Days to Go to Season Opener
Is it a good time?
Is it a good time to buy? Is this a good home? How much should I pay?
Is it a good time to sell? Is this a good buyer? How much should I take?
Ultimately whether you listen to friends, agents, advisors, read the papers, have a spreadsheet…….are against 5 bidders, 1 bidder, no bidders, on or off market………for $1m or $20m….Ultimately you have three questions to answer in buying or selling a home, whether you think you are process driven or just winging it.
Consciously or subconsciously, you ask and answer three questions.
The gamechanger is: ask and answer the Big 3 Questions well.
If you do. Less stress, better decisions and ultimately better outcomes. More for less.
So, is it a good time to buy or sell?
Best answer to above is Question 1 of 3: What is it I really, really want?
Is this a good home?
Best answer to above is Question 2 of 3: Is this the home or offer that I really, really want?
How much?
Best answer to above is Question 3 of 3: What have I got to really really do, to get what I really really want?
That’s it … your fundamentally good buying and selling process.
Really good buying and selling agents, ask these and supplementary questions to help you buy and sell well. Good agents ask the questions……………(if you let them)………….. you still have to answer them.
Buyer questions:
Is it a good time to buy or sell now Mal or Gina?
Hey, Lesley, what is it you really really want?
Mal, Gina I don’t know what I really really want?
Well Lesley how can we tell you if it’s a good time to buy or sell?
Ok Lesley. Are you happy where you are in Toorak?
Yes, my children love it, and the partner reckons I’m fun to be with?
Lesley, are you coping ok with the money, are you happy in yourself?
Yeah, I’m good.
Ok one supplementary question? With your children growing up and changing school, you wanting to cut back on work and the partner (insert question)…… is your current home going to be the one for you in 5 years.
Mmmmmm (pause)……….(long pause)……… hadn’t really thought, but maybe with some small changes, yes it is Mal and Gina.
Ok Lesley then it’s not a good time to buy or sell.
But Lesley if your home was worth $250,000 less than last year and your dream home that you really, really want was now asking $500,000 less than last year, then it’s a brilliant time to buy and sell. In fact, it’s a brilliant $250,000 better…… than last year.
Is it a good property?
Hey Mal and Gina, is this a really, really good home?
It’s not about the home in isolation Lesley. It’s about how the home’s PPP’s match your PPP’s.
If it was only about the home Lesley, then every Melburnian would be trying to buy the same, one home.
Same with selling. It’s not about the buyer in isolation. It’s about matching what the buyer has to offer P (price), in relation to what the seller really really wants….. eg time and risk and privacy….. and of course money!
Yeah, but Mal and Gina you haven’t answered the question.
Hey Lesley are you an investor, buying for your family, are your kids small, teenagers, left home………are you looking for lifestyle….. capital growth…. These are all different priorities or goals or what you really really want?
Good buying and selling agents want to know what you really really want and then can tell you how this home or that home or another home’s PPP’s match your PPP’s (PRICE PROPERTY AND POSITION) well AND THEN you can answer/decide if it’s a good home or not.
If you’re a good investor, you’re looking for growth and that is primarily land content, well located with good cash flow (probably).
If you’re 80 years of age, then land content is not important ……. you’re looking for a downsizing easy to live in apartment ……
……but that same apartment would be a disaster to buy for a young couple wanting a family.
The questions can get more sophisticated. Question for Reno: Do you have the mindset, skill and family time for a 3 year major reno (yep it takes that long from go to whoa sometimes) ……a 14 yo child at the start is a 17 yo child at the end.. and you almost get divorced …..So is this the home I really really want, even if it seems cheap.
How do I work out value?
Mal and Gina how do I value when the market is all over the place and lots are passing in and some are going gangbusters?
Lesley, you can value well in any market by answering the 3 questions well and you can price well by getting a good buying and/or selling agent to help you in this market.
See that home across the road Lesley. Yep, the asking price is $4,000,000.
Do you want to buy it Lesley? Nope. OK then it’s value is $0 to you.
If you were looking to build a new home on it Lesley? Well, the vacant block next to it, roughly same size just sold for $2,000,000. Ok Lesley so to a new home builder its value is $2,000,000.
Lesley one of our other clients liked it but wanted to renovate all the bathrooms and kitchen and had a $4,000,000 budget. The renos were $600,000 …….so they saw it’s value at $3,400,000.
The range of values or range of that home across the road is $0-$2,000,000-$3,400,000-$4,000,000
What's a good price?
Ok that’s the value Lesley ……what’s the price?
Let work from the seller’s point of view. I’m the seller in this example.
I want $4m and I have three people walk through the inspection (you, the builder and the renovator) and I need to sell it now…….Let’s say right now, as my bookie has rung me and has some of his friends coming around to collect a long term horseracing debt.
So, what do I really really want? I want to avoid broken legs from my bookie.
Who is the buyer I really really want?
You at $0? No.
The new home builder at $2m? No
The renovator at $3.4m? Maybe.
………Hey Lesley, I offered them a quick settlement and the renovator gave me $3.5m. I paid off my bookie and I can still walk unaided.
So, the market range of values on the home before the sale were $0, $2m, $3.4m and $4m.
The price and therefore market value after the sale was $3.5m.
*** Lesley that $3.5m price wasn’t primarily affected by the market, it was affected by other things. It was $4m last week and maybe $4m next week (if the bookie hadn’t of rung me), but this week the market value was $3.5m.***
Now in 2022
2022 could well be a tricky year and many markets could be one seller and one buyer and that makes many of us feel uncomfortable – no herd mentality – no public vindication, like the stock market published buy/sell prices.
However, 2022 is no different to any other year. It’s about good and bad outcomes, from good and bad decisions and good decisions start with the fundamental 3P’s and a good or bad process around 3 key questions.
ADVICE THAT MATTERS is
- What is it you really, really want?
- Is this really really it?
- What do you really really have to do?
Next week our 100 Auction Market Tests start
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