Whilst 65% is not the best result for vendors: it is not too shabby either. 1113 sales were reported to the REIV. Anytime selling agents can get over 1000 sales reported, it is a pretty good week.
I attended one auction on Saturday where the property was worth just over $1M. We had a good idea of what the vendor was hoping for and knew we were going to be a bit short. We would have needed there to be no other interested parties and we would have needed the vendor to be desperate to sell. Unfortunately it wasn’t to be. It passed into someone else above our level. We did not even get a chance to bid as it was passed into another prospective purchaser just above our limit.
The property sold for a couple of hundred thousand dollars more after the agent had negotiated with the prospective purchaser. This is a sensational result for the vendor and selling agent. In fact I have often recommended this agent if anyone asks me who to use to sell. With a buyer advocate the prospective purchaser would have probably saved about $100,000. This estimate is conservative.
Just because an agent tells you a property is worth $1M dollars, it does not make it so. If you are in the market for a property, you will most likely have to deal directly with a selling agent. If you have not negotiated several hundred properties in the last 12 months, you will be at a distinct disadvantage. Properties selling for about $500k are varying by up to $50,000. Over $1M a poor decision may cost you $100,000 or more. In the market we are now in, where many vendors still want very high numbers, and potential purchasers have a little more stock to choose from, negotiating one on one with selling agents is becoming increasingly the norm.
I cannot recommend strongly enough to get some type of professional advice before you embark on your next property purchase. A good, reputable Buyer Advocate will charge between 1% – 2% and the savings you can make during the negotiation usually far outweigh the cost of the service.
If you are interested in purchasing a property please give us a call. Our first meeting is obligation free
Ian James
