The Ask
Saturday 13th of November 2021
Records Broken This Week
Kew
Geordie Dixon – Jellis Craig
Mentone
Romana Altman – Buxton
Market Changed?
Sold Before Auction with an circa $8m knockout bid – circa $1m above the rest.
Kew
Another week of opens with fewer than expected buyers are the words out of every agent’s lips we have had contact with this week. The market has levelled on a number of homes and those that remain overpriced may well feel the pinch going into Christmas, as clearances ease, as even more stock comes on.
However, at the Top End on the A-graders, we are seeing the market as remaining healthy. Below are results over $5m this month. That’s a solid list, more off market results to add and we are not half-way through.
This week, home records were broken in Kew and Mentone, well done Geordie and Romana and Judy.
And to the buyers on all congrats. You have bought unique pieces of Melbourne real estate that will serve your families well for years to come.
Sackville Ward for two and Cotham Road is a powerful, striking home, so very well-proportioned inside and out.
Milan Street is truly a lower Bayside one-off.
Well bought. Well sold. Rare. AAA.
Source: REIV
Last week we talked about The Ask (the agent quote) – a much under-rated tool in the seller’s kitbag. This week overlaying the Mentone record below, we have repeated the article (You Can’t Handle the Truth) and evidenced (full pre, during and post auction reports) where the Mentone quote was used effectively, legally and with full transparency.
In other words, it was a robust transaction but better for the buyer (full transparency) and the seller (agent worked almost exclusively with the best buyer).
The Bayside market and some internal works contributed to Milan’s 50% capital growth in 2 years, however it was more than that. As an A-Grader (PPP’s) it was also about how we bought and co-sold it with our clients.
Note: If it was bought for $3,500,000 in 2019 (expected value) and sold for $4,450,000 in 2021 ($50,000 over the initial quote and above the underbidders) then the growth would have been ok and market, but half @ 27%. On Wednesday it was more than 54%. More than $750,000. More than double the market.
The right people, the right strategies make a difference.
Advice that matters.
Sold at Private Auction on Wednesday
Thank God that was Lucky!
No, it wasn’t! It was skill, guts and determination; as well as great presentation, trust, clarity and good ol’ fashioned belief. Open and transparent to buyer and seller at all times, all the way through to a record price.
Evidence Result
Quote
Week One: $4,000,000 to $4,400,000
Week Two: $4,200,000 to $4,600,000
Week Three: $4,600,000 to $5,000,000
Method
Week One: EOI with no end date
Week Two: EOI with no end date
Week Three: Private Auction Wed Nov 10
Auction Day
- 6 interested parties invited
- Bidding invited @ $4,600,000
- Offer of $4,400,000 rejected
- Passed-in vendor bid @ $4,600,000
- Parties left
- 0 Bidders
Sold 1 hour after $4,880,000
Bought 2019 $3,150,000
Record Price for Non-Waterfront home Mentone
AAA Grader
- Presentation brilliant
- Well negotiated buyer and seller
- All within the agent guide and quote
- Great sale campaign
The Ask
$1,000,000 over the quote, over the reserve screams the headline.
“I was totally surprised” says the agents.
“I was shocked” says the seller.
How is either of those scenarios necessarily good professional practise?
At the TOP END low stagnant quoting fails many (not all) sellers.
When an agent’s all-in focus is to engage many buyers at the lowest levels, leaving no time to test the best buyers at the highest levels, how is that good practice?
When you quote $6,000,000 to $6,600,000 to attract loads of tyre kickers (yes there are many), but only one buyer shows up at $8,000,000 – how does the low quote get anything other than maybe $6,700,000 at a pass-in.
When you have 4 bidders to $6,600,000 but one bidder at $8,000,000 – how does an auction get anything more than $6,700,000, when good pre-auction quoting hasn’t tested the real buyer.
How’s it good for the seller when the best buyer hasn’t been recognised and explored?
Low quoting can and does reward the buyer and really harm the seller.
