Post ‘GFC’ Real Estate has the “deal” first and the family second.

Post ‘GFC’ Real Estate has the “deal” first and the family second.

Today, I thought I would give you an insight into my overview of the last 2 years and hope the information assists you to move on to smarter property sales and purchases.

The world changed post March 2008, and so has the local real estate market. Today’s vendors and buyers remain totally confused and understandably so. As two years on, sales trends are still so erratic, if you look for security in each short spike continuing as a trend, most will get it wrong.  The last two plus years have seen the most dramatic swings of opinions and sales volumes since the early 1990’s. Long periods of minimal sales have been followed by bursts of sales, reminiscent of the golden years. At least back then vendors and purchasers  alike, could make a calculated decision based on predictable trends and sales evidence, as to the most likely sale price and plan their lives ahead accordingly. Back then, many properties sold at the top of the price range, buyers had more income security and were more inclined to compromise on the perfect property (there is no such thing) and were more inclined to put the family’s happiness first, rather than to negotiate to the final dollar.

For two years the only consistent property trend is inconsistency, so stop trying to pick the market and focus on how the quality and genuine appeal of each property meets the criteria and desires of your family or yourself. Yes, price is always important and the evidence is that property prices have lowered and represent great buying for genuine buyers. However, many buyers are living in a false world and dreaming of a ‘property collapse’ and consistently missing out on well priced properties, which would have been ideal for their own needs.

The reality is that stock levels are down, around 30% to approx 330 house sales in Mosman for the last two years and buyers are fewer too. Prices are down and many buyers have less money. Sellers will understandably take less as most will re-buy for less. Buyers are patient as they are more inclined to wait for “A” grade stock, of which nearly all is selling.  However the biggest fact is more buyers than ever are regretting missed opportunities.  Personally, I’ve been fortunate to have sold a house every 10 days on average for 18 months, representing around $180,000,000 worth of property over every price range.  I feel like a walking research library of consumer sentiment, both buyers and sellers alike, positive and negative. I’m spending on average one day per week with potential vendors and buyers discussing when and how they should move in the property market.  The truth? There are many buyers and sellers who have made the best property transaction of their lives over the past two years.

Rocky Point

BUY PRINT

Here are a few of my tips for buying and selling in this post GFC market:

Generally speaking, your preferred and most trusted agent and agency, should almost act as your informal property advisor and not just jump in for the listing or quick sales commission. Use them to analyse your property needs. They should be capable of mapping a purchase or creating the best selling strategies, which maximise your position within the current market.  In any property market there are winners and losers, so make sure your advice is well supported by third party data and evidence and not baseless opinions.

Buying – generally speaking this is the best market to purchase in if you are looking longer term. We have buyers that have been looking for the ‘impossible deal’ for years. Their families could have been settled in their dream house and financially better off years ago.

  • Purchase “A” grade properties and not those compromised, as when the market strengthens the better properties will appreciate ahead of market. So, take a longer term perspective and don’t be swayed just by cosmetic beauty, as this is the easiest and the least costly attribute to rectify.
  • Most fully-renovated properties represent better buying in this market than land value sales, as you cannot buy the land and rebuild for the same cost of a completed house
  • Longer term settlements and special conditions such as ‘put and call’ purchase agreements  are becoming more typical , so don’t hesitate to present your terms and not simply disregard a property if the standard contract terms are not attractive to you.
  • The selling agents must be capable to assist you to the most intimate level. If a property is not right then he/she should be able to source your preferred property. For example, our subscribers represent over 5,000 buyers in 53 countries worldwide and our subscriber sales drive our business. As at today we have sold $956,000,000 worth of property to our private clients.
  • Don’t outsmart yourself and immediately discount a property falsely assuming that the price will drop. Recognise and accept that there is always sufficient demand for good properties and a fair price is reflective of a good property
  • Be a smart and educated buyer so you can move quickly, which most often means using the agent to do your research and rationale for you. Understand what property credentials justify value and don’t simply group all properties as being much alike.

Selling – “Trust me, we’ll sell your home no worries”, doesn’t work these days. Reputations are being made and lost, with buyers finding many agents short on ‘detail’, as the verbal bluff is falling on deaf ears.  Does this mean that you shouldn’t sell? Well hell no! – you just need to ensure that you are driving the sales process and not taking any short cuts.

  • The best agents act more as “property advisors” than hard selling agents, they work to appreciate your specific needs, and then deliver. 50% of my sales are to buyers who initially say no.  Once we analyse all the facts together via meetings and written documents, we realise that a particular property is more appealing than first thought, so keep an open mind.
  • Some properties are perfect for auction, most are not. Prior to the GFC every buyer hated to compete at an auction, today most buyers relish the thought of going to an auction, so they can low bid it. Strategies that counter handing too much power to the buyers are the key.
  • Purchasers will remember 80% of what they read and 20% of what they hear. The verbal pitch is critical but the best agents reinforce their sales pitches to good prequalified buyers as strategic emails.
  • A post GFC successful track record is critical, as you know they are succeeding with sales in this market.  Some agents went on holidays last year for six months as they couldn’t sell, some spend all their time trying to co-list other agent’s properties. Most are complaining. This is a real market and the sales are being made, so look for the ‘real’ performers.
  • Don’t co-list a property, as only one agent and agency can affectively represent your best interests. With a joint listing, buyers will contact both agents looking for the cheapest deal, so recognise that no agent owns a buyer and that buyers are not even loyal to an agent when buying. If they want a property they will deal with the selling agent.

I hope some or at least one of these points will assist you in this post GFC property market.  Stay tuned for an early Spring market with most properties launching mid-August. Stock levels won’t be huge, a fact that has been so for two years, but we expect many buyers will be looking to buy and secure their new homes and settle in for Christmas this year.

Richard.

This week’s sales Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate, Cammeray real estate Click Here

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