agents....u gotta chuckle.....

[Sim]

Originally posted by kierank
If you are "willing to pay a premium for the house", then I wouldn't call this figure the REAL VALUE; I would call it YOUR VALUE.

Kieran - this is exactly what drives the property market, especially owner occupiers !! When someone is willing to pay "just that little bit more" to get that perfect house, this drives prices up - even beyond what most people would consider to be good value. That's why property is such a great investment vehicle - because the majority of people are willing to get emotional about it !

I had a chat to a valuer the other day about the psychology of valuing property and the dilema that valuers face - especially in a rising market. When people set new price records for a suburb when buying houses - should the valuer not come to the party just because it is a record price ? As he quite rightly pointed out to me, the people who set record prices 12 months ago in many areas are very very happy right now, since their property has actually increased in value well beyong what they paid.

My point is that there is no such thing as "REAL" value. There is only theory. Value is indeed what people are willing to pay on the day - for WHATEVER reason - and that is a very subjective and volitile measure. So attempting to differentiate between REAL value and YOUR value or MY value or HIS value or HER value is a useless exercise.

 

[Kevin Hockey]

I don't agree Keiran, I think Suggo is right.

How do we value a property, whether we are buyers, owners, valuers or agents. By comparison. When one property sells for a certain price it becomes the yardstick for the next one. The current market boom in Brisbane has been this way now for 2 years. One person is prepared to pay more than the next and on it goes. Prices have soared.

As for claiming agents are responsible for the price, thats out of line and ridiculous. It's so easy to target agents and blame them, make up your minds, on one hand we are blamed for undervaluing to get a quick sale and next we are blamed for overpricing, for god knows what reason, so we can't sell it??.

Today I went to a property and without any opportunity I was told he wamnted 300k. I made it clear to him that the market was highly unlikely to sustain it. I showed him an analysis of sales in his area of similar property which clearly showed
280k MAX. He knows it needs a shitload of work but said he was in no hurry, didn't care how long it took. So when it goes to market whose fault is that......... and is this a once off. If you think that then you should try real estate sales and get a fair dinkum idea of reality.

I am entirely with suggo. As we rid ourselves of more conmen from our industry and Principles focus more on service to get repeat business instead just the sale in front of their nose, and train their staff likewise, we will increase our standing in the community. I have no doubt we are moving forward but there will always be rogues in every walk of life.

Kev

www.nundahrealestate.com.au

 

[kierank]

Sim and Kev,

I was trying to differentiate between REAL VALUE and MY/YOUR VALUE. I see these as two different things. MY/YOUR VALUE can be driven by emotion, etc; I don't think REAL VALUE is.

For example, if a house opposite my invalid mother (like Suggo suggested) goes up for auction and all houses in the street are the same (just to keep it simple) and are all valued at around say $300k. I go crazy at the auction and, because I really want the house (here's the emotion), I put in an opening bid of $500k. Surprise! Surprise!! I get the house.

IMHO, the REAL VALUE is still $300k or thereabouts; MY VALUE is $500k was an emotional one. If the house next door to the one I just bought goes up for auction the following weekend, it is NOT very likely that it would go for $500k just because I bought one the previous weekend for that price... unless there was another idiot with an invalid mother across the road, just like me.

I know the numbers are crazy but I am trying to prove a point.

KieranK

 

[Kevin Hockey]

Hi Keiran,

I accept what you are saying however reality is that a new price (in the price ranges we are quoting) for a property, which is distinctly similar to those around it and recent sales show a particular price range, wouldn't exceed by $200,000. Prices don't normally jump that fast. It is more likely after those sales of 300,000 the next one might go for 320,000 next 330,000 then 350,000 etc.

This happens over time obviously and the rises may be greater (or less) than I illustrate but a $300,000 price would rarely go to $500,000 overnight.

If that did happen, then I would agree with you that the sale was an "out of line" sale. A $2mill home could jump $200k and not be "out of line", it's reflective of the price tag.


