The goss …
Innocent Party (IP) meets Top Agent (TA), “I have a house to sell, it should fetch $8 million.”
“Ah!” says TA, “Let’s have an expressions of interest campaign. We can spend $80,000 on advertising!”
“But what if there’s not much interest? What if there is just one person?”
[pullquote]…top-of-the-range dummy bidding opportunity.”[/pullquote] “No worries!” says TA, “Expressions of interest are the leading-edge 2011 top-of-the-range dummy bidding opportunity. We tell buyers whatever we like and there’s nowt a chance of getting caught.”
Unknown to TA, IP was also endeavouring to buy a property through that very same agency – also through an expressions of interest campaign.
The last we heard IP was in touch with Consumer Affairs. Life is about to become a little bit more interesting for TA.
The lesson for today? The new dummy bidders are no longer just up trees and invisible in crowds, they’re also making silent phone calls and telepathic offers which only agents can decipher. IP’s experience illustrates a point we have made here before: To all but the agents running them, Expressions of Interest are impossible to understand.
Warren Buffett refuses to invest in things he does not understand. Warren Buffett is rich.
The (in)action …
Much ado about nothing at the top end. Nothing over $5 million. And the first test of the $10 million plus bracket shied at the hurdle: Fairlie Court ended up as an expression of no interest – at least no interest at a level that would interest the vendors.
The top end paddock grows smaller with each passing year. Fewer transactions and (unless someone is dancing to the tune of the Family Court) a tendency for people to stay in their homes longer.
Looking for trends is like trying to predict where the wind will blow at the top of the Rialto. In one auction there will be six bidders going to war, at the next the silence will be leaden.
Reports in the media? They depend on what they are being fed and most of the cooks are cheerleaders. Ask yourself who will most benefit from a rising market and then look at those who are being quoted. Same is true for clearance rates (Sydney story, but the principles apply to Melbourne).
What does seem clear is that Melbourne is no longer divided into the top end and below. A third layer has emerged. There’s the top end at $3-4 million plus, the mid-range at around $1.5-3 million and the “affordable” below that. Surprisingly, when fools and their money are parted, most often that now seems to happen at the affordable end.
Bayside: Damian’s report held over