Clearance rates near 50% and Christmas only 5 weeks away means only one thing for seasoned real estate agents. One on one negotiation will be the order of the day. Anyone purchasing a property between now and Christmas needs to be aware of this.
On Saturday we attended an auction in the Northern Suburbs. It was a very small crowd but two parties were there to do their best to secure the property. It should also be pointed out that approximately 20 changes to the contract had to be negotiated before we would even bid on the contract. Some of the changes we asked for simply made the contract useable, as it originally had severally contradictory clauses. This took approximately 12 man hours to complete last week, but it meant that we were confident that if we were the highest bidder on the day we would be signing a fair and reasonable contract. We had also negotiated settlement terms and as the plan of subdivision was still being registered, we negotiated a fair lead time for the title.
On the day we were outbid, by the other party. The property was passed in to our competitor but we awaited the outcome of the negotiations. Apparently the other party had not pre negotiated their settlement terms and even though their final offer was well above ours, we were able to purchase the property for our client and settlement was exactly when we had negotiated and all the clauses were changed as per our client’s solicitors advice.
If you are trying to negotiate a property on your own without a massive amount of property negotiation experience you will miss out on securing properties that you really should have got.
Many properties will not go the full course of an auction campaign. You need to be able to calculate what is likely to occur on auction day and then what the likelihood of being able to secure the property early will be. The trickiest part of the whole equation is this. If you go early, you are showing the agent how much you have and if you are unsuccessful in securing the property, the agent will have time to “shop” your offer around before auction. If, however you are given the option to go early and secure the property, it may mean you do not have to fight off emotional charged competitors at an auction.
Out of the 713 auctioned properties listed by the REIV, there were 323 sold. Nearly 20% were sold before and I would envisage that double that amount would have passed in and been negotiated after. This still goes down as sold at auction. In fact of the 12 auctions our team attended over the weekend, only 3 sold under the hammer, however, 9 still were listed as sold, as they were negotiated straight after the auction.
Anyone thinking of purchasing a property should retain the counsel of a qualified, experienced and licensed Real Estate Agent. A buyer’s advocate works and is paid by the purchaser. If you want to pay the right price, and save money in the negotiations, you should consider using a buyer advocate. Call us now for a free, no obligation first meeting with one of our experienced advocates
Ian James
Director
JPP Buyer Advocates