A Buy Sell for the Ages
We met our clients in 2011 and worked together till we bought Clendon in 2013. They are very smart and decent people and I thank them for taking me along for the ride. We sold for them multi-list in March 2022. This is their Clendon Story, one of Provenance, PPP’s, Processes, People Management and a Mexican.
A-GRADE STREETS are determined by your neighbours
Click to enlarge
A GRADE PROPERTY = LAND
+ BUILDING
A-GRADE GROWTH =
PRICE RECEIVED
MINUS PRICE PAID
LESS MAJOR COSTS (ZERO)
DIVIDED BY TIME (9 YEARS)
Those that understand the value of provenance; want to know the history of a Namatjira or a Renoir; the restorers’ qualifications on an original Eames or Benz and the likely expected future condition of a Grange or a Rothschild – before they purchase.
What is provenance?
Provenance is a word of French origin (of course) and if you goggle it, you’ll read – it’s a record of ownership of a work of art, used as a guide to authenticity or quality.
Why is provenance important in a home?
To some it’s not; however, for many provenance
- is a form of comfort in getting what you think you are paying for,
- a predictor of future demand and in turn future price
- a confirmation that others who seem influential/classy agree with you
and that’s an emotion combination of trust, that we have seen premiums paid on. (example: Organic v Supermarket brand)
In a busy world, has provenance gone out of fashion?
No, the opposite, brand is provenance, pest and internet valuation reports are provenance, A Sec 32 is provenance.
A better question. Has real provenance (full and deep research) been replaced by superficial provenance (marketing)? Mmmmm, yep! What we are talking about here, in relation to 35 Clendon, goes a lot deeper than the agents logo, the flashy brochure, the made up SOI.
In the World’s, Australia’s and Melbourne’s top 1% of anything, provenance holds great emotional value and if managed well great price value. A reasonable level of time, understanding and detective work is required for what we call real provenance.
When you are looking at any home – there is price, property and position – (3Ps). Position is pre-eminent in provenance.
POSITIONAL Provenance
The world has how many truly great cities? Melbourne is one!
Melbourne has a handful of influential suburbs: Albert/Middle Park, Carlton/Fitzroy, Essendon, Brighton, Toorak and Hawthorn. They are the suburbs that a century of history shows are the centres of influence. For a while Canterbury/Balwyn has added itself to this list.
Within suburbs – there are precincts of influence. Golden Mile, Tara, Sackville and in Toorak there are 6 Boulevards from the river which wealth flows from. Clendon is one.
Within streets there are good and bad numbers, sides and ends – noise, light, sit proud.
Positional Provenance – City / Suburb / Precinct / Road / Numbers
PROPERTY Provenance
Builder, Architect, Renovations.
35 Clendon has impeccable building influences and class provenance.
Influence: noun
the capacity to have an effect on the character, development, or behaviour of someone or something, or the effect itself.
Class: noun
a set or category of things having some property or attribute in common and differentiated from others by kind, type, or quality.
Class: verb
assign or regard as belonging to a particular category
Class: adjective
showing stylish excellence.
How do we know which architects and builders are influential, are class? What are they worth in addition to the land, bricks and mortar?
) Architectural Provenance: Marcus Martin
Wikipedia https://en.wikipedia.org/wiki/Marcus_Martin_(architect)
5 Lascelles (Martin)
6 Lascelles (Martin)
) Builder Provenance:
In new builds – its critical to understand the builder’s reputation and see other works 10 years and older – that is builder provenance. In older builds and renovations, the skills of the builder pass or fail on the time test, more so than reputations.
) Renovation Provenance: Michael Munckton
So many renovations are measured by $ spent, big expansive rooms and finishes, magazine awards. But many renovations and newbuilds are merely one man’s concrete ego waiting for the next woman’s bulldozer.
Only a few architects understand the organism of a classic older building. Most want to put their own stamp on somebody else’s masterpiece and in doing so damage the history, damage the provenance, damage the emotion. Many older homes are just a façade of history with a few plastic emotionless boxes tacked in/on behind – like the staff canteen behind a western movie set.
Most but not all – nobody is saying all old is good, either.
Clendon, Chrystobel and other homes we bought for clients Kooyongkoot Road Scotch Hill, Church St Richmond , Ash Grove Malvern East, have excellent Building and 3Ps provenance.
PRICE Provenance
Influence, class and emotion are all intertwined in a home’s provenance and all affect price – not just now, but in the future.
Having said that, how do we avoid the “any price is ok syndrome?”
