7:30 report discussion on a possible housing bubble ready to burst
- Thread starter b simpson
- Start date
Graham and the boys have damaged my liver but never my eyes.
RPD and others are key to the valuation piece, but the suggestions made in this thread that banks and others spend significant time worrying about shifts in the reported median suburbs just isn't the case. It's far more complex than that. Ultimately, you're looking for predictive measures of risk of loss given default and monthly median reporting lacks utility in that regard. It's simply not granular enough.
There are a range of other services and products available that we use, but they're very different to the monthly stuff the public and the media get excited about.
Sounds like it's possibly a good result.
Did you consider the agent was trying to get you to take the lower price so he/she could get a sale and therefore a commission? Maybe he/she needed a sale really badly to make the payment on the Beemer that month? They have to eat you know, and if they don't sell something, they get a bit hungry.
Look, I don't doubt that there will be some nice wins with an auction.
I've seen some beauties myself - but all during a boom, and let's face it; you can sell anything during a boom.
How were the clearance rates yesterday in Melb now that the market has stopped?
And don't chime in Andy with those BS figures including sales after auction - which are really plain old private sales that happened after the auction failed.
Just so we are comparing apples with apples, make sure you add in the passed in figures which were passed in on a Vendor's bid.
If the interest rates go up two more times this year as is predicted, let's see how the "spring selling season" goes this year up in them thar "leafy suburbs"...or anywhere for that matter.
Our office sold four from four yesterday. All over the reserve. Inner east had some very good results yesterday. The market overall is very patchy though.
I don't think there is any point discussing this further as if I say something sold over the reserve you will say that we should have been able to get that price via private sale, which is a complete load of bs.
We'll agree to disagree.
I don't think there is any point discussing this further as if I say something sold over the reserve you will say that we should have been able to get that price via private sale, which is a complete load of bs.
We'll agree to disagree.
Nope; ya don't get off that easy.
Give us the details of the campaign of only one of them and we'll see what actually happened.
One was an apartment in Hawthorn. It actually was two top storey apartments on one title over looking the yarra and surrounding parkland. These two apartments were being offered together.
Reserve was 1.2m, sold for 1.25m. Both interested parties locked horns from the opening bid of 1.1m
I am the first to admit that auctions at the moment are a lot tougher than a few months ago, but if you have a good/unusual property I would always suggest auctions. I also agree that you don't need to go overboard with pointless advertising however if you want to attempt to achieve the 'icing on the cake' then auction is the way to go.
With private sales its very difficult to get buyers to pay more, there is no urgency for them, they can't see other buyers wanting it and offers are often conditional which vendors/we dont like.
Also in this volatile market, it's very difficult to value properties so if takes price out of the equation and allows the market to determine true value.
Reserve was 1.2m, sold for 1.25m. Both interested parties locked horns from the opening bid of 1.1m
I am the first to admit that auctions at the moment are a lot tougher than a few months ago, but if you have a good/unusual property I would always suggest auctions. I also agree that you don't need to go overboard with pointless advertising however if you want to attempt to achieve the 'icing on the cake' then auction is the way to go.
With private sales its very difficult to get buyers to pay more, there is no urgency for them, they can't see other buyers wanting it and offers are often conditional which vendors/we dont like.
Also in this volatile market, it's very difficult to value properties so if takes price out of the equation and allows the market to determine true value.
Oh and the difference in cost between auction and private sale is negligible. We don't charge an auction fee.
That would be this one, no?
http://www.realestate.com.au/property-apartment-vic-hawthorn-107358856
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RE Agents are simply market-makers. As a group they are neither good nor bad (although they do of course each differ a geat deal individually). They provide both options (of private treaty and action sales), and we as sellers and buyers are free to choose which one suits us on the day. Of course they try to influence us in that choice, but we don't have to take their advice.
I would only ever buy through private treaty, and would only ever sell through auction. (And if a property is going for auction that I want to buy, I simply make a pre-auction offer.)
