Fire ‘n Ice
100 auction test Opening Market - 2023M1
2022 M1 Opening
Bidderman
1.6
Stock
MED
Clearance
63%
2022 M4 Xmas
Bidderman
1.2
Stock
LOW
Clearance
63%
2023 M1 Opening
Bidderman
1.5
Stock
LOW
Clearance
64%
Overall, the market is heating up – even though some segments are still very cool.
Today we finished the Opening Market 3-week 100 auction test (2023M1) and to the casual observer, looking at the overall stats above, you could feel that the market is the same as has been for a year – just limping along. Nothing could be further from the truth – the market has changed dramatically and is coming back albeit on the low stock and albeit in one council only – Boroondara.
But that council is one that matters and from here recent history has shown that Melbourne will follow – Boroondara is not the canary in the goldmine – Boroondara is the goldmine, and the canaries are Aussie-Asian bidding and they’re flapping their feathers.
Momentum has swung around from 5 down markets in a row to a flat market by the Bay and a rising market in the East.
Here is our week at James Buyer Advocates and it shows you point blank, the market differences geographically. All three homes ended in the 3 million range.
Stonnington: (Fiona Ansell-Jones) We bought in the range – one bidder (us) before auction.
Bayside: (Mark Earle) We bought in the range – one bidder (us) before auction.
Boroondara: (Damien Davis) we started a bun fight before auction on a $2.2m – $2.4m quote and got blown out of the water over $3m – multiple strong bidders.
Nothing quite sums up the market so succinctly as the above little anecdote.
Volcanoes (4+ bidders) – remember them, not last year you didn’t – but this market they have returned and 3 huge ones in Boroondara today at Kew, Hawthorn East and Surrey Hills. 14 bidders in total – meaning there are 11 wounded underbidders, all fighting harder next week for the right to live in a family home.
Besides the spread geographically there was also a spread financially. See the wicked photo above of that wicked man Mr. Lachie Fraser-Smith – he knows how to start a party. Huge crowd – on market basically at the top of the quote with 6 bidders fighting it out to nearly $6 million. It wasn’t pocket change and of course 5 of those bidders with over $5m in their pockets, will be fighting it out again next week and the week after until satisfied. Family homes are not investment decisions they are necessities.
But it’s not all beer and skittles – Bayside is still slow – in some ways as slow as last year and not looking to get faster until the Mexican effect of Boroondara ripples through from the East – but overall there has been some improvement in markets from end of last year.
Stonnington is not much better. Basically, outside Boroondara, you are a 1 in 2 chance at selling at auction. 1 in 2 – they are not great odds. Is auction your nirvana when selling?
The good odds, the hot market, and the action stations are Boroondara, and it doesn’t look like ending anytime soon. The follow-up question and answer will be post-Easter, the May market – that will be another test if the stock increases.
Summary: The market is a lot stronger in the East and rising. By the Bay – the price fall is flattening.
Please enjoy the three new offerings
- a really good podcast on Money with Grant Rheuben, treat it as a lecture on how to get a home when you thought you couldn’t AND
- speaking of money @ 30m+ – we are producing a regular news segment on the Ultra Top End – you can see a teaser in the new drop down menus above or click here.
- AND more on money: for our clients we can now supply precinct land prices 2023 when valuing.
See you next week. Mal
Stonnington
Bidderman
1.1
Stock
LOW
Clearance
52%
Bayside
Bidderman
1.2
Stock
LOW
Clearance
56%
Boroondara
Bidderman
2
Stock
LOW
Clearance
81%
Main Photo Above: Randall
Podcast: Grant Rheuben. Australia's No 1 on Money.
There is a fair bit ot wade through – but its 20 minutes that could make the difference between you just looking and buying your dream home before Easter. Super informative.
We were out there today in force 'Round the Grounds
Boroondara Live!
Camberwell Canterbury Glen Iris Hawthorn Hawthorn East Kew
Nov 19 2022
Bidderman
1.5
Stock
LOW
Clearance
70%
Mar 18 2023
Bidderman
2.9
Stock
LOW
Clearance
86%
Kew, 75 Charles Street
Photo: Randall
Camberwell, 806 Riversdale Road
SOI: $2,400,000
Sales Agent: Damien Davis – Jellis Craig
Before Auction: $undisc
Bidders: 1
Surrey Hills, 13 Thornton Avenue
SOI: $2,450,000 – $2,695,000
Sales Agent: Annabelle Feng – RT Edgar
Crowd: 50
Opening Bid: $2,400,000
Passed in: $2,520,000
After Auction: $undisc
Bidders: 2
Auctioneer Paul Walker called for opening bids and $2,400,000 issued from bidder 1, swiftly followed by a second bidder. Extended encouragement failed to attract further bidding so was passed in at $2,520,000.
