HOW MUCH IS THAT WATCH?

You’re shopping for a new watch with a strict $500 budget. Despite your better intuition, you stroll into an expensive boutique filled with high-end luxuries. There is an alluring glass case in front of you and within it sits a beautiful timepiece that you simple must have.


Your retail dreams evaporate, however, when you notice the $30,000 price tag. But wait! There is another watch of the same brand for only $1,500! You instantly draw the credit card and make the purchase satisfied you scored a bargain.

Clever retailers have used this strategy for years; include some exorbitantly-priced items in your store to make others look better value. And many vendors in today’s real estate market are inadvertently doing the same thing. Overpricing a property not only severely hinders its sale, but it also helps competing properties to sell. Buyers see the overpriced property as proof that the lower-priced property offers great value for money and then feel confident purchasing it. The vendor of the overpriced property not only misses out on the sale but also helps to remove a buyer from the market.

As charitable as it might sound, no vendor would willingly help other sellers to achieve a sale at the expense of their own. This is why our recommendation to vendors in this situation is to withdraw the property from the market, rent the property or realign the price according to current market expectations.

It may sound a little harsh, but this is a reality of the current market where many buyers are lacking urgency and will quickly walk away from a property that doesn’t offer good value.

PLAYING NICE IS BETTER

You’re in a room of pre-schoolers and two energetic children are in the middle of an almighty tug-of-war with a worried-looking teddy bear at the centre. Over the shouts of “Mine!” you hear an unmistakable ripping sound and teddy’s fate is sealed (or is that unsealed?).

Now, nobody gets to play.

Although sharing is a lesson most of us learn at a young age, within many real estate offices around Perth, this important lesson has been largely forgotten. And in this case, the “toys” are the buyers.

At Caporn Young, we have an open database policy which means that our comprehensive buyer database is shared amongst our entire sales team. When we list a property to sell, we can easily power-up the database and search for potential buyers. Then, we contact the best buyers to tell them about the property, even ones that may not be specifically looking in the area.

In other agencies, individual agents are very protective over their buyers and are reluctant to share them with others. This, in my mind, is very short-sighted and does not consider the interests of the seller.

Our goal is always to get the best possible outcome for our sellers and in order for this to occur we need to introduce as many qualified buyers as possible. Buyers who register with us also benefit as they often get to inspect quality properties before the general market does. I think it was Covey who coined the term ‘Win Win’!

With 1,829 hot buyers currently in our database (changing daily), you can easily see why sharing and team work is the best policy.

HAVE WE REACHED IT?

There is a funny thing about bottoms…. They are notoriously difficult to recognise.

I am talking, of course, about the cycles of the real estate market and the difficulty in knowing precisely when the market has bottomed out. Generally, it’s only when the market reaches a solid growth phase that you can look back at the data and recognise where the bottom has occurred.

Now, I am not suggesting we have reached the bottom of the current cycle, but I can say that at Caporn Young we’re seeing some very encouraging signs.

According to recent figures released by REIWA, the number of properties listed for sale in Perth has dropped to around the 15,500 mark. This is significant given that for most of the year the level has been above 17,000 peaking at 18,200 during April.

It’s also reassuring to hear that talk about short term interest rises seems to be fading with some commentators even predicting the RBA may reduce official interest rates.

And locally, we’re seeing a greater number of under offer and sold stickers across our core suburbs (many of them our own), evidence that correctly-priced property is definitely selling in reasonable time-frames.

Whether or not we have reached the bottom of the market or are close to it, buyers should be relatively confident about the future performance of their purchase. And, with spring arriving and current stock levels reducing, sellers who are willing to meet the market can hopefully expect improved competition amongst buyers and an increased likelihood of achieving a sale.

MORE THAN 60 PEOPLE ATTENDED

Another week has passed and we’ve seen further proof that auctions are getting results in the current market.

Over the last 7 days, we have sold numerous properties that have recently completed their auction campaigns, in Cottesloe, Fremantle and Bicton.

One of the highlights was an architectural masterpiece in Fremantle. Located a short stroll from restaurants and cafes and with a first-class entertaining area, this impressive home is as liveable as it is impressive. And with more than 60 people attending the auction, clearly the appeal was universal.

Despite there being 4 strong bidders on auction day, the property was passed in at $1.52 million. However, after post-auction negotiations with the highest bidder, a sale was agreed in excess of this figure.

The statistics regarding Caporn Young auctions are definitely mounting up. Caporn Young has sold 19 of the last 20 properties we have taken to auction – either before auction day, under the hammer or after the auction. Considering the general oversupply of private treaty properties sitting idly on the market, it’s apparent why many motivated vendors are choosing to go to auction.

If conducted by a skilled agent, the auction process will deliver buyers to the property and put those buyers in competition at a given time, flipping the current buyer’s market into a seller’s market. Sellers can then make a simple, informed decision whether or not to sell with the knowledge that the maximum price has been reached in the current market.

Consideration has to be given to the terms of an auction to give buyers maximum flexibility so as not to rule out any buyers.