Better than Netflix
This week our clients bought another home between $5m and $10m in a s…..fight for a minuscule amount more than the next buyer. It was one of two homes at this price level our clients fought for this week.
During the process, we were deceived, played, the works. We misread, misunderstood, and misplayed our hand.
The other side seemingly had a key in their pocket, and they did, and he or they thought they were playing the other party (us) well and they were – it was to make us doubt and we did.
It’s a common game – we don’t mind doubt when we are working for the buyer, as doubt almost always leads to lower prices. However, we don’t like to see doubt when we are working for the seller.
So, through all this week’s negotiating doubt – the signs/ deal milestones kept not adding up. We couldn’t figure the math, the opponent’s strategy was layered and well disguised.
We kept being encouraged to do something that didn’t sit well with us and so we didn’t. The breadcrumbs that were laid out for us were sparse and camouflaged, so as we continually read the direction another more common way. Its efficacy was smart, its integrity dubious.
But the agent, who was not the strategist, was honest – he was a saving grace of the other sides (seller and highest other bidder) in all this. It was his honesty, though all the twists and turns that allowed us to stay in the game – despite our logical but miss steps – that allowed his seller to ultimately receive more – that allowed us to buy it.
That was our first key to unlocking the door to this home.
Another key at one minute to midnight in the deal; was the ability to pivot whilst sucking up hurt, shock and mistrust AND making mental room to rethink a new plan.
When the proverbial hits the fan as it did here, as it often does when the prize is high – we find it’s process that best protects your result.
Our process is 1) DON’T PANIC and DON’T GIVE UP and then 2) an internal negotiation council is convened and then 3) all and sundry solution ideas are throw in and out and the best is selected through peer review.
This is not unique to us. Airlines, Top End businesses and some Melbourne Agencies have formal and informal crisis councils – most don’t, and certainly single buyers don’t.
Seen the show Air Crash Investigations?
As our negotiation was going down in flames, we needed to find the problem, find a solution AND at the same time we also needed to keep flying the plane (the deal), whilst keeping the passengers calm.
During any emergency peer review, there is no automatic captain is always right – anybody in our company in the right manner, can suggest and critique next steps – as can our clients (some of our best ideas are from clients) – and the best is selected.
From this negotiation council process, held at a house, with the clients present, it was Gina who came up with the gem of an idea.
We all looked at each other and said genius. We implemented immediately, not a moment to lose, we were at very low altitude and we had limited time to turn this around.
It did turn the tables – it threw a curveball to the other side and gave us and our clients some breathing space, allowed the team to return to equilibrium – all this as the other side went from certainty and a clear path to internal doubt and mistrust.
Ultimately it was they who stopped, got angry and stormed away.
They may well regret a less than transparent process, their supporter continually stimulated.
This home is a hard to repeat, brilliant jewel that has been on and off the market for a decade.
Our clients did what was needed to be done, in part because of a long and strong trusting relationship with them. In part we admitted we were being played as soon as we discovered it. In part because we asked them to see the reality of the situation (we were now in a proven market and the main game was to buy the dream). In part because they could get past the many noises that were no doubt in their heads.
Our clients sucked it up, got back on their PPPs and CCCs horse and trusted that we knew what to do from that point.
That took enormous client strength of character to listen, to hear, to comprehend and to recalibrate after such a letdown and still under enormous emotional pressure.
It was a lot more for them than for us, to truly pivot.
Our clients were already all in and then they weren’t, and within an incredibly short time frame they had to be all in again, after a sea of stormy deception.
There was now in the distance, a life raft – but it was bobbing around and a long way off.
Sometimes after so much hurt we all want to hold onto a sinking ship rather than re-risk all, dive in and swim to that faint beacon of hope. We all find it hard because of doubt.
We just want it all to be over and for the pain to subside, rather than continue the stress needed to ultimately win the prize.
Our clients were able to pivot in the harshest of weather, in the thickest of fogs; all whilst on the edge of the precipice. They continued to trust, and the deal was done.
Our clients have woken up happy this morning (see below).
- Great prizes seldom follow a straightforward journey.
