Straight from the trenches! What’s really happening in residential real estate land?
When I sit down to discuss the sale of someone’s house in, for example, Victoria Park we go back to the data.
What are the sales volumes like?
In 2008, with the spectre of the GFC hanging over us like the grim reaper in an 80′s AIDS advert, there were only 86 house sales in the suburb. Not since 1992 have we seen volumes so low (also a grand total of 86 sales). And yet here we are in November, a month to go of 2015 and there have only been 65 house sales. We are unlikely to crack the recent historical low of 86 house sales.
And if you are selling a unit in Victoria Park the data is even more bleak. Sales this year sit at 72 unit sales. The next lowest was 1996 with 144 unit sales. Even last year there was 145 recorded unit sales.
We are in a period of historical low sales volumes.
People just aren’t interested in speculating in residential real estate. There is no short term capital growth prospects. The banks have made investment lending unattractive. WA’s unemployment rate is creeping up and the movement of people to WA from the Eastern States in 2014 was a net negative for the first time since 2002.
Of course in a city of 2 million people there are certainly Buyers but they are predominately owner occupiers, with real reasons to buy. Growing families, down-sizing, moving for work, moving for schooling, death, divorce, you name it there are a plethora of genuine reasons for Buyers to act.
My job is to make sure that in the current market place, Baston & Co. Property’s clients are amongst the successful Sellers.
Never has it been more important to understand Buyer motivation, their needs and listening to their feedback.
Buyer relationships are the key to unlocking a successful outcome for our clients.
To this end we employ a Buyer Manager whose role is to simply engage and service their buying requirements.
This constant engagement means our pool of clients and their properties are top of mind for qualified Buyers.
This seems simplistic and obvious. But try being a business and committing to employing someone to work with Buyers when there is no guarantee that they will buy from our clients, that is, no guarantee of a revenue stream.
Yet, with experience and time in the market, I know the value of courting and servicing Buyers. Not just on a simple transactional level, but on a deeper level. Knowing how Buyers think is knowing your market place.
Constantly calling and referencing their feedback week-in week-out builds an accurate idea of the prevailing market sentiment that no data set released after the fact can ever give.
This relationship with Buyers gives our business the one tool that genuine Sellers in a low volume sales environment really want. “At what price can I sell?”. It is an almost unobtainable thing, the truth about selling price, before the fact. An educated grasp of the market place’s twists and spasms is the most powerful tool a genuinely good local Agency has.
You’ve heard the horror stories. “…our home was on the market for four months and it didn’t sell…” This simple sentence is about a failed Agent and Seller relationship. One where the fundamental truth of the selling price was not understood by the Agent, nor communicated successfully to the Seller.
So how do you as a potential Seller avoid this? I say select the Agency who is dealing with the most Buyers. And selling the most property in your area. Not the cheapest Agency. Not the nicest. Not the shiniest suit. Just select the Agency with proven results.
This again seems blindingly obvious. But only yesterday I spoke to a property owner about two failed sales campaigns on the same property with different Agents. He said that both Agents said they could “get more”. The fact that the real selling price, will in all likelihood, be lower than his 2009 purchase price could have influenced the Agents to say this. Perhaps scared of losing the potential listing opportunity they have suggested a potential sales figure that certainly induced the client to commit to a selling campaign. Prevailing Agent sentiment has it that the market will “educate” the Seller and the commission will come in time as the motivated Seller decreases their listing price.
So this Agent thinks, just list, then worry about the price with the Seller. This is at best unethical. At worst, the process that it unlocks of gradually reducing price over time to get a sale almost certainly means the best possible price for the property will not be achieved.
So if you are considering selling. First put yourself in the Buyer’s shoes. Go to some home opens in your area. See which Agency calls you back.
Look at who is selling the bulk of property in your area. Make sure your Agency understands intimately the market that your property is in and can clearly explain a strategy to unlock the best possible sale for your asset.
Never has the decision of Agency selection been so important as in the current market.
Derek Baston
M : 0417 99 23 24