This is because as a buyer I know what I am willing to pay, and have no interest in entering into an egotistical bidding war or letting emotion or time pressures influence me. As a seller, I want exactly the opposite: I want pressure, emotion and ego to take control of the competing bidders' brains.
I don't think it's at all fair to blame RE agents for catering to our wants. Far more logical would be to blame ourselves for demanding free markets, and then not having the wits or willpower to take full advantage of that freedom.
I would only ever buy through private treaty, and would only ever sell through auction. (And if a property is going for auction that I want to buy, I simply make a pre-auction offer.)
This is because as a buyer I know what I am willing to pay, and have no interest in entering into an egotistical bidding war or letting emotion or time pressures influence me. As a seller, I want exactly the opposite: I want pressure, emotion and ego to take control of the competing bidders' brains.
I don't think it's at all fair to blame RE agents for catering to our wants. Far more logical would be to blame ourselves for demanding free markets, and then not having the wits or willpower to take full advantage of that freedom.
Very well put Belbo.
I personally think property auctions are a revolting spectacle, that reflect badly on all concerned. Like pokie machines, undesirable, but effective at relieving fools of their money.
Personally I think the most equitable and socially ethical method is the Scottish system of sealed bids
I didnt bother replying given this argument is pointless.. it wont end with either party admitting being incorrect neither will either party gain anything form it...
Logic suggests that rpdata and the price it charges for its full services is NOT being paid by mum and dad investors but instead businesses such as... banks.
But again pointless argument.
Logic suggests that rpdata and the price it charges for its full services is NOT being paid by mum and dad investors but instead businesses such as... banks.
But again pointless argument.
Nobody suggested "significant time worrying" it simply is included in the mix of data they use... and I was simply replying to a post stating it WASNT used at all...
I remember very well a property show a few years ago (probably Phil and Kirsty) where a youngish couple fell in love with a Scottish property. It was the "offers over" system, which just seems silly to me, but because there were several parties wanting to put in offers, it went to sealed bids and because they loved the place, they put in a bid considerably higher than they would have otherwise. A week or more after winning the property, they found out they had bid about 80 thousand pounds more than the next lowest bid. They pulled out and didn't buy... not sure how they got out of it.
We tried to buy by tender once (same system - different name) and I hated it. No idea if you are tens of thousands over the other bidders, or have lost out by $1000.
Give me an auction any day, but still prefer private treaty, as long as there is a "price" and not a "what do YOU think it is worth?" scenario, which I also dislike.
Mortgage insurers and banks don't price by suburb. It's just a question of metro, regional and the rest. Perhaps you should have contacted GE.
No, I'm correcting your assertion that banks and insurers rely in any meaningful way on the oft discussed monthly median reports.
And all banks underwrite at the individual house level...that's what the vals are for. We don't price at the individual house level beyond LVR much because it's administratively cumbersome for negligible benefit.
We pay RP and others a truckload, but it's about valuations of individual properties either directly or across portfolios using their their avms.
No, you wrongly suggested they were used by the insurers for pricing purposes. They're not. The monthly median reporting has as much relevance to managing a mortgage portfolio as reading the real estate section of the paper.
It's for the punters, not for insurers or banks. I get a list of high risk suburbs from the insurers and there is actually very little relationship between it and the rp Data reports because risk is much more complex than that.
None of this is to suggest rp data is messing with the numbers. They tend to position the commentary around the reports in a way that isn't surprising given their model, but they're hardly Robinson Crusoe in that respect.
You're just not in the know, tcocaro, or didn't you know?
Private treaty offers are a bit like Dutch (or Scottish) auction bids, if you think about it. Your private treaty offer is a bid where you're blind to the level any other bids, if any even exist, but you're always told they do, so you panic, and increase your offer . . . .
Anyway, here's a true story of what happened to me a few years ago.
A house I really, really, really wanted to buy was put up for sale unexpectedly with only a 3-week campaign till the auction day (i.e. half the usual time).
