Price is not “is what it is”

by Gina Kantzas and Mal James

Saturday, February 11th, 2023

60 Park St Kilda West

$4.9m - $5.35m

Bidderman 1

Oliver Bruce. Crowd 50

Passed in $5m

9a Marshall Kew

$5.5m - $6m

Bidderman 1

Hamish Tostevin. Crowd 50

Passed in $5.55m. Sold After $5.7m

You Control Price?

Price is not “is what it is”

Your price is not market – we use the term market price as a catch-all when giving an adjective to price. “Market” is mostly attached when we don’t know what to say but feel we should say something – but it’s about as meaningful as “wonderful or low or high.” Your price is your price.

Price is a number and that is a fact, non-fiction if you like.

Market price, low/high price is an opinion, a fiction if you like.

He or she sold for market price of $3.52m is a fact (price of $3.52M) and a fiction (market).

The distinction helps one remain in control at decision time – well that is what I have found.

Price is what you pay or what you get, and the number is almost always different from what you want, what you ask, what others think value is, what the agent quote started at.

In a transaction, the only absolute truth is the number – not the description attached.

And you can significantly influence that number – yes, you have far greater say over that number in relation to your outcome; than the market, than the agent, than yes even I have – if you can remain in control of your emotion by understanding fact from fiction!

Price is not market – it’s not is what it is – price is what you accept.

Everything about price is a version of fiction until a price is struck and then it’s a fact.

Why is this important?

Understanding that price is not, is what it is, but what you decide; gives you control and allows you to decide

what you want,
what’s best for you and
to get the best deal for you.

Even if that deal is a lower price but now as a seller – or a higher price but tomorrow as a buyer.

For example, in a buy sell – a good or bad price is not in isolation the buy price or the sell price but in isolation is the changeover price. A bad sell price to buy a great home makes the sell price a good sell price, a good changeover price (in my opinion).

Price is – what you decide – it’s not is what it is –– you are in control.

Another part of price – that helps you be better buyers and sellers and more in control – is to understand what makes up your price.

It’s not all market, nor all fundamentals and it’s not all presentation.

It’s a combination of all 3 and more elements (like your interest rate – more on that next week) Price is not is what it is.

Price is something you can control by understanding key elements – that is by breaking price down and maximising or minimising each element.

An athlete’s time is more than talent – it is not it is what it is – it is training. Yes, or no? But an athlete’s time is also more than training – it is nutrition, it is mental prep and ……there are elements or building blocks. Price for me seems to have three main building blocks.

Firstly – the DEAL or the icing on the cake or the Individual part of price – this is extra $ on or off the top – what the agent you choose does, the presentation you allow, the luck of a high buyer or low seller – in other words, what happens during your selling or buying campaign. The cake is baked and now you are putting the icing on, to make it more attractive during the deal process.

To put a number on the icing, the deal: I think it can average around 10% of the price. A great agent, good campaign and multiple bidders may add $200,000 to a $4milion home price. The opposite, $200,000 comes off under a bad agent, bad campaign and one bidder (this is for the seller, reverse for the buyer and double it, in a buy/sell)

Secondly, the bottom or base part of the price is the MARKET or the macro part of the price – macro as we are all affected (but not controlled) by the markets.

Yes of course market affects price – demand and supply related to price is a scientific truth (not exact like physics, more inexact like medicine).

Market affects price – but they do not control price – markets are not price.

The markets go in waves of herd emotion and when they’re up you do get more, ceteris paribus (all other things equal) than when the market is down.

The market waves affect price by say 10%, but on outlier homes (great and not so great or A+ and C- grade homes) it can be as much as 20% over a relatively short period of time, like a season.

Your control of markets is you can choose to enter or not enter at any time.

Thirdly, the BIG ELEMENT of price – the PPP’s or fundamentals or characteristics of your home that you buy.

You can control your price by controlling your fundamental choices at buying time. It’s probably at least 80% of the whole $ shebang and sometimes as much as 99%.

