Ian James | 12 November 2012

Unrealistic vendor hopes the single biggest problem in Melbourne real estate market: Ian James

Unrealistic vendor hopes the single biggest problem in Melbourne real estate market: Ian James

The year 2012 is moving into the rear view mirror.

With only five auction weekends to go this year, the necessity for good negotiation becomes paramount. With another 69% clearance rate from 733 auctions that were listed by the REIV and over 3,000 auctions listed for the next three weekends, vendors and purchasers will be frantic to do deals.

If clearance rates continue around 60% then in the next three weeks 40% of 3,000 properties will still be sitting on the market in the run-up to Christmas. Some 1,200 vendors will want to have their properties sold before relaxing through the Christmas hiatus. And it is up to the selling agents to assist the vendors to make this happen.

But too many agents are still massively overquoting vendors then low-quoting to prospective purchasers. It is not too difficult for professional buying agents to work out property values and have a very good idea where the auction will finish up. It really doesn’t matter to us where the agent quotes because we can use comparable sales data to get a very good idea of where the bidding will end up. We have heard from some selling agents that reserves should be published prior to auction. This is all well and good if they are accurate to what the final outcome of the auction will be. We have heard from plenty of selling agents who say that low quoting is necessary to bring plenty of people to the auction. But this usually annoys the inexperienced or those who are not getting professional counsel from a buying agent.

Neither of these situations is of any real issue if the vendor is selling at a realistic price. The single biggest problem in the Melbourne Real estate market is when agents let vendors dictate reserve. I know the vendor has the right to sell at whatever price they want and I know they can withdraw the property from market if they wish, but when prospective purchasers expend money on legal, building and pest inspections when the vendor wants 10% over market value and the selling agent does not advertise this, it is grossly unfair.

 

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