Here is a little known fact about auction price quoting. Apart from rare situations where the vendor has instructed the selling agent not to entertain pre-auction offers, there is a very compelling reason for agents to discourage offers. If an offer is rejected, they have to increase their quoted price expectation!! And they do not want to do this for fear of not being able to build interest and create a competitive auction.
To give you an example, an agent is quoting a property at “over $900,000”. You make an offer of $950,000, which the vendor rejects. The agent now needs to increase their quoting to reflect the fact that the vendor will not accept anything up to and including $950,000. Perhaps that will turn other buyers off, so don’t be deterred if you want to make an offer prior to auction.
For more information on property buying in Sydney go to www.gooddeeds.com.au
Thursday, September 24, 2009
Thursday, September 17, 2009
How to pick the best apartment in a large complex.
Obviously, you can go straight to the top and buy the penthouse, but what if your budget is not so lofty?
We advise our clients to be very wary of large complexes. There is often more than one apartment for sale at any one time, which may offer you choice when you are buying, but can be a problem when you go to sell.
So, if the location, facilities and overall style of the complex appeals to you, how can you ensure you buy the best apartment? Here is a checklist:
· Natural light – the higher up in the building you are, generally the better natural light, however the aspect is crucial so look for a north, north-east or north-west aspect from the living areas.
· Privacy and outlook – preference should be given to apartments that look outside the complex (depending on the outlook of course – or unless there are fabulous landscaped gardens) rather than into other apartments.
· Proportion of rooms – sometimes the bedrooms are larger than the living area, or the ensuite bathroom is larger than the main bathroom, or there is wasted space in foyers and hallways. All these scenarios should be avoided.
· Outdoor space – this should be usable (is there space for a table, chairs, bbq?) and accessible from the living area.
· Noise – avoid apartments next to the entrance, opposite the lift, overlooking a noisy road, etc.
For more information on buying property go to www.gooddeeds.com.au
We advise our clients to be very wary of large complexes. There is often more than one apartment for sale at any one time, which may offer you choice when you are buying, but can be a problem when you go to sell.
So, if the location, facilities and overall style of the complex appeals to you, how can you ensure you buy the best apartment? Here is a checklist:
· Natural light – the higher up in the building you are, generally the better natural light, however the aspect is crucial so look for a north, north-east or north-west aspect from the living areas.
· Privacy and outlook – preference should be given to apartments that look outside the complex (depending on the outlook of course – or unless there are fabulous landscaped gardens) rather than into other apartments.
· Proportion of rooms – sometimes the bedrooms are larger than the living area, or the ensuite bathroom is larger than the main bathroom, or there is wasted space in foyers and hallways. All these scenarios should be avoided.
· Outdoor space – this should be usable (is there space for a table, chairs, bbq?) and accessible from the living area.
· Noise – avoid apartments next to the entrance, opposite the lift, overlooking a noisy road, etc.
For more information on buying property go to www.gooddeeds.com.au
Thursday, September 10, 2009
What to do with competitive offers.
At the moment it seems like every property under $1,500,000 has numerous buyers fighting over it. So what are your options if somebody else is making offers on the property of your dreams? Here are some to consider:
Option 1 – match the other offer and race to exchange contracts unconditionally
Required steps:
1. Let the selling agent know that you are about to make an offer and want a copy of the contract
2. Have the contract reviewed by a solicitor/conveyancer
3. Order a strata search or building/pest inspection as appropriate (or take the risk of not getting one, though we would never recommend this)
4. Book the bank valuation if you need one (unfortunately this can put you at a disadvantage)
5. Organize to sign the contract and get the 66W certificate signed by your conveyance or solicitor (this waives the 5 day cooling off period)
6. Get the signed contract, 66W and deposit cheque to the vendor’s agent or solicitor and make sure they exchange contracts immediately
The risks are that another buyer might beat you in the race to exchange (especially if they have had a head start) or that you will still need to increase the offer in order to be the successful buyer.
Option 2 – offer the asking price (or even a bit more)
You will then still need to race to exchange as another buyer could still match or better the offer. Depending on whether the selling agent discloses offers or not, this could be a good strategy as the vendor may treat you more favourably – though there are no guarantees.
Option 3 – try to exchange with a cooling off period
Required steps:
1. Let the selling agent know that you are about to make an offer and want a copy of the contract
2. Organize to sign the contract
3. Take the contract and your deposit cheque to the vendor’s agent for exchange
You will then have 5 business days within which to:
4. Have the contract reviewed by a solicitor/conveyancer
5. Order a strata search or building/pest inspection
6. Book the bank valuation
7. Change your mind
However, with other serious buyers it would be unlikely that the agents/vendors would agree to a conditional exchange of contracts. And if you do change your mind, there is a penalty of 0.25% of the agreed purchase price.