Kew, 75 Charles Street
SOI: $2,800,000 – $3,050,000
Sales Agent: Nick Whyte – Nelson Alexander
Crowd: 35
Opening Bid: $2,600,000
On the market: $3,000,000
Under the hammer: $3,425,000
Bidders: 4
Two bidders led the charge with two more adding upwards pressure midway through. Sailed past the on market call with the original bidders battling until the hammer fell.
Hawthorn East, 31 Clive Road
SOI: $5,000,000 – $5,500,000
Sales Agent: Lachie Fraser-Smith – Jellis Craig
Crowd: 100
Opening Bid: $4,500,000
On the market: $5,600,000
Under the hammer: $5,855,000
Bidders: 6
Two bidders in early feeling out the situation while another two warmed to the task as the market price approached. It was then that two heavy hitters entered and slugged it out in a two-way battle for the keys.
Surrey Hills, 41 Kennealy Street
SOI: $2,910,000 – $3,200,000
Sales Agent: Walter Dodich – Kay & Burton
Crowd: 60
Opening Bid: $2,900,000 VB
On the market: $3,215,000
Under the hammer: $3,360,000
Bidders: 4
Auctioneer Walter Dodich’s opening vendor bid of $2,900,000 encouraged two bidders, followed by a third, who rapidly took the price to $3,360,000 where it sold under the hammer.
Canterbury, 21 Torrington Street
SOI: $3,000,000 – $3,300,000
Sales Agent: Michael Armstrong – Jellis Craig
Crowd: 40
Opening Bid: $3,000,000
On the market: $3,400,000
Under the hammer: $3,405,000
Bidders: 3
Three bidders swiftly took the price to $3,400,000 where it was declared on the market, followed by a hammer-fall at $3,405,000.
Deepdene, 7 Walsh Street
SOI: $2,700,000 – $2,900,000
Sales Agent: James Tostevin – Marshall White
Crowd: 50
Opening Bid: $2,700,000 VB
Passed in: $2,700,000 VB
Bidders: 0
A $2,700,000 vendor bid failed to encourage bidding activity from the crowd, so the property was passed in on this initial bid.
Stonnington Live!
Armadale Malvern Malvern East Prahran Richmond South Yarra Toorak
Nov 19 2022
Bidderman
1.1
Stock
LOW
Clearance
40%
Mar 18 2023
Bidderman
1.3
Stock
LOW
Clearance
71%
Glen Iris (Stonnington), 11 Boyanda Road
Photo: Kieran
Prahran, 34 Lewisham Road
SOI: $2,600,000 – $2,800,000
Sales Agent: Carla Fetter – Jellis Craig
Before Auction: $undisc
Bidders: 1
Malvern, 34 Glendearg Grove
SOI: $3,800,000 – $4,000,000
Sales Agent: John Manton – Marshall White
Crowd: 100
Opening Bid: $3,800,000 VB
On the market: $3,950,000
Under the hammer: $4,320,000
Bidders: 3
Without needing to take a half-time break, auctioneer John Manton took rapid-fire bids to drive the price to $4,320,000, selling under the hammer.
Glen Iris (Stonnington), 53 Maitland Street
SOI: $2,700,000 – $2,900,000
Sales Agent: James Tomlinson – Marshall White
Crowd: 40
Opening Bid: $2,685,000
Passed in: $2,910,000
After Auction: $undisc
Bidders: 2
A vendor bid of $2,700,000 was placed to kick things off, when bidder 1 decided to join they took the bidder backwards at $2,685,000 when bidder 2 then joined at $2,700,000, the duo took the bids to $2,910,000 when the home was passed in and sold after.
Malvern, 62 Stanhope Street
SOI: $2,850,000 – $3,100,000
Sales Agent: Fraser Cahill – Marshall White
Crowd: 35
Opening Bid: $2,800,000 VB
Passed in: $2,800,000 VB
After Auction: in excess $3m
Bidders: 0
Without crowd participation following the opening vendor bid, the property was passed in.