Price provenance is how at say $10million and above – traditional ways of specific comparison valuation are rarely possible. Price provenance is about $ opinions that actually mean something.
Clendon Road when bought in 2013 – had two bidders – 150+ individual bids. 4 Bidders in 2022
Kooyongkoot Road (Crossakeil) – “just us and them” – 3 months to negotiate a price. Where’s the price provenance? That’s secret sauce – but price provenance was proven – our clients and the sellers are all experienced negotiators and things would not have proceeded if price provenance wasn’t established on both sides.
Chrystobel: when our clients bought it in the GFC, it had 5 bidders around the table, in the front dining room, competing to $8million. The price had provenance.
When sold in 2021 – also 5 offers on an EOI.
Great Provenance = Branding = Emotion = Price
All homes, at all price levels have provenance – a question for buyers and sellers is, do you know and understand the value of that provenance?
Highlighted from James Buy Sell 2013 Rating: The big picture is very simple: Property: big land size (1880 sqm and tennis court) with a classic home (Marcus Martin and Michael Munckton) Position: at an address (one of “the”streets in Toorak) that people fight over. Price
35 Clendon today we would rate it at 813 /1000. Clendon is an undisputed A-Grader.
Position: It lies on one of Toorak’s six Boulevards. Clendon is a street name that attracts.
Property: The front and back are to die for. The Marcus Martin façade creates a well of emotion from the street in almost all who view it. We always look for Grand Rooms – the garden areas are Clendon’s grand rooms.
Price: Ended up being 20% more than the first agent quote and it was difficult to buy, as we were not the favoured buyer. We knew that and strategized accordingly. We were able to buy the home because the other party stopped – they stopped because they didn’t know what we were doing. Grand home and very difficult to secure.
It started as a discussion on what ifs, gathered momentum in the blink of an eye and was all over seamlessly, successfully and with some happiness.
PPP’s: When the home is an A-Grader you don’t want to turn it into a B-Grader with a poor renovation, agent selection or asking price.
So, what should the asking price be?
Opinions: Multiple people through to hear their thoughts.
A home is sold by opinion. A home is sold well by opinion and good process.
Market: In December the market was weak at $2m to $6m (middle market), but still had some strength at the Top End. A pre-Easter, timed Mexican market was chosen.
With little competition it was an all-in public campaign; for in easing markets, off-market campaigns of this calibre can become problematic, even on A-Graders.
Marketing: When going all-in on a limited time frame, invest heavily in presentation and marketing, as the bell-curve of your best buyers is a real concept.
4 bidders. Sold. The buyers have bought a truly iconic Toorak family home and will have a similar sort of ferocious competition if they choose to sell well, at a long time into the future.
In the meantime, what a home to enjoy.
Cycles: Property moves in deeper and faster cycles than you think. Why? Price is more elastic than you think. Why? Info sources?
Look at the Quarterly Median Price for Toorak. It’s REIV Stats. Note that the $ point on the far left (Dec 2016) is ABOVE the $ point on the far right (Dec 2021). In other words, the median deal in Toorak today is LOWER than 5 years ago.
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Many people think that real estate is all about underquoting, flashy cars, BS and the big reveal – 30 seconds of emotion on the viewing of some ridiculously expensive tap. For others, buying and selling homes is not about drips.
Click to Enlarge
Good People Matter
For some clients it’s about getting what they really really want and to do that they get the right people – give them clear instructions, negotiate a good deal but still pay them generously (for good results) and then largely leave them to perform.
Yes, almost daily updates and yes, a lot of talk and emails, yes tell what is required, but never restrict on how best to achieve it – and if there are issues, then a civil tone in the discussions. These are good managers of people.
Good buying and selling clients are polite, respectful, as well as competent, clear and firm.
Good managers and good agents generally have good manners and good ethics.
Manners, ethics and people skills are exposed in results – in consistently good results.
Our role at James Buy Sell is to understand the mission, build the team accordingly, monitor progress and be a sounding board along the way. Whilst we are usually the first port of call, it is not all about me – far from it. It’s about a skilled team.
People spend $500,000 on a reno and get less added value than spending $10,000 with Megan on aesthetics.
Tiago – look at the hero shots on Clendon – the man is an artistic genius.
Gina and Sim, well you know my views, both have worked with me 12+ years – more than a life sentence – the deals simply would not happen as they do without their skills + ethics.
Other key players are the agent (if single list) or agents (if multi-lists). All agents are not the same – there are good and there are not so good agents.
We recommended one agent (not multi-list) on Clendon and we recommended Marcus – Marcus is a one name brand like Elton or Madonna and one we often recommend and work with him at the Top End. But to keep some perspective: of the last 25 recent sell managements we have engaged Marcus 5 times – horses for courses as they say.
