What’s on everyone’s mind?
There’s a significantly better-than-even chance it’s not real estate. Certainly not at the top end. There’s just not enough good stuff around to exercise anyone’s imagination.
[pullquote]…you may as well go back to sleep until the bunny has been and gone.”[/pullquote]OK, there are exceptions such as that below, but unless there’s an (unlikely) influx of seriously good properties before Easter, you may as well go back to sleep until the bunny has been and gone.
The rare property that is in a good position and which ticks all the boxes. One of those, 19 Huntingfield Road, Toorak, is on one of our favourite streets, north side with significant Wow! and it raised hands all the way to a not unexpected $7,060,000. What was unexpected, though, was the size of the not-crowd. There have been cases, we imagine, or more people attending the auctions of bedsits in South Yarra.
But you can’t say the selling agents weren’t trying. Trying everything. Desperate to boost what they presumably foresaw as meagre numbers. The morning of the auction we, and we assume others, received a text message imploring us to attend. Novel. Bid $7 million+ on the basis of a text? (OK, we were bidding – but it was following a couple of weeks’ due diligence.)
That was the exception. Here follow examples of the rule:
- 44 Heyington Place, Toorak has had enough advertising money spent on it to relaunch Myer. In the last eight weeks it’s had a failed Expressions of Interest campaign and on Saturday it had a failed auction. What were they thinking? The EOI failed so a wad of money spent on an auction would fix it? Or is the client someone who just loves to see his property in ads?
- 23 Lisson Grove, Hawthorn. A boardroom auction late last year saw over $4 million on the table. Not enough. House is spruced and advertised, maybe $100,000 spent, and sells for a little north of $3.6 million. That was clever.
- 19 Kingston Street, Malvern East. An agent’s quote heading toward $4.8 million. Passed in – apparently without a bid. Sold later for $4.6 million. OK, but not out of this world.
And when it all falls in a heap?
… when a vendor is one of the 9 out of 10 who doesn’t reach a promised price at or post-auction? For the deal to go through, agents are being asked to make up the difference out of their own commissions. One enterprising vendor got it right last week by renegotiating the selling fee from 2% to just 0.05% – with further savings on GST. If this keeps up, expect to see agents driving Holdens. Or making realistic promises. Or working harder.
Some gratuitous advice for vendors
A re-cap: Agents can no longer profit by taking commissions on advertising and most properties are now found by word-of-mouth, hoardings or on the web, so why do agents continue pushing their clients into print advertising?
Short answer: Self-promotion. It’s still their logo at the bottom of the ad you’re paying for. Different answer: Some agents own publications vendors’ ads appear in.
We hear about excessive ad bills, lack of bidders and in some cases lack of professionalism and/or fiduciary duty.
We don’t act for vendors, but we do get asked for advice. Short answer: Choose your agent wisely and monitor the process carefully. Do not become another statistic in the Saturday arvo sausage factory.
If in doubt, phone us and we’ll tell you who is hot and who is not.
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