Glen Iris (Stonnington), 11 Boyanda Road
SOI: $3,700,000 – $3,900,000
Sales Agent: David Volpato – Marshall White
Crowd: 50
Opening Bid: $3,600,000 VB
On the market: $4,080,000
Under the hammer: $4,110,000
Bidders: 2
A keen first bidder was not to be outdone, battling another party for the top spot and securing the property under the hammer.
South Yarra, 29 Macfarlan Street
SOI: $3,800,000 – $4,180,000
Sales Agent: Will Hocking – RT Edgar
Crowd: 30
Opening Bid: $3,800,000 VB
Passed in: $3,860,000
Bidders: 1
Following opening vendor bids, a last-minute bid was enough to secure the first right to negotiate.
Armadale, 16 Armadale Street
SOI: $2,950,000 – $3,200,000
Sales Agent: Will Bennison – Jellis Craig
Crowd: 24
Opening Bid: $2,800,000 VB
Passed in: $2,900,000 VB
Bidders: 0
After only two vendor bids, the property passed in. The crowd literally, and figuratively, on the fence.
Bayside & Port Phillip Live!
Albert Park Brighton Brighton East Elsternwick Elwood Hampton Middle Park
Nov 19 2022
Bidderman
0.9
Stock
LOW
Clearance
13%
Mar 18 2023
Bidderman
1.3
Stock
LOW
Clearance
67%
Photo: Catherine
Brighton, 94 Wilson Street
St Kilda West, 8 Longmore Street
SOI: $2,000,000 – $2,200,000
Sales Agent: Ben Manolitsas – Marshall White
Before Auction: $undisc
Bidders: 1
Hampton, 62 Thomas Street
SOI: $2,600,000 – $2,860,000
Sales Agent: Robin Parker – Marshall White
Crowd: 70
Opening Bid: $2,750,000
On the market: $3,050,000
Under the hammer: $3,080,000
Bidders: 2
Two bidders fought past the reserve of $3,050,00 with the hammer falling to a delighted couple at $3,080,000.
Brighton, 94 Wilson Street
SOI: $3,200,000 -$3,400,000
Sales Agent: Stefan Whiting – Buxton
Crowd: 45
Opening Bid: $3,000,000
Passed in: $3,000,000
After Auction: $undisc
Bidders: 1
Johnny Clarkson keeps it short and sharp in the blazing sun. Encouraged by an opening bid of $2,950,000 he suggests placing a vendor bid above but the lone bidder agrees to the rise. The property passes in at this figure of $3,000,000 and the buyers agree on a selling figure shortly after.
Black Rock, 24 Bent Parade
SOI: $3,750,000 – $3,850,000
Sales Agent: Romana Altman – Buxton
Crowd: 67
Opening Bid: $3,700,000 VB
On the market: $3,900,000
Under the hammer: $3,920,000
Bidders: 3
The blustery winds brought out a large crowd of onlookers and 3 bidders to battle it out before this builders own bayside home sold under the hammer.
Middle Park, 53 Canterbury Road
SOI: $3,600,000 – $3,800,000
Sales Agent: Nicholas Hoo – Marshall White
Crowd: 17
Opening Bid: $3,500,000 VB
Passed in: $3,500,000 VB
Bidders: 0
There were no bids from the crowd today at 53 Canterbury Road. Auctioneer Nicholas Hoo opened, and then later closed, the auction with a vendor bid of $3,500,000.
Hampton, 93 Orlando Street
SOI: $2,875,000 – $3,150,000
Sales Agent: Matthew Pillios – Marshall White
Crowd: 40
Opening Bid: $2,800,000
Passed in: $2,925,000 VB
Bidders: 1
Matthew Pillios opens with a bid from the crowd of $2,800,000. In an attempt to garner some competition, he entices the crows with a vendor bid of $2,925,000 but the crowd is quiet and watchful instead, so the property is passed in at that figure.
Sackville Ward Classic - 2430 sqm - $20m - $22m
Multi-Agent - Off-Market
Kew
James 0417 003 333
Marcus 0411 411 271
Multi-List Off-Market
Brighton
$3.125m
Elwood Style T/House
Lift & Double Garage
Sam 0425 702 574
Halli 0403 777 661
Simone 0403 857 266
Dating a Keeper
Let me give you some relationship advice of great value and I should know – I have been in 3 relationships that were strong at 5 years and over by 10.