If some TOP END quotes weren’t so timid, then the agents wouldn’t spend their time (and the seller’s time) dealing with the masses who aren’t going to buy and more of their time with one or two who are.
How do we buyer agents buy so many? We don’t low quote our clients when buying – if anything it’s the opposite. A good buyer agent tries for low, simultaneously educating a client on the what-ifs at higher levels than a low quote. Come auction day few surprises.
Logic says if more buyers were educated by skilled selling agents and given time to think at higher levels prior to a deal, then competition could start from a far higher base.
How many wounded underbidders go higher after a real-life loss. Wouldn’t it have been better for the first seller, if the first selling agent had done a better job on educating potential underbidders.
Yeah, I know what you are saying, Mal and Gina we all add 10% to the quote, so in a way, we are higher.
We haven’t got time in this article to talk about the value of trust in a negotiation of the future – all we can say is: désolé la confiance est importante dans un accord
The Ask or Agent Quote is one of the most powerful tools in the kitbag, yet it is the:
- Most misunderstood
- Most abused
- Least well used
An agent quote or asking price can be more powerful than:
- Presentation,
- Marketing and method,
- The agent and seller themselves.
We feel, only the PPP’s of the home itself, would consistently exceed the influence of a great quote or ask in the final result.
Why don’t some agents tell price truths in their quoting?
Well, it’s not an exact science and no matter how hard we try, we simply cannot get it right all the time. TRUE. This year despite the best intentions and mostly good process I got a selling quote wrong, and it hurt my client and that was my responsibility. It wasn’t so much the quote (which was researched, but still wrong), it was that I did not frame their options and risks as well as I should have. So, some mistruths are genuine error and surprise.
However, for some it’s habitually not about genuine error or surprise; the lack of price truths is more a logic you see in a Jack Nicholson movie – you can’t handle the truth!
This means, the agent
- feels you can’t tell your client what might happen in case it doesn’t.
- feels you can’t reach for the stars because it’s safer to reach for the mud.
- wants to be loved for exceeding a bad number, rather than be poorly thought of for not quite reaching a higher number.
In a good seller and agent relationship, they would talk about all these options and scenarios and then the agent and seller(s) would make collaborative, fully informed, calculated decisions as to what to wish for and what to quote.
If you quote low and stay low and you have one buyer, you will get less than if you had of quoted fully and fairly at the start, ceteris paribus.
AND at the top level even in this market, there is very often only one bidder. Of the homes we were involved in below: one had 5 bidders and the other three had just one bidder.
Good Quoting, Step Quoting, even sometimes super strong quoting is ethical, legal and can be good for all parties – seller, agent and yes including the buyer.
How is it that our industry implies an offer, and god forbid a result, is not that great, when it is “only” within the agent’s guide range?
Sunnyside Estate Camberwell
JAMES BUY SELL off-market
This is a ripper A-Grader family home block to reno or more likely start again. North rear and sitting proud on the street, a wonderful blank canvass (no Heritage). Over the last decade or so we at James Buy Sell have bought 4 north rear blocks on Sunnyside and Currajong, the two best top of Camberwell Hill streets.
What we really like about this block is its width, its orientation and then the way it sits. Going underground is so much easier and cheaper, great light, and the front and rear has no tree issues affecting a new build (STCA). Growth has been strong on the Hill over the years and there are some great homes that started as blocks like this, so overcapitalization (within reason) seems no issue.
Our clients are selling, as after 50 years its time to move on. Off-market, quietly before Christmas is preferred. Flexible settlement and any one of Tim, Chris or Sam can get your through and answer your questions. We were only contacted and signed up over the weekend, so contracts will be requested today and hopefully ready late this or early next week. AAA grade home block.
Mal and Gina
November 6th
SOI $3.8m – contracts are now available.
We buy and sell for Doctors, Surgeons, Anaesthetists, Specialists
2 on-market and 2 off-market
The Brief: Mal and Gina we are in no rush for second best!
We buy and sell for Directors, Financial Specialists, Lawyers
JAMES BUY SELL
ADVICE THAT MATTERS
CO-AGENTS ON YOUR HOME
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