There’s plenty of media speculation right now about the direction of the real estate market in Australia.
You can almost have your head in the sand and still be bombarded with articles in newspapers, websites and TV news bulletins…and like many things in the media, there’s never a shortage of sensationalism and opinion.
One thing that I think is always something to remember if you’re looking at buying and selling is that there’s always markets within markets and right now, I could show you solid evidence of suburbs that are only a fraction away from what could easily be described as a ‘boom’ market whilst only a few kilometres away, some suburbs have shown that the demand for property has significantly softened.
It doesn’t matter what the media is saying nor what the national statistics are proving, it’s always a good idea to determine exactly how a local market is performing as it may be defying the trends on a macro scale.
From my team’s perspective, we’ve noticed that the number of buyer enquiries and open home numbers is down but the number of sales is significantly up…which is a little strange, but it does prove to us that the buyers out there are serious and willing to put pen to paper.
We’ve made more sales within the past 90 days than any 90-day period since late 2013 so a five year high must indicate that there’s still plenty of good news if you’re a property seller.
In saying this, we’ve noticed that buyers are certainly taking their time to make decisions.
More so than ever before, the time leading up to the first open home is crucial and this is the best time to leverage premium prices from buyers that don’t wish to compete with other buyers should they wait until after the first open home…and we’ve sold quite a few properties of late (for top dollar) with this dynamic in play.
If the property has been on the market for a few weeks or longer, more so than ever before, buyers are taking their jolly time and we’re seeing many instances where they can take up weeks since they first inspected before they are prepared to make an offer.
Their sentiment seems to be “I can afford to take my time as there’s plenty of properties for sale and it’s likely that this one won’t sell in a hurry.”
As such, it’s vitally important for any agent to have strategies to combat this as best as they can.
Only a few weeks ago, I spoke of the importance of an agent to have more skills in their artillery than simply expect their owners to constantly reduce the price.
Ironically enough, since I wrote this article a few weeks ago, we’ve been contacted by plenty of sellers who have been on the market with another agent and have become increasingly frustrated that their agent’s only dialogue is to keep dropping the price.
In one case, the owners reduced the price by $50,000 and less than 48 hours later, the agent was on the phone to them again and requested another $50,000 reduction – clearly an agent that wanted to sell the home quickly and not necessarily for the highest price.
Recently, I was chatting to a friend of mine that works for one of the largest real estate portals in Australia and he said that they’ve noticed a few interesting things in the market at the moment.
Firstly, many agents that have not been selling real estate long enough to experience slightly tougher market conditions haven’t had to develop the skills to effectively market properties in a way that makes them stand out from the crowd…and they haven’t developed the skills required to be able to negotiate buyers up from a low starting offer.
Many of the agents that have been around for longer have a better understanding of how to adjust in changing market conditions and are actually achieving more success now than ever before.
I thought that this is an interesting insight from someone that deals with more real estate agents on a daily basis than most people would ever encounter in a year (I know what you’re thinking – you can keep that job! 😊).
The other dynamic that is really showing up is the agent’s ability to get more people through the door for inspections than competing properties within the area.
As I mentioned above, our numbers are down from where they were several months ago but we’re still attracting solid numbers and we’re constantly told that many of our open homes are amongst the busiest open homes that the buyers have attended on the day.
Additionally, the need for an agent to accommodate more buyers through private inspections has never been greater (especially if the property is not expected to achieve a large number of buyers through the open home) and sometimes, it’s far easier to negotiate a favourable outcome for a seller by setting up a private inspection rather than letting the buyers wait for the open home.
There’s plenty of agents that have adopted the strategy of pushing all buyers into their open homes (and not conducting any private inspections) and I don’t believe that this is the best path to take if the agent has the sellers’ best interests at heart.
We’ve noticed that around 65% of our sales come from private inspections so any agent that won’t run private inspections is certainly reducing the chances of having their sellers’ property sold.
This is also why having an experienced team is certainly a huge advantage as we’re consistently selling homes to buyers that tell us that other agents are just too busy to run private inspections prior to open homes.
My Summary is that it’s never been more important to ensure you’re selecting an agent that knows how to handle things if a property doesn’t sell in the first week.
Ask them to show you the final selling price vs the original listing price of homes that they’ve sold after being on the market for more than 30 days…or perhaps even 60 days – that will provide an insight into how effective they are at offering new strategies or just working down the seller’s expectations on price.
Next week, I’ll share some very interesting statistics about finance and how banks are playing as huge role in the property market as we move forwards.
Until then, Happy Listing & Happy Selling!