1,0,3 –  Random Bidderman = 2

OK its a very, very small sample ….but…… this wasn’t happening end of last year!

The big question for experienced market watchers is not how the year will start, its how will the year continue, how will it be in say, May?

So why does the Feb Pep happen?

There’s been no real public market action for 2 months due to the Summer Holiday break so consequently, a build-up of emotion occurs which provides a stronger, more consistent dynamic in the marketplace (buyer and seller), than what we often see at the end of year or post-Easter in say May – when the market can tire.

So February 2019 has started with a bang? Nope, but it has started positively.

We are seeing and agents are reporting, more buyers through opens, than at the end of last year and while it’s a general statement, the market vibe has changed from “Please let it be over” in late 2018 to “Hey, it could be ok, I think” in early 2019.

On Thursday of this week – we were involved in two buy/sells (Halli Moore / Sonja Sendin and Mark Earle)  and today we bought another before auction (Mark Josem/Al Craig). We currently have offers on two more and looking to deal on a 6th before the end of the month, if the ducks line up after due diligence.

2019 has seen a good start for us and follows on from the last real trading week before Christmas when we completed for clients an EOI in Brighton (Alex Schiavo) and an off-market buy in the Gascoigne East (Rae Tomlinson).

Hold your horses!

Before we give any impression that we are calling 2019 early – let’s wait and see what next Saturday’s 23rd and March 2nd and 23rd  bring in our 100 auction test results. This will give us statistical, definitive indications (Bidderman, Clearance, Stock levels) as to what is happening in Melbourne’s Inner Top End Home auction market in early 2019.

Canterbury, 17 Maysia Street. Adam Garvey (Garvey) ISP: $1,600,000 - $1,750,000 Crowd: 80 Opening Bid: $1,600,000 On the Market: $1,700,000 Result: Sold, under the hammer $1,765,000 Bidders: 3

, 17 Maysia Street. Adam Garvey (Garvey)
ISP: $1,600,000 – $1,750,000
Crowd: 80
Opening Bid: $1,600,000
On the Market: $1,700,000
Result: Sold, under the hammer $1,765,000
Bidders: 3

Top 5 steps to Buy Well – in this market

1. Get a professional to act for you – hey how’s that working out for you DIYing?

2. Do your research – real stuff – not the massive amounts of irrelevant information on the internet!

3. Only look for a home with good PPP’s (see last week’s article).

4. Manage the short term market noise (mostly ignore) and focus on the long term market fundamentals (good land, well bought, goes up)

5. Be bold, brave and lead, don’t follow – providing you clearly understand number 3 – what good PPP’s are.

What about away from Auctions – what about EOI’s

Glad you asked.

EOIstats

There is a lot of palaver around right now about Auction v Expression of interest. So let’s look at the stats.

Above is a sample of 30 Expressions on Interest campaigns that we referred to in our article in November of last year and next to them are the results that we confirmed this week.

The clearance rates for EOI’s are 16 from 30 sold and 14 from 30 “passed-in” giving a “clearance rate of just over 50% –  identical to auctions.

Four key takeaways on EOI’s

1. This was a difficult time of the year and quite a few sold and at the Top End of town = not flying, but not dead!

2. However, let us not get carried away with selling agency hype on this method. It’s about asking price more so, than the method of sale.

3. EOI’s do work on some homes better than auctions and vice-versa – it’s a not a blanket thing, we find its a case by case decision.

4. Its a trickier game to play for buyers – as its specifically designed to be confusing, to be smokes and mirrors. That can be good for sellers, but without a really good management team, an unrepresented buyer may refuse to play.

What else are we seeing in the market? 

 Malvern, 7 Silver Street. Justin Long (Marshall White) ISP: $1,950,000 - $2,100,000 Crowd: 80 Opening Bid: $1,800,000 vendor bid On the Market: $2,035,000 Result: Sold, under the hammer $2,035,000 Bidders: 3


Malvern, 7 Silver Street. (Marshall White)
ISP: $1,950,000 – $2,100,000
Crowd: 80
Opening Bid: $1,800,000 vendor bid
On the Market: $2,035,000
Result: Sold, under the hammer $2,035,000
Bidders: 3

Some agent quoting is poor and no it’s not underquoting!

