December 23, 2024
Timeless Advice Matters
Timeless Advice Melbourne
We started with one couple (R&L) in 2005 on a $1m buy. We started with the other couple (J&C) in 2013 on a $2m sell. We completed for both in Lockdown with $38m of buy sells.
There were only two buy sell transactions.
One couple we bought, they transformed, we sold and bought again.
The other couple we sold and bought, they transformed and we sold and bought again.
Buy and sell is not our above clients’ day jobs.
All 4 are in the medical field and came independently as marketnews readers.
The homes we/they selected were A-Grade rated, family homes.
Both took a year to complete the buy and sell with 3-10 month negotiations.
One we sold off-market on a long settlement and then bought via EOI to match timing.
The other we bought off-market and then sold through a public EOI to match timing.
R&L and J&C initiated phone calls in Lockdown, we hadn’t spoken for 7 & 10 years. We don’t pester. In both cases, off-markets were involved.
A memorable dinner last weekend at the aptly named Provenance, Beechworth.
Mutually beneficial relationships. Thx M&G
Was this magic/luck or did RLJ&C do what anybody could’ve done in their 30/40/50/60’s? They chose:
- The right PPP’s. Family home A-Graders
- The right People. Advocates. Architects. Financial
- The right actions at key times. Clarity. Advice. Negotiate
Are your /Reports /Values /Strategies evidence-based?
ADVICE MATTERS
Hold 'em, Fold 'em, Walkaway Buying
Auction Report: 15 Loch St. Kilda (Oliver Bruce and Ben Manolitsas). Quote was actually full at $6m to $6.5m and on the market at $6.75m. We fought it out till $7.75m – $1m over a real reserve. This truly was a big number, hats off to Oli and Ben and well done to the buyer – too good.
Auction Report: 48 Bellett Camberwell (Judy Balloch and Scott Patterson). Quote was $3.2m to $3.5m and passed into us at $3.520m and sold at $3.525m. 2 bidders. A balanced result.
Saying No Matters
full story below
Auction Report: Did not sell
Saying No Matters
full story below
Auction Report: 16 Queens Glen Iris (Mark Lawson). Quote was higher at first and then settled to $2.9m to $3.19m. We are glad to have bought it for our clients. No bidding to match our opening $3.0m bid and passed in and we agreed at $3.15m. Really good product – we felt comfortable with agent, the reports and due diligence we did and our clients bought an excellent, high-quality, long-term home.
Auction Report: 236 Waverley Malvern East (John Chartres). Quote was $1.7m to $1.8m. This was disappointing to miss what normally we would not go after. This was a very good buy for the eventual winner at $1.97m. This has the bones for a really good investment. Yes, we know all the negatives – but this is a money spinner with the right reno. Volcano (4) bidding and accurately quoted by John – good agent work. Well done buyer – smart!
Saying No Matters
We do not recommend every home we see. In fact, we say no far more often than we say yes. Saying No Matters.
We were engaged for the first time by buying clients on Tuesday 22nd March to buy a home this weekend Saturday 26th March.
This is some of our key bespoke correspondence. We visited the home Wednesday 23rd March and our initial letter below same day.
Dear F&S
We have enough time but not a lot!
We are about making good decisions.
We do that by asking 3 questions.
- What is it I really really want?
- Is this it. Is this any good?
- How do I get it?
Quick rundown on how we try and match homes to people.
PPP’s – All homes and all buyers have 3 characteristics. A good deal for a buyer is when their PPP’s match the homes PPP’s.
Position (land location) + Property (building) + Price = 3P’s. A buyer can adjust all three to get what they really, really want and to meet the market.
Whilst a home has 3P’s, a seller has only 1 P they can adjust – Price. Although a good seller and agent can, prior to the sale, affect the P of Property through Presentation.
Overall, there are 3P’s and Position is most often, the most important.
There are good homes and not so good homes – irrespective of their match to the buyer.
A-Graders – If the home’s PPP’s are desirable to many in the market we call that an A-Grader. However, it’s all the 3P’s that need to be desirable. You can have a great location, great building and be overpriced in which case you have only 2 desirable P’s – we call that a B-Grader. C-Graders have 1 or no desirable PPP’s and the only usual desirable P is Price – a weak one – this is why C-Graders are poor investments.
So, F&S,
Gina and I have no agenda to buy and sell. Gina and I have an agenda to help you make good decisions. We live our lives very comfortably from giving A truth in relation to you and the property as we see it.
We can be wrong. We can be right but told to do the opposite by you, as your opinion is far more important/correct than ours.
We are not a fence sitters – we do not have the time.
Questions:
- Why are you moving?
- Why are you moving from a B-grader (faults road, façade and single covenant, possibly upstairs needs to be more spacious – plusses – view, land size, internals feels good, finish quality) to a C-grader (faults road, slope/stairs, weak floorplan – plusses façade and size for single level terrace)?
- Is money important? On a very good day your current home could attract closer to $??m and on a bad day closer to $??m – Just my gut estimate – let’s talk more when we see other opinions (eg agents through).
Your target home would probably be low $?? mostly, in weak or strong markets.
The current market is weaker compared to a few months ago (look at down the road pass-in). You could lose $750k here on your sell if not managed well. It’s better to upsize than downsize in falling markets.
- If you sell your new home in 10 years v holding your existing home and selling in 10 years – $200k moving costs, plus maybe $400k in better growth for existing home plus maybe $750k better market timing – $1m to $1.5m better off tax free at least (by staying) – except you are not closer to railway true and that may be critically important. That is not our job to judge the merits on.
