With a clearance rate of 77% on only 390 auctions and private sale negotiations sky rocketing to 735 last week, a number only topped once last year (751 in first week of march), we can see the market is moving in a very positive direction. With the exception of the Labour Day weekend over 1000 properties per week were sold throughout March. And they are not solely in the first home buyers’ realm. There has been a 10% increase in total sales this week compared to the corresponding week last year.
When there are plenty of people interested in a particular property then going to auction can be sensational. A property on Saturday in Heidelberg, unrenovated 3 bedroom 1 bathroom home on normal land size, quoted over $500k, went under the hammer. In front of a couple of hundred people, there were at least ten people bidding. The auctioneer announced the property “on the market” at $560k. The property sold under immense competition for $702,000 to the delight of both vendor and auctioneer.
If you want to visit an open for inspection at the moment, be ready for the queues. A three Bedroom townhouse in Doncaster quoting $400k+ and you had better not be in a hurry.
At auction with enough competition the desired price is usually met or exceeded. But more and more agents are retreating to traditional “sale by negotiation” methods. Don’t be fooled by advertising lines like “Sale by set date” or “Sale by Tender” or “Sale by sealed offer”. Almost always there will be a small disclaimer saying “Unless sold prior”. This is the case with an auction as well.
It is now almost universally agreed that prices on properties below around $1.5M have stabilised or are likely to increase in price. If you wish to purchase an investment property, your first home or trade up into a more expensive home after getting a sensational price selling your own existing home, then you had better be prepared for some serious “one on one” negotiations with some very experienced negotiators.
In any negotiations, whether it is buying a house, negotiating a divorce settlement or trying to free hostages, one of the key steps is to place a professional negotiator between the two decision makers. Every good real estate agent does this. When was the last time you negotiated in front of the vendor? This is one very simple but incredibly valuable lesson to be learnt when negotiating for hundreds of thousands of your dollars. Representing yourself in your own negotiation is as intelligent as representing yourself in court.
If you want to know more about negotiation or would like to purchase a property in Melbourne well please give me a call or write a comment.
Ian James
