edgy Posted 29April, 2020 Report Share Posted 29April, 2020 Hello, I am posting this here because I value the experience and opinions of our esteemed fellow forum members, we certainly are in good company. We're listing our property this week, with the intent to take it to auction... why list now? Well because its me, I am an idiot that doesn't do things the easy way. Anyhow, now we've got that out of the way, what is peoples views on price guide strategies, especially those experienced in the field? My agent obviously has his thoughts tactic (which is standard practice really), and they want to attract enquires by guiding on the lower end... he's seeking my feedback and quite honestly, this goes against my inner morals/beliefs, and my business fundamentals of being transparent & upfront about pricing matters, you deal with me you dont get BS. But that is exactly why I've engaged him, I know him, he's a good character, we've done business before and I think the property talks for its self... So he is seeking my input on guide... That is where I'd like some feedback! Cheers Quote Link to comment Share on other sites More sharing options...
MFX Posted 29April, 2020 Report Share Posted 29April, 2020 I think auctions work great in a bull market, but in slow times like this I think is is just an agent up sell. You always need to remember that agents have their own agenda, which is to sell more houses. They don't really care if they get you an extra $10k on your sale if it takes them an extra 2 weeks of work, when they only make another $200. Their primary focus is to sell so they need to get your expectations down and the buyers up. If they start you low, and then only get offers lower than their ask (which face it, in this market who is going to offer over) then they can beat you down to accept the original low mark. I am always a cynic as I think agents, particularly when the market is going crazy, take far too much of your money to do a simple job. It is times like these that they have to actually do some work for it. Tips, Scott930, DT and 5 others 8 Quote Link to comment Share on other sites More sharing options...
firstone Posted 29April, 2020 Report Share Posted 29April, 2020 To my mind he should be providing at least RP data to give you a guide. If he doesn't do the research what are you paying him to do? Not cynical. WB997.2GTS and edgy 2 Quote Link to comment Share on other sites More sharing options...
edgy Posted 29April, 2020 Author Report Share Posted 29April, 2020 I'm somewhat cynical on most of life's transactions, and I always will be until the deal is done. But I understand you have to have a level of trust around the process too... which to be frank, I always want to be part of, I want to understand it fully, and I want to be very clear about my expectations... I am not one to hand-ball it off as "someone else's job" I tend to think of this as collaborative effort, but maybe I am a control freak? Anyhow, good to see all sides of the coin, because somewhere in the middle is the answer.. and I agree with you Jeff about not letting them lower expectations! At the end of the day, I am not in a position of needing to sell, so I won't if it doesn't make sense, but the market for good & unique properties is still quite good here in Sydney, for now..... MFX and firstone 2 Quote Link to comment Share on other sites More sharing options...
GC9911 Posted 29April, 2020 Report Share Posted 29April, 2020 Hi K, All the most recent sales data is available from multiple sources, one example is “onthehouse”. You can see most recent sales $ & sale dates in your area, their opinion as to value is pretty broad though. Your agent should be/have presented you with a market appraisal based on recent sales in your area. I think auction is good in a hot market, but not having sold in a pandemic market I’m not sure. We did sell our last house at auction (2015) but that was a good market, we had lots of interest, beachside property blah blah etc. I am always aware with auctions that if the property gets passed in & doesn’t sell to the highest bidder on the day then the highest bid on the day almost becomes the default maximum price signal to the market. In my experience we always think our own property is worth more than someone else’s equivalent property. In the end it’s your choice. GLWS edgy 1 Quote Link to comment Share on other sites More sharing options...
firstone Posted 29April, 2020 Report Share Posted 29April, 2020 Auction process is much more expensive from my research. Quote Link to comment Share on other sites More sharing options...