Kev

www.nundahrealestate.com.au

 

[Mrs Bird]

KieranK and Kevin,

Six years ago my elderly parents were hounded by a man claiming that he wanted to buy my parents house.

This infuriated my mother as it is their home and it will never be sold. She told him to get off her property and they were not interested by any offers.

A few weeks later, my mother came back from shopping and his mercedes was parked in the drive way. It was the same man again.

To cut a long story short, he offered my parents market price plus $200,000 on top of that!!!!!!!!!

This is a true testimony that it does happen in real life. At that stage it was probably worth $400,000, but now......alot of money

Needless to say my mother was even more infuriated and threatened to call the police if he returned.

Mrs Bird

 

[Kevin Hockey]

Hi Mrs Bird, Hows things.

Firstly - There has to be a reason for that - ie development site, views etc. This then represents actual value to the marketplace

Secondly - someone saying that and actually buying it (and completing the contract without finance probs, cold feet, buyers remorse etc) are 2 entirely different things.

It does happen - but it is rare and if it does, as I said, then it is an "out of line sale". But look at the nos. in sales within your area over any period of time and see how many sell for 66% over "market price". It's not too common.

Kev

www.nundahrealestate.com.au

 

[Kevin Hockey]

Ohh - and parking in the driveway - sure way to piss an owner off.

Kev

www.nundahrealestate.com.au

 

[Mrs Bird]

Hi Kevin,

Of course your right!

Old established suburb in Melbourne
It has river frontage/views

Large deep block. possibility for development although no developer has managed to get pass council and 'militant residents group'.


Mrs Bird.


PS. You are spot on! WE laugh about this for years how my mother was more incensed that he parked his car in HER drive way and she couldnt get in!

 

[brains]

Originally posted by suggo
bbruham,


"To say that they deliberately inflate the asking price is probably correct, I know if I was a vendor I would certainly be trying for the highest price possible for my house....wouldn't you????"

I think the price is inflated by the common practice of
agents "buying a listing".

Which is telling the vendor their house is worth more than it really is to get them excited and sign a contract.
The agent then has the length of the contract to condition the vendor down to a more realistic price.

And as far as criminality goes, there was a post on here a few months back about a Melbourne agent that had actually been taken to court and fined for overstating the price of properties to an unrealistic level. It was post by Asy i think.

 

[asy]

Originally posted by brains

Originally posted by suggo
more realistic price.

And as far as criminality goes, there was a post on here a few months back about a Melbourne agent that had actually been taken to court and fined for overstating the price of properties to an unrealistic level. It was post by Asy i think.

it's HERE

Gee, this topic has got interesting, I had written it off after bbruham insinuated that I was a criminal...

I agree with Kev, there's nothing worse than parking on the property, unless it's over an acre...

It's interesting how the sale price of a property can influence the surrounding properties. As KeiranK said, if someone pays 500k for a house worth 300k, that still makes the neighbours houses worth 300k... But as Sim and Kevin pointed out, that still makes the surounding owners say, HEY! They got 500k, prove to me why I won't? Then they want to list the property at 400k to make sure it wasn't a fluke... Then, even though the agent went in and said, your property is worth around 300k... but OK, if you want to list it at 400k, you are the boss, just remember, I said 300k... but I will give it a go at 400... I can't see how that is the agent being dishonest.

I don't know of any agent who would go into a situation like this and say, hey, that house sold for 500, yours must be worth 500 too... They certainly wouldn't last long in this industry.

Anyhow, enough rambling...

asy

 

[suggo]

Brains

I didnot mean that they inflated the price to get the listing.

I know there are agents out there that try and buy listings and I agree that this is DEAD wrong.

What I meant was that once an agent is chosen then, if I was the vendor I would want to have a crack at that "heart buyer" (I know it is a Jenman term...sorry, but it describes my point), therefore after signing up my agent I would be inclined to aim at the high price for a little bit just to see if someones mother does live across the road! I do believe this is also the best way to get the highest achieveable price for my property, which should be the aim of all good agents!!

