If you had not noticed the wind, cold, sleet and I am sure in some places snow during the auctions on Saturday then you were obviously inside near a fire enjoying not looking at real estate. This is normal for winter. Many vendors do not put their properties on the market at this time because they believe there are less people out there looking for a property and also that their properties may not look quite as good as they do in spring. But the clearance rate for auctions this weekend remains, according to the REIV, at this year’s average of 70%
Big family homes in the suburbs may well be a little quiet but for inner city apartments, there is nothing further from the truth. Vendors who put their properties on the market may have less people walking through the opens, but nearly everyone who is there is seriously interested in buying property. A used car salesman once told me that the best time to sell a car is when it is raining. He told me that if someone is out in the rain to look at a car then they have to be serious!! The same goes with property.
From a buyers perspective this can also assist us. Whilst there are fewer properties on the market, there are also less people out there looking to buy. Agents cannot rely on the “auction hype” anywhere near as much as they can in spring. There will be fewer people attending each auction, and they may have similar amount bidding “the buzz” may be lower. Good agents will not take the risk of going to auction just to see what will happen. If they have good interest, they will tend to do a deal prior to auction.
Buyers need to understand that they also have an advantage during winter. Whilst there are fewer properties to choose and there are less people vying for the property, if they find a good property that suits their needs, then good negotiation skills are essential. The REIV CEO, Enzo Raimondo, has said that 80% of properties sold use the private sale method. And we know that whilst there is a 70% clearance rate for auctions this year (the balance of the 20% of total sales), and that accounts for all properties sold before (private negotiation), all properties sold after (private negotiation) as well as those that actually sell under the hammer (anecdotally this is well below 50% of what’s left), you need to understand the necessity for negotiation skills.
If you are purchasing property and not using someone to do the negotiations for you then you will most likely be in worse position than the vendor who is using an agent. If the property is being sold by the vendor themselves without an agent, then you would at least be on a level playing field. Wouldn’t it be better to be ahead of the opposition?
If you are an experienced negotiator, who is knowledgeable in property matters, then I don’t need to tell you to get representation! If you are a good negotiator you will already know that you never allow the salesman direct access to the decision maker. I have represented solicitors and real estate agents, politicians and doctors, award winning salesman and your average mum and dad who purchase 1 or 2 properties in their entire lives.
It doesn’t matter who you are, or what background you have, anyone purchasing a property without getting professional advice, especially in the negotiations, will not do as well as someone that gets assistance. Even the Real Estate Institute of Victoria encourages all purchasers to engage the services of a licensed REIV Buyers Agent in order to receive professional advice whenever they purchase property.
If you are considering a purchase, whether it is to live in, or an investment, please feel free to give our office a call or drop us a note via email and we will be happy to have a chat.
Ian James
Director
JPP Buyer Advocates