smit2100 Posted 29April, 2020 Report Share Posted 29April, 2020 1 hour ago, edgy said: Hello, I am posting this here because I value the experience and opinions of our esteemed fellow forum members, we certainly are in good company. We're listing our property this week, with the intent to take it to auction... why list now? Well because its me, I am an idiot that doesn't do things the easy way. Anyhow, now we've got that out of the way, what is peoples views on price guide strategies, especially those experienced in the field? My agent obviously has his thoughts tactic (which is standard practice really), and they want to attract enquires by guiding on the lower end... he's seeking my feedback and quite honestly, this goes against my inner morals/beliefs, and my business fundamentals of being transparent & upfront about pricing matters, you deal with me you dont get BS. But that is exactly why I've engaged him, I know him, he's a good character, we've done business before and I think the property talks for its self... So he is seeking my input on guide... That is where I'd like some feedback! Cheers Just a view but throw the rule book out the window. These are unique times. How's your agents strike rate in the last 6 weeks compared to the same period a year ago. You have probably done your own homework and have a figure on what it's worth / willing / need to transact at. I'd put a range around that and see where the difference is with your agent. Let them explain their range first xand compair the pair. I had a valuation done a few months ago for a loan extension and was impressed with the valuation analysis if you looked at it from the other side of the fence ( listed detailed pro's and con's compared to recent sales one on one AND landed on a number. ( compared garage space, floor plans, quality of views , block size, landscaping, age, design aspects, age of reno's/ building condition etc). Compared houses under the valuation and houses sold for above the valuation. I reckon in these times, an auction just gets perhaps one / two real buyers out of the woodwork in a short time frame that see value / want it at a price they would transact at. I suspect the auction itself may not get you the you a result, but a negotiation 30 minutes after its passed in might. PS It ain't sold until your got the entire amount in the bank. May be a different price point, but hearing those with topped up pre approved finance that has its ending date approaching are laying down deposits at auctions and the banks are having pre approval remorse when the income from 6 months ago has taken a plus 20 percent hit today ( think big 4 accouting firm employers as one example ) and doesn't meet serviceability requirements and they won't supply the rest of the cash to settle. Well at least the deposit should cover your auction costs and a bit extra in that case. Quote Link to comment Share on other sites More sharing options...
tomo Posted 29April, 2020 Report Share Posted 29April, 2020 I have just sold a property , listened to all sorts of BS from the agent and punters , This the forth home I have sold over the years , The trick is good marketing so the punters can see it ..and the house will sell its self. Quote Link to comment Share on other sites More sharing options...
Jason A Posted 29April, 2020 Report Share Posted 29April, 2020 Hey @edgy lets be honest is a buyers market and quit different to anything we’ve seen in recent times. You will have a gut feeling of what you want, shoot for the lower end of that target. The market is more likely to go down than up in the next 6 months as all the bad news filters in. I think we are in a bubble at the moment where people are focused on good news - at least those who still have a job. i was lucky to sell and settle on a rental I had in early April. I will now sit and wait a couple of months until the reality of our economic circumstances filters through. From there I expect some correction in price, how much - depends on unemployment and how this looks like it will recover. There are a lot of landlords collecting less or no rent and a lot of people not paying mortgages. Good luck with it . Quote Link to comment Share on other sites More sharing options...
DJM Posted 29April, 2020 Report Share Posted 29April, 2020 2 hours ago, MFX said: I think auctions work great in a bull market, but in slow times like this I think is is just an agent up sell. Absolutely agree. Problem with an auction in a shit market is you might only have 1 or 2 buyers (or none!) and the auction process tells them exactly where they stand. Let's say i was prepared to pay 1.5, I turn up to an auction, vendor bid at 1.3, no other bids, all of a sudden my max is now reset much lower. Or someone else bids 1.25M and I bid 1.3 then it stalls. Again I now know noone else is interested at 1.3 or higher so forget the 1.5 i had in mind. By contrast, with a private sale, a good agent can tease out a buyer's maximum price. If i really want it, the agent will inject a little FOMO and get me to agree to offer 1.5 even if there is no second buyer or there is and he is well below me. I don't know that because he is "behind the curtain", confidential. The middle ground is to run your auction campaign and if you get strong interest at the right level then run it to auction and hope they all bid the price up. But as you approach auction if the interest is skinny then flip over to private sale. We did this on our display home recently, campaign started then CV19 kicked in, OFIs banned etc and we really didn't have a strong pool of buyers so we flipped to private sale and managed to jag a deal within the range about a week after the auction was to have taken place. The agent genuinely had a second buyer coming back for a 3rd inspection and used that to leverage the first buyer to lift his price and sign a contract before the other guy swooped in and stole it. GLWS! MFX 1 Quote Link to comment Share on other sites More sharing options...