More than at any time in the last decade, the 2019 market is about price and pricing correctly to market (if you want to sell).

Too many times we at James are seeing poor agent work in terms of quoting and method of sale. In fact, we would go so far as to say part of the reason clearance rates are so poor, is the inexperienced/lazy agents’ mindset and sellers’ selection of those agents.

Wow – that’s a heavy statement Mal!

Is it?

Who out there in the market place has not seen a raft a price quote lowerings, which often was a death sign for getting a decent price on a publicly listed home in 2018.

Price drops make some buyers very nervous, as they perceive the market is saying maybe it’s a bad home and shouldn’t be considered. In these more nervous times, this is not a feeling a professional agent should be inflicting on buyers, as their selling clients want all of them.

We have been in a falling market for 18 months – are values still a surprise to some agents!

Hold on Mal. Don’t blame the agents, it’s the seller’s fault. They are only doing what they are told!

Really? We disagree with the statement. Why pay a selling agent the big bucks if he/she can’t give you the seller, accurate and forthright advice.

If you the seller don’t take it, then that is a different matter.

Some agents are not managing their selling client to the outcome their selling client really, truly wanted (meaning not enough agent questions and not enough truthful responses) AND those agents appear to have been frozen into a quoting regime, where more importance is placed on avoiding any enquiry from the CAV, than what is best for their selling client.

Mal this is explosive – are you saying “underquote”

We are not saying that at all. Underquoting is where the agent “knows” the home is worth more than or “knows” the sellers definitely wouldn’t accept the number he/she puts in the Statement of Information  – it’s illegal and immoral and in our opinion, those agents should be prosecuted as it’s deceptive conduct

However, where an agent “knows” a home is worth considerably less and allows a high quote to become public and then lowers it a few weeks later, because he or she was not prepared to give the hard truths (professionally) to his or her selling client early, is for us, borderline unethical and definitely unprofessional. (We are all allowed a mistake or two, valuing is not a perfect science – its when you see consistent price quote dropping or pass-ins from the same agents, that you cry unprofessional).

Flexible, accurate and legal price quoting is an important weapon in a seller’s armoury

Used with clarity on the seller’s needs, legal and changing through the campaign if necessary (preferably only up) is vital to a successful sale.

The right agent in this market is the key to the right price quote, which is the key to maximising a vendor’s price and indeed whether they sell or not.

Malvern, 6 Jordan Street. ISP: $1,950,000 - $2,100,000 Crowd: 65 Opening Bid: $1,800,000 vendor bid Result: Passed in, $1,820,000 Bidders: 1

Malvern, 6 Jordan Street.
ISP: $1,950,000 – $2,100,000
Crowd: 65
Opening Bid: $1,800,000 vendor bid
Result: Passed in, $1,820,000
Bidders: 1

How do you select your selling agent?

Top 5 ways selling agents are often selected and then you tell us if any of these ways, would be acceptable at your place of work, when running a tender process?

Top 5 Criteria?

  • You bought a home from the agent and you thought you owed him the sale, without running a process of agent selection.
  • The agent rings you every three months, so he must care about me and that is my agent selection criteria.
  • He was the cheapest on commission, she gave me a really good deal. (If that’s how they negotiate their own fees, how will they go with your home, one on one against a tough buyer – the stakes are a lot higher for you)
  • Don’t know what his record is like, but he’s a mate down at the gym!
  • He’s a family friend or a relative.

How are those criteria working for you? Would they be acceptable at work as decision-making criteria?

There is a really clear, professional and concise selling management process that for our buy/sell clients got the job done 23 out of 23 times last year, with another completed this week before the auction and all at no extra cost to the seller. Our fee comes out of agent commission (which most times remains the same to market if we were not involved). Yes, its a plug!

