Originally posted by karsal
Hi Boys and Girls.
One factor that no one has mentioned and has been witnessed @ our Auctions are Buyer's Advocates.
Amazing how they get paid regardless of the price.
Their job appears to be to buy the property at all costs, and we are stunned by the way they come in at the end and keep pushing up the price.
This happened last year at a block of flats in Elwood when three weeks after an auction, the same advocate was back with a different client and paid an extra $40k for an identical property.
Anyway, they can be instructed to buy at all costs as the buyer may well be an owner occ and is prepared to pay a premium.
Best advice is to just walk away and look for another.
If negotiating a private treaty, put the offer in writing and set a time limit for acceptance/ refusal. If someone else is also vying for the property, then offer your walk away price. If beaten, big deal.
Cheers,
Sam.
G'day Sam
I'm intrigued by your comments in this post. What makes you think that buyers advocates get paid 'regardless of price'?
From your various posts, I gather you work in the real estate industry.
I hold the full Victorian Estate Agent's Licence and have worked as a buyer's agent - advocate if you prefer.
All my clients were extremely price specific. That is why they had engaged me to act on their behalf. They were not interested in 'funny business' and I had strict instructions to walk away when that price was reached, be it at auction or by private treaty.
For any agent, the interests of their principal, whether vendor or purchaser are paramount. However, an authority to act is delegated by the principal. The agent cannot act outside that authority.
But to get back to the original theme of this thread ...
As a developer, I am very interested in the demographics of 'who buys renovations'.
I decide before buying the original property who will be the target market. My target for the property currently nearing completion is the 50 year old cashed up divorced woman who has kept the family sized fridge and washing machine.
To suit her, I have installed a drying cabinet, ironing board cupboard, french doors, walk in pantry, ceiling rose with matching cornice in the main bedroom, fully landscaped 'edible' courtyard garden, 'leafbuster' gutter guard etc
To make a living doing renovations, I have learnt that the finished property must be capable of being sold at least 50% above the purchase price. This is based on
Purchase price 100%
Stamp Duty 5%
Legals, Bank fees 2%
Selling Fees 3%
Renovation Costs Materials 10%
Labour 10%
Plans, Permits 1%
Interest 5%
GST on margin 4% (this represents 1/11th of margin contract to contract less rebate of GST paid on materials and labour etc - not strictly accurate but close enough)
Which allows me a pre tax working margin of 10%, which is really a bare minimum.
So it is important to be sure of the target market before buying and certainly before starting work. 10% is a slim, unforgiving margin.
And as for people who are prepared to pay silly prices for demolition jobs - if you are making frequent offers then you won't even notice the 'one that got away'!
Cheers
Kristine
ps If anyone is looking for a good buyer's agent in Melbourne(and no, I don't mean me!) you are welcome to email me. The gentleman I recommend and previously worked for bought, renovated and sold 24 houses in 24 months when we was in that line of business prior to going into real estate, nearly 30 years ago. He also lectures in the licensing course, and what he doesn't know about houses and property isn't worth knowing.
Plus, he was never rude to anyone in his life, and is a joy to do business with!