My angles that attracted at 5 years were edges that repelled at 10.
I was on-song and hip at 5 and off-key and dated at 10 years.
I was a house, not a home!
Why what changed? I had the same slightly overweight façade – the same financial semi-competence and whilst I don’t want to discuss my backyard – I can say to outsiders, I felt the same deal.
Why then a drop in feelings towards me? Why at 5 years was there certainty; at 7 a question mark and too late and by 10, certainty again but on the opposite spectrum to 5 years ago.
Why don’t I age like a good red wine? Why am I more like bubbles – enjoy quickly before I go flat.
Why? Well, I am a house and not a home.
3 incarnations? How could I be delightful then despised – then to the next delighting then despicable and then more recently a delight till again a disappointment?
Renovation?
Is there another iteration, can one keep renovating to attract – is there anything to repolish to cover what is missing?
Am I archetypal rather than a classic? Is it me or my owners? Am I just too different for mass appeal?
Am I some strange building but not a home?
Times, tastes and people change. Maybe with all that change, I haven’t moved with the times. Maybe I’m a vendor still overpricing my value, yet again.
Maybe I am still a spa and or a butler’s pantry rather than the required mini basketball court – or should I be land, a big block of it, and then who cares about my street-appeal?
2 out of 3 tests ain’t bad Mal – but it ain’t enough.
No question that initially I had something. On the first date I attracted – the first impressions test passed. Obviously, I got through the sleep tests – only to fail at the longer-term gut test.
My PPPs
Positionally I am an agent’s nightmare; being into my 5th decade having only moved 40 metres. All my relationships have been in Brighton, despite growing up a Donny Boy. Positionally I’m solid.
Price: I always pay market price, but I accept the value I offer in return is seen by some as unders.
So, it comes down to my P for Property.
As a Property I look good brand new and after 5 years I am still good, but seemingly without explanation by 10 years I’m dated and my resale without significant rework attracts no premium – in fact, there is baggage found and a discount demanded.
And this is my advice to you on whether you date a keeper….or not.
If they are not, if they are a house but not a home, then get rid of them at 5 years while the sparkle is still there, rather than go through the denial of change before ending in a loss to the market on a 10-year hold.
Tastes age, we age, buildings age. Land does not – but we are not talking about substance, we are talking about builds which in a shallow world are seemingly the main game.
Following on, if you buy “brand new” at 5 years thinking that in another 5 it will still be “brand new” then mmmmm – that is high-risk time for this uncertain dating period.
After 10 years it’s all so obvious and the market pays accordingly and almost only for the land unless some plastic surgery has successfully reinvigorated. But those renovations can be costly and not always successful – I know, I have supported a regime of therapists for years for little return.
Beauty is only skin deep – so to be a keeper – on the inside, you must be light and flow and have proportion, because whilst your façade attracts, only your substance maintains value.
A cunning plan – an out-of-towner – another culture – one that sees foibles as fruit from a different tree. Immigration does see some builds differently.
As one market is closing, accept the insanity argument of repeating again, think laterally, and look in different ones, for there is value in holding keepers – and 5 – 10 years is a most critical time!
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James Buy Sell Jargon
NEW TO JAMES BUY SELL? WELCOME – THE JARGON OF 4 SEASONS and 100 AUCTION TESTS: 100 Auction Test is where we randomly select Top End homes before they go to auction and then we turn up and report on all results, so as you can get a true picture of the current Inner Melbourne Top End Market. We do it 4 times a year in the major markets.
Opening Market M1 usually sets a direction till Easter (sometimes the whole year)
May Market M2 post Easter leading into Winter trends – capricious market usually.
Spring Market M3 is Footy Finals and Pre-Cup – a major buy sell season. Can see a market turnaround either way, coming out of winter.
Christmas Market M4 is from November till Santa comes. Often the hardest market to sell in, due to oversupply relative to unsatisfied demand.
Demand – Bidderman. How many bidders per auction? A very accurate measurement of market depth when taken over a wide sample. Number of Bidders / Number of Auctions.
1 bidder average – Falling Market. 2 bidders – Rising Market. 3 bidder average – On Fire
Supply – Stock Levels. It’s a nuanced opinion measurement, more so than scientific, as there can be a flood of unrenovated homes, but the market wants ready to move in.
Clearance Price % – Many data points give exaggerated readings as agents choose to leave out the bad news (unsolds). We choose the sample before auction and track down every result. The higher the clearance rate, the more agreement between buyer and seller on price and if Bidderman is also strong this shows prices are rising.