Besides being extremely successful, Marcus is also a deep thinker and hard worker, a bloody good strategist, and above all a decent human being. He respects our role at James Buy Sell and our buying and selling clients. Whilst his efforts and skills on selling Clendon were second to none, he also has a great team himself.
For instance, I saw 20 emails one day with Mandy’s name on it – she is Marcus’s business manager – she probably had over 100 that day – all need to be read and actioned (well).
Rebecca Edwards is another high quality agent we have recommended before and did so on Westley. She has a very pleasant style – but she is tough (resilient), and we saw her at her best on Westley. Not the easiest of deals in a tricky market. But she made all of us look good. She understands ethics and professional standards also.
Rebecca referred us the home we bought off market prior to and then our clients asked her to manage the sell. Auctioneers of the calibre and decency of Scott Patterson also make a difference to the end results.
Focussed, Consistent, Successful. Smarter not harder.
There were many others involved in the buy / sells of Clendon and Westley and if the team wasn’t skilled and didn’t work hard, then it wouldn’t have happened as it did for our clients.
It is about team not one.
Both the above clients were generous of spirit, firm but fair, smart and a bit of fun.
The days are fast disappearing where best results come from fear, lies, lack of mutual respect and intimidation by agents or clients.
So yes, the above sells had some bruises along the way; however big picture, what was wanted, was done. Thank you to all involved.
And well done to the buyers and sellers. Westley is a lovely mid-level family home and Clendon is a classic, a truly iconic Toorak family home. Both were well bought and well sold.
People matter to us and how you treat them matters in real estate results. (It’s both ways).
Mexican (Waves): Can occur twice a year: Labour Day to Easter and Footy Finals to the Cup.
They are where agent led PR stories begin to appear in the papers, at the end of your phone and on social media; with the point of creating some momentum selling of trophy homes.
Mexican (Waves) are powerful energies that live in the Ultra Top End of Melbourne real estate, dormant for much of time, only to occasionally and suddenly awake, as they do at The G.
We abbreviate to Mexican, are excited when we see one building and this is how they work.
1.Opening Stanza are side of mouth whispers about what may be coming to market quietly.
2.The Wave Build by the protagonists, is a balancing act of credible rumours (sales & prices behind closed doors) with the reality of what the punters see on the street (sold stickers).
3.Crescendo & Climax ….the results incited (or not) are secondary to this living, moving group organism ……… however as quickly as a Mexican can rise, its puff can drift, the intensity drop ….. and so, it lies dormant again until circumstances reignite….…. the next time around.
A Mexican starts gently with some lite prosaic gossip.
It is then nurtured by a few Ultra Top End agents, who know and can carry out the proven repetitive actions needed.
These artisans finish with a passion plan of magic ……… screaming emotions, hands in the air and index fingers on computer screens ……. some on-market but most silently (until cooling-off is over) off-market.
A bold result becomes a new whisper, and the wave strengthens. It’s often only a Mexican that inspires some classic homes to surface and some serious buyers to awake.
A truly flying Mexican also highlights the craftsperson’s art of luminating with innuendo, an unknown path, that points to a light in the distance.
This illumination brightens, as an unlikely guild of agents work together (consciously and subconsciously); even though they have competing interests, even though their comments differ, even though in many cases they dislike each other….to show each buyer and seller where that light in the distance really could be.
In 2022 Mexicans, with this bi-annual wildebeest migration timing, will have either a La Niña or El Niño filtering effect on the rest of the Melbourne market….. actually, on the rest of Melbourne.
In 2022 if one builds, then all of us will walk a little taller – as we feel safe in the presence of a bigger positive life force – that group organism, a living thing of wonderment that elucidated into the stratosphere at Easter and again just before the Cup in 2021.
(For the previous few years things had been limp whilst cruising at far lower intensities.)
So mujeres and hombres crank it up and begin whispering sweet nothings into all our ears please.
Noble stories for buyers (releasing of new stock), virtuous narratives for sellers (offer momentum) and great yarns for the rest of us (dreams can still happen).
It really does feel like this week has spun somewhat better at the Ultra Top End and maybe we are at the beginning of something special….. maybe a pre-Easter Mexican…… maybe it was just me.
Adios Amigos
Footnote for Perspective: Marcus has sold 5 and of the last 25 TOP END homes we have multi-listed to sell and 1 of the last 25 homes we have bought – we are not tied to any one agent, but he and his team are one of the best at this level.