 

[Kevin Hockey]

I just watched an owner chuck 30 grand away doing just that - it's more complicated than that.

Kev

www.nundahrealestate.com.au

 

[brains]

Can you elaborate Kev?

 

[Kevin Hockey]

I know you are going to have me for this Brains, damn I opened myself up again.

Just kiddin', THAT waterfront property had an offer after 2 days for 30k more than it eventually sold for. It sold for the amount I appraised it for. The figure we received after 2 days WAS the "Heart Price". The issue with chasing a "Heart Price" is the mentality with chasing it. How do you know when you've got it. It's like shares, how do you know they have hit top price or the bottom to buy or sell??

I did NOT say you shouldn't chase it, I said it was complicated. So many times I have seen an owner disregard a great offer only to sell later when they are under a lot of pressure to do so. In this case the 30 days subject to sale was 24 hours until it finished. They were about to lose their new home.

I distinctly remember selling a property at Flower St Northgate. Same deal, my appraisal was 200-220k, probable price $210k. 2 days - 220k offer prepared to go more. Owner wouldn't even look at it. Sold 3 months later for $210k. I tried everything to get another offer and couldn't. She was pregnant, working full time, 2 boys and a hubby, she really felt the strain of it. I probably remember these 2 the most because the owners involved were both really great people and we got on well so I especially didn't want to let them down.

I do have agents in my area who inflate prices, but rarely deflating them, that's usually just incompetency. But they are the minority. Just recognise them and go elsewhere, most agents won't do it. Good ones definately won't because it's a waste of time. 80% of the agents around me will come in around market value, if the owner wants to try for more, which is usually dependant upon the urgency for them, then they will have a go, but still be clear in showing them why they arrived at their figure.

This is not an easy subject. It has so many variables. If you have a 3 bedroom lowset brick amongst an estate full of the same properties, the chances of achieving the "Heart price" is a lot less than if you have a character home which is highly sought after. If you have a great position instead of a busy road etc.......

It's over to you....pick me to pieces if you must but I'd like to ask this.....the topic of conversation has been about agents overpricing. Now we are saying we should be inclined to go for the high price to see if our miracle might happen. If we are going to do that (agents do it when they sell too) why are we blaming "all" the agents for overpricing when in fact it is us, the owner.

I'm late for my meeting now....****.

Kev

www.nundahrealestate.com.au

 

[brains]

Thanks Kevin, a fair post and i agree with it, but i obviously dont know the RE industry as well as you..

 

[flyfishinginoz]

Interesting

Hi,

I have found this thread very interesting - especially since I am not Australian. My background for buying property is in the US (I'm getting ready to duck now ).

The most common system in the US is to have two agents - one for the seller and one for the buyer - the agents then split the commission - (I think the commission is much higher there than here though). And there are no auctions (unless you count ebay).

However, the property is listed at a certain price and then the two parties negotiate. From my experience as a buyer and seller I always came out feeling like I won (because of the negotiation). The prices offered tended to be the market value. Not dependent on less people showing up at auction because of rain etc...

Also, the offers were always contingent on inspection reports, and if there were major defects, the price could be further negotiated. Depending on the "heart" value (I like that term it describes it perfectly - I like it - I want it). This could be a good thing or a bad thing, again if the facts are there, then it still comes out win-win. What I like most is that then you don't do inspections on properties until you are almost guaranteed to buy them.

I was always happy with the agents who represented me. They helped me make the decisions of not offering a high price, or sometimes upping the offer. Or on the other hand in selling, not to accept an offer because it wasn't enough and then counter the offer.

I'm not saying this way is any better - just different.

I don't know much about the Jenman system, but it seems to follow some of these rules. But maybe doesn't help the buyer as much unless you have a buyer's agent to help.

Anyway, the more you are exposed to, the more you learn.

I'm ducking now.

Cheers,

Michelle