I went to the first inspection and inquired of the young assistant sales agent why the hurry, and he helpfully replied that the owner needed to sell to raise funds to buy for herself at an auction on her dream home coming up in precisely 3 weeks and 1 day. You beauty! I thought.
So, I hurriedly cobbled together finance approval and submitted a pre-auction offer a week before the auction date around 8% lower than I would have been prepared to pay at auction. Naturally, I stipulated the vendor had till 5pm the following day to accept and cash the deposit cheque attached to my offer letter, or tear up the bank cheque.
The next morning the principal of the agency calls me. The offer's too low, I'm told, but will I come to the auction? No! Why not? Why would I want to castrate my own current offer? Won't you offer more now then, he replies? No! Why not? Why would I bid against myself here; this isn't an auction, is it? Okay, he says, but will you come to the auction because the current offer's too low and put in the same bid for the place there? No way! And you've now got 6 hours to get the vendor to accept or reject my current and final offer. Good day sir!
At 5 minutes past 5pm, the agent calls and says the offer has been accepted. He asks as an aside, where do you live? The semi next door to the house you just sold me. What? Oh, you did bloody well keeping that bit of information from me!
Private treaty offers are a bit like Dutch (or Scottish) auction bids, if you think about it. Your private treaty offer is a bid where you're blind to the level any other bids, if any even exist, but you're always told they do, so you panic, and increase your offer . . . .
Anyway, here's a true story of what happened to me a few years ago.
A house I really, really, really wanted to buy was put up for sale unexpectedly with only a 3-week campaign till the auction day (i.e. half the usual time).
I went to the first inspection and inquired of the young assistant sales agent why the hurry, and he helpfully replied that the owner needed to sell to raise funds to buy for herself at an auction on her dream home coming up in precisely 3 weeks and 1 day. You beauty! I thought.
So, I hurriedly cobbled together finance approval and submitted a pre-auction offer a week before the auction date around 8% lower than I would have been prepared to pay at auction. Naturally, I stipulated the vendor had till 5pm the following day to accept and cash the deposit cheque attached to my offer letter, or tear up the bank cheque.
The next morning the principal of the agency calls me. The offer's too low, I'm told, but will I come to the auction? No! Why not? Why would I want to castrate my own current offer? Won't you offer more now then, he replies? No! Why not? Why would I bid against myself here; this isn't an auction, is it? Okay, he says, but will you come to the auction because the current offer's too low and put in the same bid for the place there? No way! And you've now got 6 hours to get the vendor to accept or reject my current and final offer. Good day sir!
At 5 minutes past 5pm, the agent calls and says the offer has been accepted. He asks as an aside, where do you live? The semi next door to the house you just sold me. What? Oh, you did bloody well keeping that bit of information from me!
Belbo not sure what the point of this post is..
First, its a breach for agents to say there are other bids if thats not true, in QLD for instance they have to tell you formally if there is. Further more if they did say it (which they often do) ummmm who cares obviously the bid wasnt accepted if it did exist as its still on the market and talking to you.
Second, your post has more to do with your skill in negotiating than anything contained in this thread.
Finally, you prove my point the agent prefers auction over a negotiated sale. You mentioned several times that he asked if you were attending the auction, if you had said yes he would have probably left it at that. In short the auction process is preferred because little work on part of the agent is required beyond marketing.
So as eloquent as you always write your posts I dont really get the point of this one...
First, its a breach for agents to say there are other bids if thats not true, in QLD for instance they have to tell you formally if there is. Further more if they did say it (which they often do) ummmm who cares obviously the bid wasnt accepted if it did exist as its still on the market and talking to you.
Second, your post has more to do with your skill in negotiating than anything contained in this thread.
Finally, you prove my point the agent prefers auction over a negotiated sale. You mentioned several times that he asked if you were attending the auction, if you had said yes he would have probably left it at that. In short the auction process is preferred because little work on part of the agent is required beyond marketing.