Hotter
- Ready to move in + Sharp + Top End + New(ish). Bayside Bidderman
- Stock: High relative to demand
- A-Graders: High relative to demand. Very unusual. Some are struggling and they are genuine A-Graders. Very unusual.
Neutral
- Middle Market A-Graders
- Ultra High: Lack of stock and plenty of money say the A-Graders could be more competitive than the middle market.
- May 2022: The May Market (post Easter) in that $3m to $7m range is shaping up to be bumpy. Bumpy if the stales are not off-loaded prior to. Bumpy if sellers have not adjusted from November 2021.
Colder
- Middle Market $3m to $7m
- B and C-Graders at all levels
- Homes needing Reno’s
- High Quotes
- Bidders: Buyers are there (we have a fullish buyer book) however as bidders they are not there – largely waiting and watching results and prices.
- $3m – $7m: Weakest market segment is $3m to $7m. Excess stock. Bank Lending Contraction. Lack of Wounded Underbidders. Few foreign buyers.
- Stats: Clearance rates and media stats are lagging and we feel do not reflect the market right now.
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 Top End markets, over the same 3 week period.
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. 70%-80% rising. 80%+ On fire.
Opening Market usually sets a direction till Easter (sometimes the whole year)
May Market post Easter leading into Winter trends – capricious market usually.
Spring Market is Footy Finals and Pre-Cup – a major buy sell season. Can see a market turnaround either way, coming out of winter.
Christmas Market is from November till Santa comes. Often the hardest market to sell in, due to oversupply relative to unsatisfied demand.
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
- Contract of Sale
- Asking Price
- 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.
Mexican Waves: Occur at least twice a year – Labour Day to Easter and Footy Finals to the Cup.
It’s about the Ultra Top End, where agent led PR stories begin to appear in the papers, at the end of your phone and on social media; with the point of creating some momentum selling of trophy homes.
It’s a Mexican Wave; a powerful force that lives in the Top End of Melbourne real estate, dormant for much of the time, only to suddenly awake, just as it does at the G.
The Mexican as we call it and how it works.
1.Opening Stanza are side of mouth whispers about what may be coming to market quietly.
2.The Build by the protagonists is a balancing act of credible rumours (sales & prices behind closed doors) with the reality of what the punters can see on the street (sold stickers).
3.The Crescendo ….the results incited (or not) are almost secondary to this living, moving organism ……… however as quickly as it rises, the puff can drift and the intensity drop ….. and so, it lies dormant again until circumstances reignite life ..…. the next time around.
A good Mexican starts gently with some lite prosaic gossip. It is then fostered by those few Ultra Top End agents, who know the proven repetitive actions. They have a passion plan to finish with magic ……… screaming emotions, hands in the air and index fingers on computer screens ……. some on market but most silently (until cooling-off is over) off-market.
The latest result or near miss becomes a new side of mouth whisper and the wave restarts.
A good Mexican highlights the craftsperson’s art of luminating with innuendo a grey path that points to a light in the distance. This illumination brightens as the industry works together (consciously and subconsciously) even though they have competing interests, even though their comments differ, even though in many cases they dislike each other….to show all buyers and sellers where that light really could be, for each buyer and seller.
A living thing of wonderment is clarified during this time. Last year it launched itself into the stratosphere at Easter and again just before the Cup. For the previous few years, others have not left the launch pad or cruised at far lower altitudes until their power faded.
The Mexican with this bi-annual wildebeest migration timing will have either a La Niña or El Niño filtering effect on the rest of the Melbourne market in 2022, as it does each year.
In 2022 if like an MCG Mexican it builds again, then all of us will walk a little taller – as we all like to be in the presence of a bigger force at Melbourne’s Top End.
So mujeres and hombres crank it up and give us some good stories. Good stories for buyers (releasing of new stock), good stories for sellers (offer momentum) and good stories for the rest of us (dreams can still happen).
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.
Argy-Bargy – How can a seller ask for more after a pass-in than the quote? It’s a grey area, as CAV says its completely legal.
If it’s below the top of the quote and passed in – then it seems like all bets are off for the buyer and seller to ask and offer whatever they like to reach a deal in their best interests.
If it’s at auction and above the quote then it may be legal, but we consider a pass-in above the quote wrong. It’s a Clayton’s Quote (the quote you have when you’re not telling the truth).
A pass-in above the quote and no sale to the highest bidder is in our opinion wrong on so many fronts (morally), but CAV says it’s ok legally (go figure).
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.
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
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 that 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.
T
he 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.
Buying and selling in less than half the market click here to find out more?
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