How to handle auctions.

With such high clearance rates at the moment (reported to have been over 70% for three months running), more vendors will be choosing to auction their homes rather than offer them for sale at a price. And competition can be fierce when there is little quality stock out there as well as first home buyers in a rush to buy before the end of September.

We speak to so many buyers about auctions – most hate them – and there are a myriad of opinions on how to best handle them. When bidding for our clients we take into account many variables including who the auctioneer is, who the selling agent is and how clever they are at auction negotiations, how busy the inspections were and what the vibe was, information gleaned from the selling agent about vendor motivations, likely competition levels and, of course, what the property is worth. Here are just a few of our ideas – remember that every auction is different and one technique will not be useful in all scenarios.

Have a clear idea what your budget is and what the property is worth to you. This is the golden rule. Do not deviate from this and you should not get drawn into a bidding war that will result in you overpaying.

Try being the first bidder. This goes against conventional wisdom, which is not to bid until the property is called “on the market”. You have a better chance of controlling the auction if you start it with a strategic bid. But that is the key – this opportunity must not be wasted.

Don’t wait until the property is called “’on the market” to bid. How is it ever going to reach reserve unless people bid?? Seriously, we have seen plenty of properties sell under the reserve at auction after a bit of frantic negotiation between agent and vendor. And not all auctioneers will call the property “’on the market”, so you need to be careful here.

Stare down your opposition. A confident stance can do wonders in out-psyching other bidders and making them think you have bottomless pockets. We see many would-be buyers stop bidding prematurely because they believe the other bidders will stop at nothing.

The highest bidders right to exclusive post-auction negotiation is only a courtesy. The agents and vendors are able to negotiate with any interested party once the property has passed in. They will usually offer the highest bidder the first right of refusal, however there may be other parties suddenly making offers. By leaving the negotiations until after the property has passed in often vendors harden their stance and a good buying opportunity could have passed you by.

For more information check out our website: www.gooddeeds.com.au

Can a buyers’ agent save you money?

We are often asked this question. The best answer, we believe, is an actual example. Here are some of the ways in which our clients have benefited (or could have saved) from engaging our services:

Apartment 1 – the agent gave us information about the vendor’s circumstances and had we acted on it we could have got the property for $500K. It subsequently sold a week later for $515K. $15,000 potential saving.

Apartment 2 – we were advised by the agent prior to auction that reserve was going to be $510K, and that we possibly could pick it up for $505K. Passed in and sold 3 days later for $521K. Minimum $11,000 potential saving.

House 1 – passed in at auction in December for $1.355M. The agent had been quoting @$1.3M and we felt that it would probably achieve that. The under-bidder was at $1.35M, so this had been a competitive auction and the vendors regretted not accepting the highest bid. In the three months after the auction, Xmas had come and gone, the market had destabilized at this price level, and the property was tainted from having been on the market so long. Through protracted negotiations with the agent we held firm and secured the property at $1.255M. A saving of $100,000.

House 2 – our client came to us after her offer of $727K on a property that was being quoted as “early $700,000s” was rejected. She did not know whether to believe what the agent was saying and was prepared to pay $780K for the property prior to auction. This property uniquely suited her needs and she was prepared to pay a premium for it. After many discussions with the selling agent and assessing the competitive situation, our advice was to wait till auction. Our client was so keen on this house she instructed us to bid up to $827K!! We secured it for $745K, a saving of $35,000 over what she would have paid if left to her own devices and $82,000 less than what she was prepared to pay.

House 3 – similar circumstances to the property above. Our clients were about to make an pre-auction offer and were considering the figure of $807K. Once they engaged our services, we advised them to wait for the auction. Their instructions were to go to $813K if necessary. We secured it for $780K, a saving of $27,000 over what they would have paid without our advice and $33,000 less than they were prepared to pay.

Apartment 3 – Our clients had found a property that they were desperate to buy, and it was in a price bracket that was definitely a buyers’ market. However they agent had suddenly procured another buyer and this was putting pressure on them to pay more than they needed to. Our advice on offer strategy was carefully planned and we secured the property for $2,500,000, which was $50,000 less than the premium they had been prepared to pay. Our clients admitted that without our guidance, they would have succumbed to pressure and fear of losing the property and increased their offer, possibly even over the amount that they had felt comfortable paying.

For more examples, contact us via http://www.gooddeeds.com.au/

Which Sydney suburbs are the best places to live?

Recently there was an article in Domain titled “Why we live where we live”. The article didn’t specify which suburbs are “best” but the first person to post a comment named Mosman, in Sydney’s Lower North Shore, as their number one suburb. This prompted an avalanche of comments in which Mosman was given a caning!

The following list is by no means the result of a reliable survey but, for what it’s worth, these suburbs were also mentioned as great places to live by other respondents to the article:

Eastern Suburbs – Kings Cross, Darling Point, Elizabeth Bay, Botany, Alexandria, Bronte, Vaucluse (2 mentions!!), Watsons Bay and the postcode 2030, which covers Vaucluse, Watsons Bay, Rose Bay North and Dover Heights

Northern Beaches – Dee Why, Harbord, Narrabeen, Manly

Inner West – Annandale, Summer Hill, Balmain

North Shore – Roseville, Balmoral, Chatswood

St George – Beverley Park (2 mentions!!), Oatley

Northern Districts - Carlingford

Looks like the Eastern Suburbs tops this survey. The one thing everybody seemed to agree on is that the best place to live really depends on what life stage you are in. Common sense really…

Click on this link to read the article and the comments it provoked for yourself: http://blogs.domain.com.au/2009/07/why_we_live_where_we_live_pick.html

For more information on Good Deeds Property Buyers: http://www.gooddeeds.com.au/

Does the Office of Fair Trading protect real estate consumers?

I have long been of the opinion that the Office of Fair Trading (NSW) is a toothless tiger. Many professional and ethical real estate agents spend a great deal of time and money ensuring their compliance with the various Acts under which they operate, while some pretty shoddy ones keep flying underneath the radar.

It is my belief that consumers have some degree of protection from under-quoting of auction price expectations and also dummy bidding but in my opinion this is due to the attention given the topic by the media combined with the fact that large auction-oriented franchises and agents do not want to be made examples of.

I believe that the vast majority of real estate agents wish to do a good job and operate ethically. However, there remain others who do not do their profession proud. If they are doing anything wrong that does not come under the auction umbrella, it seems unlikely to me that they will taken to task by the Office of Fair Trading. Maybe they just don’t have the resources…

The best chance a consumer has is to level the playing field and engage their own professional to act on their behalf – a buyers’ agent of course!!

For more information on how a buyers' agent can help you: www.gooddeeds.com.au