Stephen Tinker Posted 29April, 2020 Report Share Posted 29April, 2020 edgy - as a matter of interest, would you sell your GT3 in todays market? It probably wouldn't be the smartest time to sell the Porsche, but if you HAD to sell, you would probably take a big hit compared to selling (say) 6 months ago. I know a GT3 is not a property or an asset, but most of us on here value our cars highly and probably would not sell in a depressed market such as this unless we were 1) forced to, or 2) to upgrade. Non of us know your personal circumstances, but as advised by some educated blokes above, maybe holding off until sunnier days is fair advice.... Tips 1 Quote Link to comment Share on other sites More sharing options...
edgy Posted 29April, 2020 Author Report Share Posted 29April, 2020 1 hour ago, firstone said: Auction process is much more expensive from my research. It is more money, yes but actually right now interesting enough physical auctions are obviously a no go, but online are on a slow uptake, however still a drop in the ocean to what would normally be taken to auction, they are getting quiet, so much so, we got our auctioneers fees halved. Food for thought. 1 hour ago, smit2100 said: Just a view but throw the rule book out the window. These are unique times. How's your agents strike rate in the last 6 weeks compared to the same period a year ago. You have probably done your own homework and have a figure on what it's worth / willing / need to transact at. I'd put a range around that and see where the difference is with your agent. Let them explain their range first xand compair the pair. I had a valuation done a few months ago for a loan extension and was impressed with the valuation analysis if you looked at it from the other side of the fence ( listed detailed pro's and con's compared to recent sales one on one AND landed on a number. ( compared garage space, floor plans, quality of views , block size, landscaping, age, design aspects, age of reno's/ building condition etc). Compared houses under the valuation and houses sold for above the valuation. I reckon in these times, an auction just gets perhaps one / two real buyers out of the woodwork in a short time frame that see value / want it at a price they would transact at. I suspect the auction itself may not get you the you a result, but a negotiation 30 minutes after its passed in might. PS It ain't sold until your got the entire amount in the bank. May be a different price point, but hearing those with topped up pre approved finance that has its ending date approaching are laying down deposits at auctions and the banks are having pre approval remorse when the income from 6 months ago has taken a plus 20 percent hit today ( think big 4 accouting firm employers as one example ) and doesn't meet serviceability requirements and they won't supply the rest of the cash to settle. Well at least the deposit should cover your auction costs and a bit extra in that case. I've been very on top of the lending policy, as this is where I think the impact will ultimately come from over the next 6-12 months... so far its still ok, some are just tightening up on bonus income allowances. 38 minutes ago, tomo said: I have just sold a property , listened to all sorts of BS from the agent and punters , This the forth home I have sold over the years , The trick is good marketing so the punters can see it ..and the house will sell its self. Good to hear, I am of that mind-set that the property will sell its self too, unique enough with x-factor and a strong campaign. 19 minutes ago, Jason A said: Hey @edgy lets be honest is a buyers market and quit different to anything we’ve seen in recent times. You will have a gut feeling of what you want, shoot for the lower end of that target. The market is more likely to go down than up in the next 6 months as all the bad news filters in. I think we are in a bubble at the moment where people are focused on good news - at least those who still have a job. i was lucky to sell and settle on a rental I had in early April. I will now sit and wait a couple of months until the reality of our economic circumstances filters through. From there I expect some correction in price, how much - depends on unemployment and how this looks like it will recover. There are a lot of landlords collecting less or no rent and a lot of people not paying mortgages. Good luck with it . I agree with a lot of what you say mate, and that is where our thoughts lie... so I would like to get out now in an ideal world allowing