Brighton East, 7 Plunket Street. ISP: $2,000,000 - $2,200,000 Crowd: 40 Opening Bid: $2,000,000 vendor bid Result: Past in $2,000,000 vendor bid Bidders: 0

Brighton East, 7 Plunket Street.
ISP: $2,000,000 – $2,200,000
Crowd: 40
Opening Bid: $2,000,000 vendor bid
Result: Past in $2,000,000 vendor bid
Bidders: 0

This is how we selected a selling agent to act for our clients @

4 Walstab St Brighton East

Sold before the auction on Wednesday for an auction due today 16th February by

Selected agents: Halli Moore and Sonja Sendin of Buxton

Campaign management by James Buy/Sell

3 bidders – $300,000 over reserve – see reference below to assess seller happiness.

9 steps to a great sale (even in this market) and all happened at 4 Walstab

1. Smart selling clients who listen to their chosen professionals.

2. Good agent selection process that gives you so much confidence about what to do, when you are in the thick of it – eg quoting, offers, next steps to avoid trouble.

3. Brave clients who invest in the presentation. Another agent said don’t fix up a thing on Walstab, as it will be a land buyer – we ignored that advice and put in 30k to transform the land and two home buyers fought it out – beating the land buyers hands down.

4. Actually engage a good agent, not your “mate” – with a good selling record at this level – as he/she will have the database and experience that matches your home. Halli and Sonja were sensational – no lies, no missed things, extra efforts and all to the agreed plan – they were a bloody good team.

5. Male and Female agent involvement – surely the Libs performance has taught the real estate world something about the importance of competent women at the forefront.

6. Understanding the clear goals of the client. In this case, to sell first and achieve a price second – this allowed flexible quoting – which was the key to collecting interest in this home. Yes, prior to agent selection interviews we (clients and us) had the talk about if they wanted a certain price ahead of selling. If they had of wanted price first then we would have recommended an off-market sale and a different agent. They choose with clarity to sell to market rather than try an achieve a fixed price and so we went to auction.

7. Great management of buyers – lifting the quote – encouraged offers – created an auction before the auction and achieved a figure $300,000 over reserve. All within legal agent quoting.

8. Motivating sellers – all the way through the sellers were respectful and helpful to the agents and were not critical and evasive – great communication and a great team effort

9.  Re-read No 2 & 4 – Only hire a good, experienced agent who is the right one for that type of sale AFTER you have been through a really good agent selection process.

The price achieved on 4 Walstab was a solid one – nobody is saying the buyer overpaid. We thought they bought a really good home and the 2 close underbidders confirmed that. Congrats!

 The seller’s comments on 4 Walstab

“Hi Mal,

Firstly, thanks for your excellent service you really made a difference.

I actually felt like writing: “Mal cut out the bullshit, and got the job done.”

This is certainly true, but that doesn’t seem very professional.

Mal eased the stress of the selling process by giving us a trusted expert on our side.

When my partner and I had to make big decisions, he helped us discuss and understand all our options.

He helped us form a partnership with a great agent, and everyone knew they were accountable to Mal’s straight-talking wisdom and integrity.

In the end, when we needed to make decisions quickly, we had a plan and there is no doubt he helped get the best result.

I would not hesitate to recommend Mal to anyone who wants an experienced professional on their team.

If anyone wants more information, I am happy to speak to them personally.

David”

Albert Park, 49 Beaconsfield Parade. Josh Stirling (McGrath) ISP: $2,600,000 - $2,800,000 Crowd: 60 Opening Bid: $2,300,000 vendor bid On the Market: $2,555,000 Result: Sold under the hammer $2,605,000 Bidders: 3

Albert Park, 49 Beaconsfield Parade. Josh Stirling (McGrath)
ISP: $2,600,000 – $2,800,000
Crowd: 60
Opening Bid: $2,300,000 vendor bid
On the Market: $2,555,000
Result: Sold under the hammer $2,605,000
Bidders: 3

Our buyer’s comments on the home Gina bought from Mark Earle midweek

“The support from the rating system, the methodical process, your experience – I would recommend you both in a heartbeat to anyone.” Cindy

James Buy/Sell buys many more homes than they manage the sale process for.

Being active on both sides gives you a real insight into the market from all angles.

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