So as eloquent as you always write your posts I dont really get the point of this one...
You're just not in the know, tcocaro, or didn't you know?
Private treaty offers are a bit like Dutch (or Scottish) auction bids, if you think about it. Your private treaty offer is a bid where you're blind to the level any other bids, if any even exist, but you're always told they do, so you panic, and increase your offer . . . .
Anyway, here's a true story of what happened to me a few years ago.
A house I really, really, really wanted to buy was put up for sale unexpectedly with only a 3-week campaign till the auction day (i.e. half the usual time).
I went to the first inspection and inquired of the young assistant sales agent why the hurry, and he helpfully replied that the owner needed to sell to raise funds to buy for herself at an auction on her dream home coming up in precisely 3 weeks and 1 day. You beauty! I thought.
So, I hurriedly cobbled together finance approval and submitted a pre-auction offer a week before the auction date around 8% lower than I would have been prepared to pay at auction. Naturally, I stipulated the vendor had till 5pm the following day to accept and cash the deposit cheque attached to my offer letter, or tear up the bank cheque.
The next morning the principal of the agency calls me. The offer's too low, I'm told, but will I come to the auction? No! Why not? Why would I want to castrate my own current offer? Won't you offer more now then, he replies? No! Why not? Why would I bid against myself here; this isn't an auction, is it? Okay, he says, but will you come to the auction because the current offer's too low and put in the same bid for the place there? No way! And you've now got 6 hours to get the vendor to accept or reject my current and final offer. Good day sir!
At 5 minutes past 5pm, the agent calls and says the offer has been accepted. He asks as an aside, where do you live? The semi next door to the house you just sold me. What? Oh, you did bloody well keeping that bit of information from me!
Tcocaro, let me explain my admittedly meandering post, and perhaps you'll forgive me.
The first point of the post was simply to say that you weren't being opposed in this thread so much as being antagonised. Your point about the validity of RPdata reports was, after all, not debunked so much simply derrided as irrelevant. I agree with you on RP data's validity, but your antagonist had deftly shifted the goals as to that valid point and you downright abandoned your post in frustration. My first point then was: Get back on post, soldier!
My second point was a reply to MrC, just inviting a bit more discussion on the merits or otherwise of Dutch auctions. As a thinking person, what do you think of them yourself, Tcocaro? My invitation was to all.
My third point, as you comprehensively perceived, was to show what a brilliant negotiator I am. Ha! Not really. It was to illustrate my point that it is we - not REAs - that can have the power to decide the rules of engagement if we are prepared to exercise our right of walking away anytime.
So, Tcocaro, be assured, I am and have always been right behind you in your campaign for arguing from conviction rather than debating to score popularity points. Everything you have said in this thread is valid, IMHO.
Now koshie has said on TV prices are falling, it well could be a self fullfilling prophecy.
http://au.tv.yahoo.com/sunrise/video/-/watch/25310021/property-price-plunge/
We can discuss the numbers as to why prices shouldn't fall all day long, but people are often lemmings and if they see people selling it could be a mad scramble to not be the last one out. Not logical really but that's not to say it won't happen.
Tomorrow he will be telling people which regional areas are the ones who will get a 15-20% fall. You wouldn't wanting to be holding in a town which koshie says will fall by that much. Not saying he will be right, but his words would spook a lot of people. Maybe buy in those places after the dust settles haha.
http://au.tv.yahoo.com/sunrise/video/-/watch/25310021/property-price-plunge/
We can discuss the numbers as to why prices shouldn't fall all day long, but people are often lemmings and if they see people selling it could be a mad scramble to not be the last one out. Not logical really but that's not to say it won't happen.
Tomorrow he will be telling people which regional areas are the ones who will get a 15-20% fall. You wouldn't wanting to be holding in a town which koshie says will fall by that much. Not saying he will be right, but his words would spook a lot of people. Maybe buy in those places after the dust settles haha.