- Plus 3 teenagers – I’m sorry but the home they are in would be far more suitable than the home they are moving to in terms
- Current living
- Future living
- Partners and children in their 20s
- So is the train closeness worth it – what about Ubers?
- Are you tied to moving. What about a holiday and spend your stamp duty savings and non-moving costs on better opening upstairs and façade masterplan and landscaping – all done by somebody else – as you are tired!
- What about you move but not to this one on Saturday, to a better home.
- What about I shut up Mal and buy? Ok!
From here we will prepare a report and strategy on Saturday’s home, pest and building and legals and values and council and our ratings etc.
If all this and our reports scare you off – mission accomplished – if they make you stronger on Saturday mission accomplished.
This is not our report just a personal intro letter. Do you still want us to keep working for you? Or are we to OTT?
Mal and Gina
James Home Rating 458/1000
We think there are many more negatives than positives
Some Positives
– It looks nice from the street
– Rear parking at this price level is good
– Cheap for ??
– Good land size for this area type
– Tuckpointing is lovely
– Larger land size for the area type but the actual property type is rare for the area – far more common in inner Melbourne.
Some Negatives
– Busy Road
– Major slope and stairs – ruling out downsizers on a resale
– Floorplan poor and needs a major reno – making the home potentially expensive for what it is when finished
– Rising damp – expensive and a fair bit
– Wood borer throughout and just covered over – some stumps shot and underfloor spongy and poorly ventilated
– Tin roofing over old slates and no insulation – not easy to rectify
– Ceilings in old part problematic
– General vermin everywhere
– Back part is poorly built – blueboard and is cracking around joints
– Movement in front fence
Pricing: Next door sold for almost $??m earlier this month – and it looks good. To get this home to that stage would be $500,000 to $750,000 depending on a professional builder or homebuilder and so $??m seems a reasonable price to pay – which is very different from the likely outcome or current quote.
- Overall, poorly maintained
- Overall, poor growth prospects – with lots of cash needed (that will not actually add value)
- Overall, not an ideal large family home
- Overall, we do not recommend buying this home.
Zoom meeting Thursday 24th March – Clients decided not to proceed. We are now regrouping and meeting next week or week after to consider clarity, options and next steps.
Our total fee for advice to date $0. If we had bought above, our fee would have been 1% plus GST. Our ongoing search/assess/negotiate fee for on and off markets would be 1.5% to 2% plus GST if F&S which to proceed with us. They may well not – as they may well stay put!
Auction Report: The property did not sell.
Underquoting advice hurts sellers. A Truth Matters
Recently another seller lost big time in Boroondara through lying about the reserve.
It put the agent in a difficult spot, scared the best buyer off and allowed our buying clients to come through and do a Bradbury. I won’t detail the immorality and illegality; however, thank you for the dishonesty, it really helped us buy the home.
Why do agents underquote?
Primarily it’s about the underquoting agent, not you the seller. They are taking you for a ride if they say quoting is all about you. It’s not.
It’s about them and their desire to exceed expectations by as much as possible – their strategy is to lower the sellers (and keep them low) and buyers’ expectations by as much as they can, so they can exceed at auction by as much as they can and get some headlines and kudos – who cares if it’s a lower price in the process, because they haven’t tested the best buyer!
What the underquoting agents don’t tell you is – it has a failure rate. So, for every supposed success there are fails. Fails where they get less than if they had of quoted fairly.
Buyers are not morons, and they know the agents who lie and so your home is being viewed negatively simply due to the agent you selected. When the market is rising – underquoting works more often – as its bidders not sellers who determine price. But when the market is easing, as it is now …… it’s a different ballgame, but underquoting selling agents lazily continue the practice.
Why not just say what you want and deal on a basis of truth, not trickery? But say publicly, don’t tell one person one thing and another person another thing – that is not a basis for trust. Make your public quotes accurate (well at least after some initial buyer exploration).
Why not make your quote:
- What you as a seller want – once you are clear. Yes, explore initially.
- Not below any written offers (proper ones)
- Not below where an agent really thinks is fair buyer interest.
It’s not an exact science. When you see James Buy Sell is a co-agent, we do try hard to have a reserve within the range in the final week (at least) and we do ask our sellers and co-agents to be upfront with buyers at all times.
All our most recent sale managed selling campaign quotes.
Range: On market and Sold 1% above the range.
Range: Sold 1% below the quote range
Range: Sold within auction quote range after step quoting to vendors changing reserve
Range: Sold at EOI (Volcano) – 5% above the range
Range: Sold after auction within the auction range
Range: Sold within the range
Range: On market in range and sold 11% above the range (Volcano)
Range: On market 1% above range and sold 5% above the range
Range: Sold within the range
Single Price: Sold within 3%
Range: Sold within the range
Single Price: Step quoted down off-market and sold within 2%
Range: Sold within the range
Range and we auction step quoted up: Sold within the final week range
Range: Sold 2% above the range
Range: Sold 3% above the range
Range: Sold 13% above the range
Range: Sold within range
Summary
- Underquoting does not work for sellers more often than not – in this market
- You should be assertive as buyers calling it out at auction and post auction
- As sellers you are probably getting lower prices by associating yourself with underquoting agents more often than not as buyers recognise who lies.
Our Advice That Matters:
- Be smart in agent choice. Be truthful in quoting – especially in this market – it pays.
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/Reports /Values /Strategies evidence-based?
Buying and selling in less than half the market?
3 months behind Melbourne’s Top End?