- Great prizes are still often won by process and people ahead of money. Everest is seldom climbed by simply taking a run at it. When you are at $5m, $8m or $10m and one bid is $500 above the other, then it’s not about he or she who had the most money, who won. It’s about a process, style…… je ne sais quoi.
- The client was clear on their PPP’s – the client engaged MMM’s and was CCC’d as we went into the process. Money did not win this – trust in process and people combined with client gumption and some Gina genius
Finally, we mentioned the agent – this was a stressful deal – for when you are being played it is somewhat uncomfortable – but it was not the representative agent playing us.
Yes, the representative agent was confusing through mixed messages to us at times (but perhaps he was forced to be), nonetheless he still worked hard and was at all times acting for the seller.
Nearing the point of no return the agent was truthful and helpful – the final act was open and transparent for around 10 minutes on a wildly swinging bridge – whilst the water that had gone under in the weeks before, had become so muddied it was now flowing like treacle – in some ways lucky for us it was more than treacle, more like setting concrete, for the other side.
This is not a fiction; this is 100% true and it was this week. It’s fresh. Only the identities have been shadowed to protect the combatants. This situation is common, far more than you may know or think. Like the last time, a month or so ago….
….again, the waters were muddy, the quicksand unending, the swamp wide and long. Yes, it could be argued we had our opportunities on this previous one, and we did. We lost that one as a buyer – but so did the seller. The difference this week to then; was after the swamp, on the bridge, before the decision, there was a truth, one truth, the same brief truth and opportunity given to all – all who dared to try to win the prize.
Hi Mal & Gina
I hope you are having a relaxing day & have recovered from last night…still don’t fully understand what took place 🤪
I just wanted to say thank you for your hard work & great strategy. I felt like we (mostly me!) pushed you in a direction you didn’t really want to take but were supportive anyway.
An element of luck maybe but a good result non theless.
Thank you & thanks for the beautiful flowers & card… hoping our relationship continues past 2021, …………… x
Business Unusual which is Business as Usual
Overall, the market has adapted well to last minute change – well done to all agents, buyers and sellers!
Zoom, Reschedule, Bought Before – it was business unusual, but actually business as usual. If there is one thing buying and selling agents can manage – it’s last-minute change.
Below are the results for this weekend – The Age stats are a lot more bullish – we do not agree with the efficacy of their calculations – nonetheless we agree with the sentiment of their headlines and stories. And we in glass houses shouldn’t throw stones, as we have re-interpreted the stats based on all 3 weeks of May testing and our gut feel on what is really happening. The Market is Strong right now.
Melbourne buyers and sellers LOCKDOWN 4 – NO WORRIES.
Reading on phone - turn to landscape to see full table
|Suburb||Address||Indicative Sale Price||Result|
|ALBERT PARK||5 Mills Street||$2,400,000 – $2,640,000||Rescheduled to next week|
|ARMADALE||50 Northcote Road||$3,000,000 – $3,300,000||Rescheduled to next week|
|BRIGHTON||32 Park Street||$4,100,000 – $4,300,000||Moved to Private Sale|
|BRIGHTON||17 Durrant Street||$2,000,000 – $2,200,000||Sold – Bought Before|
|BRIGHTON EAST||6 Canberra Grove||$2,200,000 – $2,300,000||Rescheduled to next week|
|BRIGHTON EAST||9 Stone Street||$2,565,000||Sold Zoom|
|CAMBERWELL||8 Glencairn Avenue||$2,650,000 – $2,915,000||Moved to Private Sale|
|CAMBERWELL||9 Currajong Avenue||$3,800,000 – $4,000,000||Moved to Private Sale|