Measurements: Under 60% falling. 60-70% some stability but easing if below 65% consistently. 70%-80% rising. 80%+ On fire.
GLOSSARY
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 3 P’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.
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.
Volcanoes – When the market is hot you see increasing numbers of 4 or more bidders on homes. We call that a volcano. 1 or no bidders we call a duck.
Wounded Underbidders – Buyers who miss, go harder (more money) next time to avoid the hurt of missing out again. When there are multiple unhappy buyers, who have missed multiple times (wounded underbidders), the market rises quickly.
Cautious Buyers – Non-Bidders – Potential buyers who see lots of pass-ins, tend to not want to bid because their fear of overpaying is greater than their desire to buy and get out of the market.
Stales – Number and length of time a property remains unsold. The older the stale, the weaker the price (as a general rule). The more stales, the weaker the market as they clog up the market creating an oversupply.
Off-market – Homes that are for sale but are not advertised in the mainstream media like realestate.com.au. Over say $5 million there are considerably more homes off market than on market. More than ½ the homes we buy and sell are off-market.
Pre-market – Homes that some agents say are Off-market. Pre-market homes are homes coming to market but are not yet advertised and are often not really for sale at the moment.
On-market – usually refers to homes sold with major advertising say on Domain or realestate.com.au
Not for sale (and the 4 ducks) – there are many homes that are also said to be Off-market or Pre-market homes that are not really for sale. Why? Seller is testing the market. Agent is testing the market. Agent has no work. Seller wants a free valuation or some company.
For a home to be really for sale off-market, it needs to pass the 4 Duck Test.
- Agent Authority 2. Contract of Sale 3. Asking Price 4. Easy Access.
Good ól Boring Process – When you are cooking a cake – do you get your best results by making up the ingredients, the amounts and throwing them into together, hoping for the best? If you do great, but I’m not hungry. A good recipe is a good process. And in property a good recipe is 3 Questions starting with what do I really really want? If you can’t work that out, then engage a good agent. When you answer that question, you go to the 2nd and 3rd questions and make good decisions. Good decisions lead to good outcomes – for you.
Market Prices – Every price is supposedly a market price. It’s a lazy concept.
Market price is a living organism – lets imagine it’s like a human. The market is the blood, the circulatory system. The PPP’s are the bones, the skin, the main organs and we agents and agent marketing are the lipstick, perfume, clothes. All 3 – blood, bones and lipstick make up a price and its attractiveness, it’s not just the market.
Market Values – Values are opinions. All opinions have vested interests and biases. What the council, the bank, the agent, the buyer, the seller values a home at will all be different.
Last year two valuers came to a home I was looking to refinance – $4m home – 3 weeks apart the valuations were approx. $700,000 different – that’s qualified valuers – same criteria.
Market Value v Market Price – One is an opinion before the deal and one is the actual result after the deal.
Quote Range: It is thought to be an agent estimate of final price – it is not. See Quoting
Under the Hammer: is when a home is sold to a buyer under the auctioneer’s hammer that is on the street or in the home in front of crowd when we says sold – it can be just clapping his hands together – under the hammer refers to the old gavel now only sometimes used.
On the market: (different from on-market) is a colloquial term that an agent or auctioneer uses to state we are now at a level that it will be sold (now) even if there is no more bidding.
What affects markets?
Demand and Supply – yes sir re – that is what really affects markets.
Some Key Supply Variants
- Government restrictions
- Lag Times in supply of demand changes
- Builders and materials
Some Key Demand Variants
- Money – Bank credit and community wealth
- Overseas Buyers, Interstate Buyers, Migration
- Stock Markets and World Events
Predicting the Future
Economists, banking leaders and other market predictors are like horse race “experts” – entertaining but of little long-term value. In 2017, 2018, 2019, 2020 the pundits on where the market was going got it wrong, dead wrong 4 from 4. A coin toss should have got at least 2 from 4. The only pundit we listen to with respect, is the one that says they don’t really know.
Rising / Falling / Easing – Humans are herd animals.
When there are a number of pass-ins the market eases. When combined with increasing stock coming on and more stales, the market falls more sharply.
Increasing numbers of wounded underbidders and less stock the market edges up – when wounded underbidders combine with loose bank lending and tight stock and increasing migration, then market prices begin to run away.