For more information go to www.gooddeeds.com.au
Option 1 – match the other offer and race to exchange contracts unconditionally
Required steps:
1. Let the selling agent know that you are about to make an offer and want a copy of the contract
2. Have the contract reviewed by a solicitor/conveyancer
3. Order a strata search or building/pest inspection as appropriate (or take the risk of not getting one, though we would never recommend this)
4. Book the bank valuation if you need one (unfortunately this can put you at a disadvantage)
5. Organize to sign the contract and get the 66W certificate signed by your conveyance or solicitor (this waives the 5 day cooling off period)
6. Get the signed contract, 66W and deposit cheque to the vendor’s agent or solicitor and make sure they exchange contracts immediately
The risks are that another buyer might beat you in the race to exchange (especially if they have had a head start) or that you will still need to increase the offer in order to be the successful buyer.
Option 2 – offer the asking price (or even a bit more)
You will then still need to race to exchange as another buyer could still match or better the offer. Depending on whether the selling agent discloses offers or not, this could be a good strategy as the vendor may treat you more favourably – though there are no guarantees.
Option 3 – try to exchange with a cooling off period
Required steps:
1. Let the selling agent know that you are about to make an offer and want a copy of the contract
2. Organize to sign the contract
3. Take the contract and your deposit cheque to the vendor’s agent for exchange
You will then have 5 business days within which to:
4. Have the contract reviewed by a solicitor/conveyancer
5. Order a strata search or building/pest inspection
6. Book the bank valuation
7. Change your mind
However, with other serious buyers it would be unlikely that the agents/vendors would agree to a conditional exchange of contracts. And if you do change your mind, there is a penalty of 0.25% of the agreed purchase price.
For more information go to www.gooddeeds.com.au
Thursday, September 3, 2009
What to expect in real estate this spring.
Traditionally September heralds the start of the spring selling season where the warm weather and blooming gardens inspire people to sell their houses. After the winter listings drought, real estate agents gear up for the year’s busiest period and hope to power on uninterrupted until collapsing in an exhausted heap on Christmas Eve.
Will 2009 be any different? Not according to the selling agents we have been speaking to. Buyers will be able to expect more choice and, hopefully, less of the competition which has seen weekly auction clearance rates exceed 90% in some parts of Sydney.
Many experts are saying that the first home buyer segment of the market will die down and be replaced by investors entering the market. Our enquiry levels certainly support this forecast.
A recent Residex report said that “housing finance results released by the Bureau of Statistics, [showed] that most of the growth in lending is coming from existing home owners on the move. While investor activity is still weak overall, we expect it to increase later this year and increasingly take over the running from first home buyers.”
The report went on further to say that “investors are returning to a housing market which has withstood the traumas of the last two years far better than commodities, property trusts, shares or term deposits. Despite the doom and gloom merchants, the housing market did not crash or even lose any real value.”
In the meantime, the roll-on effect from the first home buyer boom means that the most competitive segments of the market now seem to be 2nd and 3rd home buyers with budgets from $750,000 up to around $1.3 million. Let’s see if the expected high number of spring listings will materialize and dampen the general enthusiasm this year.
For more information go to our website: www.gooddeeds.com.au
Will 2009 be any different? Not according to the selling agents we have been speaking to. Buyers will be able to expect more choice and, hopefully, less of the competition which has seen weekly auction clearance rates exceed 90% in some parts of Sydney.
Many experts are saying that the first home buyer segment of the market will die down and be replaced by investors entering the market. Our enquiry levels certainly support this forecast.
A recent Residex report said that “housing finance results released by the Bureau of Statistics, [showed] that most of the growth in lending is coming from existing home owners on the move. While investor activity is still weak overall, we expect it to increase later this year and increasingly take over the running from first home buyers.”
The report went on further to say that “investors are returning to a housing market which has withstood the traumas of the last two years far better than commodities, property trusts, shares or term deposits. Despite the doom and gloom merchants, the housing market did not crash or even lose any real value.”
In the meantime, the roll-on effect from the first home buyer boom means that the most competitive segments of the market now seem to be 2nd and 3rd home buyers with budgets from $750,000 up to around $1.3 million. Let’s see if the expected high number of spring listings will materialize and dampen the general enthusiasm this year.
For more information go to our website: www.gooddeeds.com.au
Thursday, August 27, 2009
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
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
Friday, August 7, 2009
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/
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/
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/
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