With a clearance rate above 60% and a total number of sales for the past week over 1000 according to the REIV, most media outlets will be talking about the turning of the market. However one week’s results don’t set a trend. Last week with the clearance rate under 60%, some Estate Agents wanted to tell you there wasn’t enough data to set a trend and therefore the result under 60% doesn’t mean anything. And I am sure this week we will be told that there is plenty of evidence to point to the market beginning to rise again.
Of the four auctions I attended on Saturday all sold. The prices ranged from $408k to $1.8M+. Each of the properties had bidding onto the market and sold under the hammer except one. This property passed in and was sold through negotiation. The auction in Bayside started with a vendor bid and finally, after some 3 or 4 minutes in 38 degree heat the auctioneer was relieved to take a genuine bid from the crowd. There were 2 other bidders who reluctantly took the bidding to $1.26M which was $10k over the top of the advertised range. The property was announced on the market and one further bid from the original bidder secured the property under the hammer. This seemed to be a case of one very strong bidder and two who were stretched to breaking point even though we were just above the top of the range.
The market will sort itself out over time. Over the next decade property prices within about 30km’s of the CBD of Melbourne will more than double in value. Will this occur uniformly over time – NO! A very smart man once said, “It is not a matter of timing the market, it is a matter of time in the market” Nothing could be truer. This year we will see more vendors put their homes onto the market and they will be a lot more realistic with their asking prices. Most owner occupiers who have wanted to sell over the past two years but have been able to postpone, probably have. They are waiting for a better market. But time waits for nobody. At some stage people need to sell to move on with their lives. I believe this year will see a lot more turnover in the market.
I also believe most vendors who are trading homes, either upsizing or downsizing, have established that even if they do not get top dollar for their family home, the same is true for when they purchase. Exchanging homes in the same market is not as fraught with danger as most people think. Vendors selling homes need to present their home well, they need to know what their home is worth in this market (realistically worth, not wishful pricing) and they need to hire a professional, experienced agent. This will maximise their sale price.
Do not think that you will save money selling the property yourself. I had a chat with a gentleman that asked me if I were interested in his property. He was selling it himself and he asked me if I had a client interested. It was not in an area that we were searching in and I asked him why he was trying to sell it himself. He said he wanted to save money!! I offered him some free advice, which he was happy to accept. I explained that if I were interested in the property, I can assess its worth far more accurately than he can. I also have access to all the sales data in the area, I know how the market is trending and I have a very good understanding of the law surrounding the sale of property. I then explained to him that I negotiate property transactions approximately 300 times per year. I asked him how many property negotiations he had done in the past five years, to which he replied “None” I asked him who he thought would have the upper hand and he immediately agreed I would.
In short, I would probably out negotiate him every day of the week. I actually out negotiate quite a few experienced real estate agents. I explained that if he comes up against a highly experienced advocate, he will most likely lose a lot more than the $10,000 it may cost to hire a selling agent.
This is exactly the same when buying a property. Anytime a person with extremely limited experience (less than 50 negotiations per year) comes up against a highly trained, highly experienced Real Estate agent, they are most likely going to pay a lot more than if they had hired an advocate to act on their behalf.
If you are considering purchasing a property please feel free to call us for a no obligation meeting and we will explain how we can save you money.
Ian James
Director
JPP BUYER ADVOCATES