us the capital to buy the next one when it comes up and there is down downward pressure... a good time to trade up as they say! 7 minutes ago, DJM said: Absolutely agree. Problem with an auction in a shit market is you might only have 1 or 2 buyers (or none!) and the auction process tells them exactly where they stand. Let's say i was prepared to pay 1.5, I turn up to an auction, vendor bid at 1.3, no other bids, all of a sudden my max is now reset much lower. Or someone else bids 1.25M and I bid 1.3 then it stalls. Again I now know noone else is interested at 1.3 or higher so forget the 1.5 i had in mind. By contrast, with a private sale, a good agent can tease out a buyer's maximum price. If i really want it, the agent will inject a little FOMO and get me to agree to offer 1.5 even if there is no second buyer or there is and he is well below me. I don't know that because he is "behind the curtain", confidential. The middle ground is to run your auction campaign and if you get strong interest at the right level then run it to auction and hope they all bid the price up. But as you approach auction if the interest is skinny then flip over to private sale. We did this on our display home recently, campaign started then CV19 kicked in, OFIs banned etc and we really didn't have a strong pool of buyers so we flipped to private sale and managed to jag a deal within the range about a week after the auction was to have taken place. The agent genuinely had a second buyer coming back for a 3rd inspection and used that to leverage the first buyer to lift his price and sign a contract before the other guy swooped in and stole it. GLWS! Thanks for that feedback, I knew you'd have some insight mate... I like the idea of gauging interest and potentially flipping to private sale close to the auction if the interest dies off! That is very sage advice, as you say... if it passes on a vendor bid that is only leverage for the opportunistic buyer, and I've seen that happen to my parents. But really if I am honest, my thinking with setting an auction and guiding closer (to what we want) to the mark, is it may bring out prior bids/offers and we'd be fully prepared to sell prior at fair offers... having a date just puts an end game in place and creates some urgency around getting their offers in. My agent has been performing quite good, even during the lock downs... we are allowed 1 on 1 inspections still here in NSW, so its a little more work for less numbers but they're finding it separates the wheat from the chaff so to speak. 14 minutes ago, Stephen Tinker said: edgy - as a matter of interest, would you sell your GT3 in todays market? It probably wouldn't be the smartest time to sell the Porsche, but if you HAD to sell, you would probably take a big hit compared to selling (say) 6 months ago. I know a GT3 is not a property or an asset, but most of us on here value our cars highly and probably would not sell in a depressed market such as this unless we were 1) forced to, or 2) to upgrade. Non of us know your personal circumstances, but as advised by some educated blokes above, maybe holding off until sunnier days is fair advice.... Hear what you're saying... honestly the market for our cars was bad a year ago still, and no doubt would be exacerbated by the current climate somewhat... so I guess you do not know until you transact! But the question was more around setting guide prices than is it the right time to sell... I'll answer that one soon enough for all of you consider it a community service by your friendly local village idiot! firstone, tomo and Tips 3 Quote Link to comment Share on other sites More sharing options...
Dreamr Posted 29April, 2020 Report Share Posted 29April, 2020 I have to totally agree with a comment made by @MFX .... for an agent to try for another $10k for you means $200 for him .. On a $1m offer on your property he has already made his commission .. to try and get an extra $30k for you is counter-productive for him to risk losing a sale ... Now ... I'm not implying anything about your agent in particular, bit about the real estate game in general. I've always maintained that real estate in Australia is not an efficient model .. it's basically the estate agents negotiating against themselves and what they know the buyer will pay and the seller will take .. unlike the US where each side has an agent that entirely acts in their clients best interest ... Stephen Tinker, firstone, edgy and 2 others 4 1 Quote Link to comment Share on other sites More sharing options...