A home can easily be 5% more or less in a week (1 bidder drops away) and parts of the market can change by 5% in a month. A property can change by 10% during the length of an auction campaign. It is very similar to the ASX in terms of its variability – it’s just not as transparent.
Individual property prices are very fluid, they are far from fixed as many think and claim.
Market Conundrum – often the best time to buy or sell is when everybody else doesn’t want to – eg counter to the markets.
Buy or sell timing maxims we live by? Assuming it’s an A-grader. If you really, really like it, buy now. If you really, really like it never sell.
Which brings us back to Doe. Doe is dear, a female deer. This is why 10,000 people read Marketnews.com.au. It’s the only property thing that makes no sense (smiley face).
Underquoting – is when an advertised price (an agent quote) is below one of
- Agent estimates of value or
- A written buyer offer or
- The Vendor reserve
An agent quote is not a valuation, it is not a fixed sticker price – a quote is seen by my industry as a vehicle to attract bees (buyers) to the honey (home) and that’s ok, if legal.
However underquoting is unethical but widespread. Underquoting has been endemic in the last week of an auction campaign in the markets of 2015, 2016, 2019, 2020 and 2021 – a new falling market may be different.
Underquoting is a badge of honour for some selling agents – for god sake there is cheering from the rafters with every $1,000,000 over reserve. It’s celebrated not put into balance or condemned in the media. Please note sometimes genuine market forces create $1,000,000 over reserve when it’s not an underquote (celebrate then) – but when it is happening week in and week out and to the same people and same companies, then they must be very unlucky or incompetent agents or they are serial underquoters.
Underquoting can work in a rising market – work for the agent and seller that is, not the buyers.
Underquoting can hurt inexperienced buyers in 4 bidder auctions BUT
In many instances in falling markets and with B and C Graders it actually hurts the sellers – e.g. duck or 1 bidder auctions.
Underquoting is fixable with a buyer education program as to what a quote is and what it can and cannot do AND moveable (not fixed) step up and step down written legal quoting AND timely stated auction reserves say ? days out from an auction AND mostly an industry desire, but there is minimal desire within my industry or the CAV or the government.
Legal Step Quoting: A term we invented to explain moves/strategies in quoting. We used to have a problem with it, but now we see it as sensible practise on behalf of the seller – so long as it is down legally and actually done. Step quoting if done legally is simply moving the written quote during the campaign in line with offers, changing or firming vendor reserves and any changing agent’s opinion of likely value.
Illegal Step Quoting: Is when the agent has a written quote, then tells you a higher quote on the phone and then an even high quote after you offer.
Legal Quoting: It is legal (and we consider ethical and professional) for the agent to quote above the seller’s reserve providing it meets the other two key criteria.
Legal Quoting: When it’s on the market and unexpected market forces take it well past expectations. Our only argument is how often can that happen to one agent or agency before it becomes obviously illegal.
Quoting even with the best intentions (and we have them) is not a perfect science, just as market valuations and your buying estimates are not.
James Buy Sell Process – Ethical quoting brings more real buyers and sellers to you:
Early Campaign: We quote to attract buyers but not below what we reasonably think the home may go for. Where the seller has a firm price, we do not quote below that price either.
We suggest the seller keeps an open mind on reserve (early days) if their main focus is to sell.
If the seller has a firm fixed reserve and it’s too high, then not only will he or she be unlikely to sell but he or she will get no feedback on price and therefore he or she could compound the selling issue down the track – a double negative for selling – eventually getting a lower price.
Middle of Campaign: We may Step Quote (change the quote, preferably up, but sometimes down to more accurately represent the sellers thought on possible reserve and/or feedback from buyers and/or if we have had an offer than has not been accepted)
Advertised final week of Campaign: We genuinely try and have the quote reflecting a seller reserve and where James Buy Sell now thinks the majority of buyers are. Please note: it is not an exact science, and we cannot predict all buyers (often buyers do not tell the door agent anything or say lower amounts – both sides can be guilty of misrepresentations).
We care about buyers and our quoting reputation. If you do a building inspection in the last week of the campaign and the reserve ends up outside the quote, please ring us and we will probably refund any professional building inspections up to $600.
The current Underquoting enquiry’s timing relates to a forthcoming election, is running into a falling market where underquoting is less noticeable.
The best way to deal with underquoting (currently) is through your own quality research or a quality buyer agent or if selling then an ethical selling agent.
