I’m liking now a lot
This market is turning into an interesting one.
It’s becoming a market where a mum and a dad and a family can set themselves up for life. Many good times come out of how you manage the difficult times, the decisions you make, the actions you take.
Full market update on May 100 “Auction” test next week.
1. Make $3million on a $3million home
2. Too many off-markets are not real now
3. Big Multi-list off-market in Hawthorn coming up
Make $3million on a $3million home
How do YOU make $3 million dollars on a $3 million homebuying decision – right now in Melbourne, in the middle of a pandemic?
First the right questions?
- want to?
- understand how to ask the right questions?
- know how to avoid being anchored or distracted?
A $3million buyer and seller would be around $1million better off – by getting a deal 10% above the line as opposed to one 10% below the line on a buy and a sell and that’s after expenses.
In addition, if you have bought a home that performs well and doubles in 10 to 15 years as opposed to performs ok at 50% – then you add another $1,500,000.
That’s $2,500,000 in total on a $3,000,000 home buy and sell – a lot of after-tax savings.
Do YOU want to make your family home work for you?
There are 127 key points to look for in a family home – na, actually there is 33. Come to think of it there is not that many. Maybe 9.
9 good questions – 9 of the right questions will allow a really good decision – depending of course on how you react to the answers.
Are you getting great and accurate answers, but on the wrong questions?
Here are our pandemic PPPs (Price, Property, Position) guidelines for asking the right questions (same as they always are)
- Sleep test
- Mortgage v lifestyle
- Five year Flex
- Surrounding Community
- Land content
- Floor plan feel
- Price transparency
- Price point relative
- Price future demand v supply
Are you anchored or distracted?
So you’ve got a good plan but you are not executing well.
As buyer or seller agents we are doing our job well if:
We don’t let you be anchored or distracted away from what you really, really want.
Hold on Mal – what do you mean by anchored?
Question: Apart from your mindset, what is the biggest plus and the biggest minus to both a buyer and seller getting a good price deal right now, in the Inner Melbourne market, in June/July on a home say $3million and above?
Three word answer: Statement of Information
The biggest price issue for buyers and sellers in the current very low demand and supply market is the Statement of Information and how you or others anchor to it – be you a buyer or a seller.
But it’s not just the Statement of Information or sticker price. Its newspaper headlines, its water cooler zoom talk on the future of home prices and the world. We all anchor ourselves to some things – we all have biases – all our decisions are emotion – even Warren Buffet’s are emotional – he just uses better criteria set to manage the bad emotions.
The SOI says $3,000,000 to $3,300,000. But the owner paid $2,800,000 and the market has dropped.
) Oh, they need to get their stamps back. Oh yeah, I’d should help them with that. Really?
) Actually, they paid a strong price then – I couldn’t see any other prices at that price for similar homes a year or two ago. Still capital growth starts at the price they paid or I pay doesn’t it? Oh yeah – actually NOPE.
) But $3.3m seems a fair price and the bank will lend it to me.
Great – let’s give it away so we can work harder and longer to pay it back.
Why anchor yourself to that price – would Warren Buffett?
But Mal I really want to buy it and Mal I feel bad, I don’t want to offend the agent.
Ok then anchor yourself in the emotion – but you may be paying for it, for the rest of your life.
We advise buyers and sellers to consider and contemplate but don’t anchor on
- Past sales
- Agent pressure
Nobody is saying don’t pay what you want to – just know what you want and know why and what you are paying.
What is the price on a poor $3m buy sell? Is it $10,000 or $20,000 or is it $3million?
Too many off-markets are not real now!
Off-markets, we buy a fair number – but we reject an awful lot more than we buy.
For the inexperienced buyer, many off-markets are not what they are cracked up to be (by the agents). A number of inexperienced buyers are lured by the romance of an off-market – you know that secret listing that only you know about? However, well down the track the inexperienced buyer can often find that the property was not really for sale.
How can that be? After all, the agent told you this off-market home was for sale and even took you there. That may be so, but he may be using you just to get a future listing. Or the seller may have told the agent that if he can get 50% more than market value he may deal. In these and many other circumstances we consider the home is really not for sale.
To find out whether an off-market home is really for sale, you need to ask four questions.
Question number one: Does the agent have an authority to sell this home and what is written on the authority? If the agent can’t say yes, then we recommend you are very careful in your dealings with that agent.
Question number two: Can I have access to the home for my experts? If you can’t get reasonable access for valuers, for buyer agents or for pest and building inspectors or architects, then it isn’t really for sale, as any reasonable seller would give you reasonable and timely access.
Question number three: Ask to see the contracts. If you want to put in a reasonable offer and the seller won’t prepare a basic contract (which takes no more than 72 hours and less than $2000 on most normal homes), then I wouldn’t offer no matter how time compelling everything seems to be.
Question number four: Is there an asking price? If the agents answer something like: “Well, she wants $3,000,000 I think. She is being very cagey. Why don’t you just put an offer in and we can go from there. You are more than likely wasting your time for now. All off-markets should have a Statement of Information, once the campaign begins.
We do not pursue off-market homes if we have made good offers and nothing concrete comes back to us. The home is not for sale now – the seller may be just bored and looking for entertainment, wanting to get a “free val” or trying to appease the agent who is pressuring him or her.
Off-markets are a great way to buy and sell homes but remember the four questions to see if it is really an off-market for sale.
Big One in Hawthorn coming up
In the next month or so we will be launching a very substantial multi-listing family home in Hawthorn.
Why Multi-list the home?
It is a home that in this market best lends itself to a credible off-market campaign due to its price point.
How will it work?
A managing agent has been selected – James Buy Sell, but it could have been any agent who has the skills in managing such a process.
All selling agents and other buyer agents will be invited to bring qualified buyers through on an ongoing basis, once the campaign starts.
The aim is to get all suitable buyers to have an opportunity to view. These buyers could be expats, locals, passive, active, one-off, foreign and more.
Agents are a key link to all these types of buyers through their personal networks and ingenuity.
The agent who brings the buyer will be paid 1%+ GST – we are paid separately.
A key to success:
- Good commissions – that agents believe they can earn.
- Consistent, transparent and no conflict method of sale for participating agents.
- Current and ready to go paperwork and supporting documents.
- Document management
- Open and Covid-19 guidelines management
- SOI discussions
- Campaign guidelines
- Agent contact and management
- Seller client liaison
Why not a single agent?
On this calibre of property – too restrictive on number of buyers
Why not a public campaign?
On this calibre of property – shortness of campaign too restrictive in this market
Multi-list is not for all homes.
If you have a well priced A grade $2million home – we would recommend single list auction with advertising. However, for a $4million home and above we would recommend at least considering
Marketnews Multi-list (contact Mal 0408 107 988)
Let’s get our upper end market and also our economy going again – more jobs, more taxes, more community happiness.
Its free to advertise
Any agent/buyer/seller can participate – so more buyers and more agents.