Stephen Tinker Posted 29April, 2020 Report Share Posted 29April, 2020 ^^^^^^ star comments by Dreamr ^^^^^^ Not many things I appreciate out of the US, but having an experienced agent working independently for you is way better than we have in Australia where the agents have a hand in both sellers and buyers pocket.... Dreamr and firstone 1 1 Quote Link to comment Share on other sites More sharing options...
edgy Posted 29April, 2020 Author Report Share Posted 29April, 2020 I agree, on a whole they are typically a double agent.... I had a friend recently trying to buy another property and where he was looking price point wise it was very active, for the agents it was like shooting fish in a barrel! To the point, they just took the best offer they could close on... and that is not in the best interest of the seller when they are effectively working for the buyer and themselves. Although, I had read about people successfully provisioning in their contracts additional remuneration for hitting certain values above pricing benchmarks in their contracts. Tips 1 Quote Link to comment Share on other sites More sharing options...
DJM Posted 29April, 2020 Report Share Posted 29April, 2020 3 hours ago, Dreamr said: I have to totally agree with a comment made by @MFX .... for an agent to try for another $10k for you means $200 for him .. On a $1m offer on your property he has already made his commission .. to try and get an extra $30k for you is counter-productive for him to risk losing a sale ... Easily fixed. Get me $1M and you get your 1.x% commission. For every dollar over $1M I give you 5% of the upside. Watch the greedy fuckers milk every last cent out of a buyer then 😂. Gotta pay for the latest black AMG with red interior somehow 🤔 I have used that many time successfully. Win win. FAP911, edgy and firstone 2 1 Quote Link to comment Share on other sites More sharing options...
Jason A Posted 29April, 2020 Report Share Posted 29April, 2020 @edgy when you buy the next property, make sure you get a nice big shed that’s got a house on the block 🚘 firstone and GTP911 1 1 Quote Link to comment Share on other sites More sharing options...
Dreamr Posted 29April, 2020 Report Share Posted 29April, 2020 16 minutes ago, DJM said: Easily fixed. Get me $1M and you get your 1.x% commission. For every dollar over $1M I give you 5% of the upside. Watch the greedy fuckers milk every last cent out of a buyer then 😂. Gotta pay for the latest black AMG with red interior somehow 🤔 I have used that many time successfully. Win win. I totally agree with you and was just about to offer the same advice ... In a market like this, I would be inclined to offer a flat fee commission to start with (well under their crazy high % rates) Agents will be struggling for work and will be ready and willing to negotiate their fee ... hell, I negotiate their fee even when times are good. Who else earns $10k - $15k for less than a weeks work in boom time?? Bloody ridiculous!! If you believe your house to be valued at $1m, flat rate for the sale up to that figure, then offer an incentive for a range above that then a higher rate above that still ... the vested interest then falls back on their shoulders .. I have often thought about listing privately and even if we got $20k less than listing, we would be no worse off ... but, I am also wise enough to realise the value of their network and buyer databases and the realisation that at times they can often get a higher price than I could on my own ... It's a balancing act for sure ... but if you take control and don't let yourself get railroaded, it has every chance of working out. When we bought our house 5 years ago, we were prepared to pay $30k more than we did ... the agent didn't ask, so we didn't offer .. edgy and DJM 2 Quote Link to comment Share on other sites More sharing options...
GC9911 Posted 29April, 2020 Report Share Posted 29April, 2020 12 minutes ago, DJM said: Easily fixed. Get me $1M and you get your 1.x% commission. For every dollar over $1M I give you 5% of the upside. Watch the greedy fuckers milk every last cent out of a buyer then 😂. Gotta pay for the latest black AMG with red interior somehow 🤔 I have used that many time successfully. Win win. As DJM says, I did this with our last sale, % commission ramped up as the sale price achieved increased, establish a base for the commission then benchmark sale price targets. Oh, & make sure they are quoting commission inc or ex GST. Tips and DJM 2 Quote Link to comment Share on other sites More sharing options...
