Market Comment – Monday 1st November 2010

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With the rain on Saturday not able to dampen too many spirits, the market again proved that it is somewhat reluctant to falter. Well over 850 sales were reported to the REIV last week even with only 354 auctions clearing at a reported 67%.

Whilst many of these properties passed in near the top of their quote ranges the better auctioneers were able to close the deals getting a little more for their clients. 44 Wheatley Road Bentleigh, quoted $700 – $750k passed in at $770K. The auctioneer’s strategy paid off after getting another $10K and selling the property for $780k. This is not UNDERQUOTING, this is good selling agent negotiation. If you were the vendor and the agent was able to get another $10,000 for you, wouldn’t you be happy! The would-be purchasers outside seeing the property passed in above the quote range think this is underquoting. It is not! The vendor has spent his money well on hiring a professional agent who knows what he is doing.

Minister for Consumer Affairs, Tony Robinson MP, has had some very bad advice. He continually tells Victorians that he is “creating more confidence in the industry”, by trying to “hamstring” selling agents who are contractually obligated to assist the vendor. Is this minister going to ask purchasers to do their own building inspections or pest inspections in order to save money? Is he going to tell defendants in court that they should represent themselves and he will see if he can get the plaintiff’s solicitor to help them out? When you are negotiating $500,000 contracts, both sides need representation. A vendor uses a solicitor for the legal paperwork and an agent to negotiate, why isn’t the purchaser?

Mr Robinson cannot seriously think that a vendor who is paying an agent to get the best possible price is going to assist the purchaser in any way shape or form.

After speaking with many agents last week, we know that stock levels are not looking to increase significantly over the next six weeks. This does not bode well for would-be purchasers wanting to be in their new homes in January.

There are still many purchasers out in the market place and if the stock levels remain relatively low, prices are going to rise. Whilst a clearance rate in the high sixties gives the impression of a relatively balanced market between buyer and seller, it is the numbers of auctions coming up in the next six weeks that will determine whether prices continue to rise.

If you are in the market to purchase a home I would strongly suggest that you call us to have a chat. There will be more private sales and pass in’s at auctions coming up. You will be negotiating one on one with some very experienced agents. A good negotiator will make tens of thousands of dollars difference.

Ian James

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About the author

Ian has been operating his own businesses for more than 25 years. During this time the self taught lessons of building the business, dealing with staff, suppliers, clients and economic woes have been invaluable. Ian is a fully licensed Real estate Agent, a member of the REIV and registered with the Business Licensing Authority.

Buying property is not just sticking up your hand and outbidding your rival. It is an emotional, fiscal and psychological decision that needs to be planned and well executed. Ian is usually involved in over three hundred property negotiations per year; ranging from the $250,000 first unit purchase for a young couple to multiple million dollar residential developments. Ian's business background and endless numbers of negotiations make him one of the industry's leading negotiators.

Ian is married with two adult children, living in Patterson Lakes. He is a keen fisherman when weather and business allows the time.