Yes, it happens exclusively at buying – at buying you control your PPPs, your Position, your Property and your Price (you can say yes or no) whereas when selling you cannot control Position, you mostly cannot control Property and your only full lever of control is Price (what you ask and what you accept).

JAMES BUY SELL

But wait there is more about PPP fundamentals.

With the power of compounding growth, as time goes by, the influence of the top and bottom elements (deal + market) on price – becomes less and less and Price becomes almost entirely about the PPP fundamentals you have bought.

JAMES BUY SELL

Lightbulb or phone torch in your brain – you can increase your control over price even more with what you buy.

Many of us pay big bucks for selling advice ($80,000 for agent fees) and almost nothing when buying ($1,000 for a building inspection) – yet if you hold the home for one property cycle or more, then it’s almost only about what you bought that matters for your selling price.

Thundering herds of wildebeest going over the cliff in your brain – why do almost 100% of us pay a selling agent fee and almost 0% pay a full buyer agent fee?

Why did for 5 decades we all think it’s just low fat and not low sugar that’s important?

Price is deal + PPP fundamentals + market yes, but the big one is PPP fundamentals on buying and you can totally control that.

Price is never is what it is – it’s never all luck or all market – price is largely what you do and you are very much in control of what you do if you want to be.

Buy Well – now may be the time.

'Round the Grounds

43 Kinane Brighton

$8.5m - $9.3m

Grant Samuel. Tennis Court and solid home – style would not be everybody’s – upstairs will take you back to a childhood excursion

99 Richardson Albert Park

$4.9m - $5.3m

Cheyne Fox and Peter Zervas. Not sure about the overall flow but the living areas, garaging and yard are light and smart.

38 Grant Malvern East

$3.5m - $3.75m

John Manton, Fiona Ansell-Jones, Alana Prideaux. This single level home feels like a large property with a large backyard. Although this 790 sqm block is south facing, there are plenty of clerestory windows, skylights and courtyards. Backs onto the primary school if you want to throw them over the fence in the mornings

26A Linlithgow Toorak

$18.8m - $20.6m

Mike and Rob – classy guys (their opinion) – classy home (my opinion) – Ok they are classy (my opinion) and their opinion is the same as mine on this home.

93 Asling Brighton

$2.9m - $3.19m

Trudy Biggin. Great sized backyard & pool in the right spot, nice enough facade and the bonus – a carport. Downsizers usually look at these single level homes, so it will be interesting if they’re around now.

2 Lovell Hawthorn East

$6.9m - $7.5m

James, Walter and Daniel

Surprisingly a French Provincial new build with some soul – good numbers through – normally not my cup of tea – but this has some class about the build. The position is handy rather than AAA.

40 Fawkner South Yarra

$3m - $3.3m

Anthony Grimwade – needs work for some – for me I would leave as is (the house not Mal or Anthony – we both need work) – as the light comes into south facing rear. car park.

69 Park Road Glen Iris

$3.8m - $4.18m

Jesse Matthews. This 4 year old home has it all for the Glen Iris (Boroondara) buyer including a generous pool and sports court (with basketball ring) in the backyard – have you too noticed the rise in sports court popularity recently?

Richard the Builder

Welcome aboard Richard Collins – well sort of – a contractor to our clients. Licensed Residential Builder of 40+ years – giving our clients guidance and advice on the true costs and alternatives when renoing BEFORE they buy and then project management (if wanted) AFTERWARDS.

Kew - Underground Basketball Court

Is this America I thought as I wandered from the grounds of tennis court, swimming pools, vast spaces to ………. down the lift, past the enormous underground car park and cinema, to wait for it………..and underground basketball court………..yes full height……….yes I have never, ever seen one before, nor a home like it.

Its AAA, it may well break all records (SOI $20m to $22m), yes even in this market and yes there are some recent big ones in Kew, and it will exchange hands, quietly and with possibly less than a handful of people through, possibly before Christmas, but probably next year says James Tostevin and Gina Kantzas.

Phenomenal, the grandest but most practical Boroondara family home with not a cent to spend, modern interiors to die for, combined with the character of a long history – never to be repeated as is – a truly true truism for this incredible home.