MFX Posted 29April, 2020 Report Share Posted 29April, 2020 22 minutes ago, Dreamr said: I have often thought about listing privately and even if we got $20k less than listing, we would be no worse off ... but, I am also wise enough to realise the value of their network and buyer databases and the realisation that at times they can often get a higher price than I could on my own ... It's a balancing act for sure ... but if you take control and don't let yourself get railroaded, it has every chance of working out. When we bought our house 5 years ago, we were prepared to pay $30k more than we did ... the agent didn't ask, so we didn't offer .. I have actually sold several properties myself. A few years back I had agents that including all of their bulls#!t marketing costs (still trying to sell me on putting an add in the paper where half the add was their logo) were going to take around $24k if they got their predicted $820-850k. I sold it myself in 2 days and got $910k and it cost me about $1500 to market it. Eyes wide open DJM 1 Quote Link to comment Share on other sites More sharing options...
GC9911 Posted 29April, 2020 Report Share Posted 29April, 2020 4 minutes ago, MFX said: I have actually sold several properties myself. A few years back I had agents that including all of their bulls#!t marketing costs (still trying to sell me on putting an add in the paper where half the add was their logo) were going to take around $24k if they got their predicted $820-850k. I sold it myself in 2 days and got $910k and it cost me about $1500 to market it. Eyes wide open $910K, thats 2 x GT3 & an RS if my maths is right. You must have a secret garage somewhere 😂😂😂😂 edgy and MFX 2 Quote Link to comment Share on other sites More sharing options...
1q2w3e4r Posted 29April, 2020 Report Share Posted 29April, 2020 You don't get the highest price at auction, but you do get certainty around the timeframe provided you have bidders meet the reserve on the day. Are you upgrading or looking to move for other reasons? GC9911 1 Quote Link to comment Share on other sites More sharing options...
firstone Posted 29April, 2020 Report Share Posted 29April, 2020 I've marketed and sold 2 properties myself. The agents were asleep at the time. If your agent has a good network built up really smashing it is your best case to use them. Sounds like you're set. edgy 1 Quote Link to comment Share on other sites More sharing options...
edgy Posted 29April, 2020 Author Report Share Posted 29April, 2020 2 hours ago, DJM said: Easily fixed. Get me $1M and you get your 1.x% commission. For every dollar over $1M I give you 5% of the upside. Watch the greedy fuckers milk every last cent out of a buyer then 😂. Gotta pay for the latest black AMG with red interior somehow 🤔 I have used that many time successfully. Win win. Do you (or anyone) happen to have any draft language you could forward on? I’m sure I can appendix it to the agreement. 2 hours ago, Jason A said: @edgy when you buy the next property, make sure you get a nice big shed that’s got a house on the block 🚘 That was one chain of thought mate... we had our eyes on some acreages in the highlands, but I don’t think you can take the boy (and girl) outta Sydney.... especially not away from the ocean. 1 hour ago, 1q2w3e4r said: You don't get the highest price at auction, but you do get certainty around the timeframe provided you have bidders meet the reserve on the day. Are you upgrading or looking to move for other reasons? Upgrading mate, want to be closer to our parents and the beach/ocean. Quote Link to comment Share on other sites More sharing options...
DJM Posted 29April, 2020 Report Share Posted 29April, 2020 1 hour ago, edgy said: Do you (or anyone) happen to have any draft language you could forward on? I’m sure I can appendix it to the agreement. It just gets noted on the agency agreement. Where they state the commission payable it’ll say “*.*% up to $1M, *.*% for any amount exceeding $1M” if your agent is agreeable to it, he should be able to word it. I’ll be in the office tomorrow, see if I can track one down and PM it through. edgy and GC9911 2 Quote Link to comment Share on other sites More sharing options...
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