Only five property weekends remaining for 2017

With only five auction weekends remaining for 2017 we are preparing our clients for the pre-Christmas buying conditions.

Unlike previous months we are currently seeing higher levels of stock on the market and we can anticipate some vendor and agent-driven subtle changes that are hallmarks of the approaching Festive Season.

Most vendors facing a late spring/early summer sale are keen to have their sale finalized before Christmas arrives. It is always interesting that this particular day signifies such an important deadline for so many, but over the years I’ve witnessed so many vendors drawing that line in the sand and being determined to have the house sale crossed off the Christmas to-do list. Maybe it’s the fear of a quiet January with limited buyer activity, or perhaps it’s just an emotional drive to face Christmas morning with no more burdens of real estate agents, inspections and perfect house presentation. Whatever it is, vendor motivation becomes quite obvious late in the year.

Adding to this vendor-imposed Christmas deadline are two more issues.

Vendors who sell when stock levels are higher than normal face the potential problem of competing properties. When buyers have multiple choices of properties in their search criteria the chance of ‘losing buyers’ to another sale campaign is a genuine risk. Not only is the prospect of ‘losing’ buyers troubling, but the buyer behavior exhibited when choice is more abundant is less distinctive than when an ideal property without other comparable options is identified. Buyers feel a lesser sense of desperation or fear of missing out and they may echo this sense of comfort when attending auctions or facing negotiations.

The second issue is that of auction scheduling. Given the limited number of remaining weekends, those last couple of weeks of auction schedules can become quite hectic for agents and agencies. Particularly this year, where Christmas falls on the Monday; eliminating the weekend of Sat 23^rd as a viable auction date. Executing contracts when solicitors are closed is not an easy option.

We will see an intensive array of auction times and they will include Sundays and weekday evenings. Buyers may even be forced to decide between two eligible properties due to conflicting auction times.

For those buyers who opt out of property buying as Christmas gets closer and cast their attention to Christmas shopping, the buyer to seller ratio decreases even further and the buyer advantage can become more amplified.

All of these factors transpire to a subtle change in conditions.

Agents will be more likely to encourage suitable pre-auction offers and buyers may find themselves purchasing well.

As agents for the buyers, we are now tracking specific suburbs that are over-represented by specific dwelling types. The micro-glut of oversupply can alleviate some of the tough conditions that purchasers would ordinarily face in a seller’s market like ours.

Being aware of the vendor motivation level is vital for us too. By asking the right questions we can determine which vendors are particularly keen to have a pre-Christmas sale and those who prefer to sell first and then take their time to find their next home in 2018. By simply asking the agents some carefully worded questions, we can glean this information and narrow down those properties that will be likely to offer more favourable buying conditions. Questions to use include:

“Is there a specific settlement date that would appeal to the vendor?”, or 

“Is a 90 day settlement an option for me?”, (it will reveal a lot if the answer is a firm “no”, and

“Is your vendor keen to take the campaign all the way through to auction or would they be keen to field a fair offer prior?” This last question is important to get right. Some agents will respond with “We’ll present all offers to the vendor” but it’s critical to establish that the vendor would actually prefer to sell prior to auction before making any offers, otherwise the purchaser could show their cards and be vulnerable on auction day.

The third and equally most important activity we focus on at this time of year is keeping track of auction results. Every Sunday we go through the results; not only to familiarise ourselves with the prices achieved in various suburbs, but to identify any quality properties that have passed in. A passed-in property can represent a good opportunity for a buyer because the price is declared and transparent and the vendor has faced the disappointment of a four week campaign of inspections and advertising, only to see their property sale fall short of their reserve. Being prepared to move quickly on these opportunities is an important part of our role and makes most Mondays (and plenty of Sundays) an exciting day of the week.

Only last week we proudly secured a two bedroom apartment in a boutique and secure block of just six in one of Brunswick’s prettiest leafy streets. Our dear clients were looking for an investment grade property for their son to reside in while he was studying at Melbourne Uni. Based in South Australia and leaning on us for help, we were thrilled to spot the property in the auction passed-in results and we moved quickly to assist them in the face of what was already a tough time frame. Their son was being vacated from his Uni dorm just one week later and happily we were able to negotiate a license agreement to enable him to take the keys in just seven days. 

A wonderful win/win for all parties.

Sometimes good properties pass in, and the rate of pass-ins often become more frequent into December.

As shops are dressing their windows and supermarkets are stocking legs of ham, agents will be working hard and auction days will be long. For 2017 in Melbourne’s property market, December is promising to be exciting.