|CAMBERWELL||11 Loch Street||$3,500,000 – $3,850,000||Sold Zoom|
|CAMBERWELL||11 Kingsley Street||$3,500,000||Sold – Bought Before|
|CAMBERWELL||8 Moorhouse Street||$2,750,000 – $2,950,000||Sold Zoom|
|DEEPDENE||44 Campbell Road||$2,900,000 – $3,190,000||Rescheduled to next week|
|HAMPTON||15 Grout Street||$3,300,000 – $3,500,000||Sold – Bought Before|
|HAWTHORN||1 Gardiner Road||$4,100,000 – $4,500,000||Rescheduled to next week|
|HAWTHORN||55 Linda Crescent||$4,950,000 – $5,400,000||Moved to Private Sale|
|HAWTHORN||105 Kooyongkoot Road||$3,000,000 – $3,300,000||Moved to Private Sale|
|HAWTHORN EAST||52 St Helens Road||$3,000,000 – $3,200,000||Rescheduled to next week|
|HAWTHORN EAST||1A Wiseman Street||$3,600,000 – $3,900,000||Moved to Private Sale|
|KEW||16 Gordon Avenue||$2,650,000 – $2,915,000||Rescheduled to June 12|
|KEW||22 Rockingham Street||$3,200,000 – $3,500,000||Went to auction – result unknown|
|MALVERN||11 Thanet Street||$2,000,000 – $2,200,000||Sold Zoom|
|MALVERN||5 Parkside Street||$2,500,000 – $2,750,000||Sold Zoom|
|MALVERN||20 Euston Street||$3,200,000 – $3,500,000||Sold – Bought Before|
|MALVERN||32 Euston Street||$3,000,000 – $3,200,000||Sold – Under Offer|
|MALVERN EAST||15 Glenbrook Avenue||$6,000,000||Sold Zoom|
|MALVERN EAST||40 Belson Street||$3,330,000 – $3,600,000||Moved to Private Sale|
|MALVERN EAST||67 Kerferd Street||$4,500,000 – $4,950,000||Sold Zoom|
|MIDDLE PARK||93 Harold Street||$3,600,000 – $3,700,000||Sold – Bought Before|
|SANDRINGHAM||108 Bay Road||$2,650,000 – $2,800,000||Sold – Bought Before|
|SOUTH MELBOURNE||72-74 Cobden Street||$2,600,000 – $2,800,000||Moved to Private Sale|
|ST KILDA||51 Argyle Street||$2,500,000 – $2,700,000||Moved to Private Sale|
|SURREY HILLS||83 Middlesex Road||$2,200,000 – $2,400,000||Sold – Bought Before|
|TOORAK||3 Springfield Avenue||$3,000,000 – $3,300,000||Sold Zoom|
Today’s 33 auctions selected at the start of the week to conclude May 100 Auction Test.
- Sold Before + Zoom: 16/33
- Rescheduled (mainly next week): 7/33
- Moved to Private Sale: 9/33
- Result unknown: 1/33
Above is our graphic opinion of the where the May 100 Auction Test stats would have landed if we were able to measure all 3 weeks as we normally do.
We measured 2 weeks and estimated the 3rdweek. We have been active in the market this week and seen no drop off in positive market sentiment.
- Demand Strong – Bidderman High 1’s
- New Supply Low – Winter approaching
- Prices – still rising, just not as quickly as March. Clearance rate 75%
- We do feel the Ultra Top End (over say $8m) is where cooling has occurred.
- We do feel the apartment market is a lot weaker than the house market.
- In 2021 we do feel shiny new lifestyle homes command far greater prices proportionally than homes in need of a reno. Heritage is still a partial $ handicap when unrenovated or land only.
- There is a real away from Melbourne lifestyle market of some strength.
- For every person arguing the market will ease going forward, we see one stating it will rise when the international borders open up.
Your property price is 3 competing market forces (not one overall)
- Melbourne Market forces
- Segment Market forces – PPPs you selected when you bought
- Individual market forces – agent selection, presentation, individual buyers…..
Our best advice for this week is
- Listen to your buyer or seller agent.
- Don’t change your plan until you have to. 1 week Lockdown should have minimal effect and for every negative you may see, somebody else may see a positive.
- Stay crystal clear on what it is you want, your big picture. 1 week Lockdown from a property aspect is mostly noise.
PPPs Do Matter – This week Annie went mortgage free!
We love Annie, occasionally big on the emotion, but such a caring person and she has achieved so much in the 15 years we have worked together.
