Two weeks ago we were asked to give a comment for the Neil Mitchell radio show. We were then asked about three properties. One sold prior to auction and with an undisclosed price. The other two sold on the weekend.
Manningtree Road: Sold $1.92
We estimated between $1.9M – $2M and would have refined this after property inspection
2/156 Dean Street Moonee Ponds: Passed in VB $580K reserve $600k
We assumed this was worth mid $500’s maybe a little higher, but as the location was poor we assumed a good chance of a pass in.
Without even visiting the properties it is not difficult to know what is likely to occur.
The issues here are did the agents do the wrong thing. The answer is simple: They had no choice but to do exactly what they did.
Had Jellis Craig marketed Manningtree Road at $1.9M – $2.0M they would not have got anywhere near as many people to the auction. The bidding would not have been as strong. If the bidding had stopped the vendor would have sold at $1.48M (On the market).
How else could the agents have quoted this property? Should they have been telling people that $1.48M will buy it but we expect it to go to $1.9M?????????????.
If buyers genuinely want to be at the right auction at the right time then they should be hiring a buyers advocate. We would have told our clients, Dean Street is a very ordinary property due to its location and that its right price would be around mid to high $500’s. We would have counseled to wait for the auction and hope it passes in.
Manningtree Road – We would have counseled any client to offer strongly – somewhere in high $1.8’s on the Wednesday or Thursday last week. This may or may not have been accepted, but at least we would have forced Jellis Craig to adjust their quote to above our offer and hopefully, for our buyers’ sake, scared off some of the competition. Remember it is our job to work for the buyer!!
At the moment the media and the government, as well as a few agents are saying they wish to control how an agent deals with purchasers. There are already guidelines in place for this.
Would you suggest to someone to go to court without a solicitor on their side so they can save some money?????????????? Especially when they are going to be going up against a “Queens Counsel”
You will never be able to legislate that the vendor’s agent is to assist the purchaser in any way shape or form. They have a contractual duty to their vendor and the vendor is shelling out a considerable amount of money for the agents’ expertise. It’s not feasible and it’s not fair to the vendor.
This is an issue I believe very strongly about. In my opinion, selling agents are hired by vendors to assist them to get the best possible outcome for their property sale. A purchaser, who is going to make the biggest financial decision of their life, who doesn’t get independent professional advice, has absolutely no reason to blame anyone but themselves if they continually miss out on the good properties.
To get a loan, most people will ask a mortgage broker, their accountant, their financial planner or at least go to a bank branch and ask for some help. When a property is purchased most people will seek assistance from a solicitor for their conveyance. If the building they are buying is old many will spend money on a building inspection, but the quintessential piece of information and the most difficult questions of all: “What is this property worth and how will I secure it against all the competition” is left to asking the counsel for the seller to answer.
How can our government continue to stick its head in the sand? The REIV is a peak industry body that exists to help the well being of selling agents. The media seems to think if under-quoting becomes a legislative issue then it will be fixed.
If you wish to purchase good property, and pay a good price in a reasonable time frame then hire a professional buyer’s agent (Buyers Advocate). They will make sure you know where all the available properties in your search area are, they will be able to appraise a property with a great degree of accuracy and also be able to professionally negotiate on your behalf. Be careful that your advocate is a licensed professional, who specializes in purchasing property and doesn’t work for any vendors and that they give you a professional report showing comparable sales and their reasons for recommending a price on a given property.
Come in and have a chat or give us a call. If you are thinking of buying property it will do no harm to talk to a professional buyer of property
Ian James