A great listener, follower and actioner of sound proven advice.
Annie’s story could/should be yours.
Annie’s story is the same for you today as it was for her in 2005, as it was for me in the ‘80s.
She is smart. She at all times:
- Bought Well (CCC’s) and dealt with good MMMs
- Bought only good PPP’s,
- Bought what you really, really want (Good O’s) by asking yourself the 3Q’s
This is how she did it, this is real life – the numbers are true. Because of her job Annie is happy for the story to be published but asked not to be identified.
- Annie sold in Craigieburn and bought in Airport West with partner
- Annie was referred to James Buy Sell after some poor property investments and we said yes you can start again; you can buy well and let’s see if we can buy in Albert Park.
- Bought in Albert Park for $650,000 before auction.
- P – Improving suburb, own land
- P – Period home, gave it a cosmetic update.
- P – circa Median Price
- Things changed and Annie and her partner went different ways
- Sold in Albert Park for $1,250,000 in a volcano auction
- Annie had $450,000 equity.
- Bought in South Melbourne for $800,000
- P – Fringe of city, car park, own land
- P – Period home, maybe width issue, gave cosmetic update
- P – circa Median Price
- Annie wanted a change and so we sold South Melbourne $1,450,000
- Annie’s equity was $900,000
- Bought in Bayside for $1,350,000
- P – Near beach, train, great street, own land
- P – Period home, needed cosmetic update
- P – circa Median Price
2021 this week
- Annie wanted to ease up on her life and have no mortgage and she did not want to renovate.
- This week Jenny Dwyer sold in a volcano zoom auction pre Saturday’s auction circa $2,000,000.
- Annie’s equity is such that her next home will have no mortgage and her choices are anywhere in Bayside.
Annie’s PPP’s were easy and simple, but many investors and home buyers seem to find them hard.
- Position: near rail, good land component eg 70% or above.
- Property: Light, no major change to floorplan, flow and space. Period works best
- Price: Near median for area type.
The Middle Way
- When buying, selling, dealing and deciding for consistently the best results, we follow the Middle Way – the way of the centre. To reach for the top we like to go via the middle.
MMM’s on Annie’s current property:
- Buying Manager: When Gina bought it there was a cast of thousands ready to bid – we had a limited 1.35m budget against a quote of $1.05m to $1.15m. Gina opened with a knockout bid of $1.3m – the crowd hushed, another bidder final limped in with 10, Bang from Gina to 1.35m – all we had. Bought. Wow.
- Selling Manager: When Jenny Dwyer deals in a home like this, there are few better. We find Jenny hard to buy off and easy to sell through. She is a total professional and this result, under the Covid lockdown pump, proves again why we recommend and work with Jenny on certain homes.
Annie is living proof the right advice can really help you, if you follow it (in the Middle Way) then anybody can be a millionaire, debt-free and home happy.
Well done, Annie!
Three of the best property books I’ve read in the last 30 years
- HOW TO START SAVING FOR FIRST HOME
Scott Pape is the new Paul Clitheroe (for us oldies) and Scott’s stuff really works, but again only if you follow it. My children have all read him, I paid them $100 each to do that and from that they all now have their own financial planner – again I’m paying the first three years of fees. Sign up for Scott’s newsletter – it’s almost as good as ours!!!
- WHAT TO BUY (FIRST HOME)
Jan Somers – Building Wealth Through Investment Property – started it all for me and she really started it for a lot of Australian Investors. I read her books in the 1990’s and made a lot of good decisions from this one book. It’s simple and easy. It also helped start our PPP concepts around James Home Ratings which we all still use today for clients. Find it on Ebay or contact Somersoft – the lady is good.
- ANOTHER WAY TO ENJOY LIFE – BE DEBT FREE QUICKLY
The Millionaire Next Door by Thomas J. Stanley & William D. Danko – Make sure it’s the original and the first 170 pages are the best. Frugal, frugal, frugal – it’s not about being a tightarse, it’s about choice. It’s understanding the value of money, how you can live a better life and actually how a lot actually do, such as Annie.