By Stephen Aitken

Let’s address a few obvious questions first.

• Why do you want to reveal these secrets?

Because they are not really secrets, simply psychology.

• What makes you an expert?

Nearly 30 years in real estate and I have conducted hundreds of on-site auctions.  and liked doing them, (great for my ego)…biggest one was $13.5 million.

I was good at them (great for my ego).

It made me and my agency look good (great for my ego).

• Do you still do them?

No, some time ago we concluded:

A. Buyers didn’t really like them.

B. Sellers weren’t attaining the buyer/s highest price ( if indeed there was a buyer!)

C. There is a better way.

Ok…Let’s have some fun and buy a home.

There is just one rider…

If your competitor/s have more money and are prepared to use it…YOU LOSE.

1. Ask the agents prior to the auction day if you want to vary the terms of sale should you be the buyer. Maybe a 5% deposit, longer or shorter settlement, very few agents want to lose a genuine bidder (and maybe the buyer).

2. Two days before the auction, decide the ABSOLUTE LAST DOLLAR you are prepared to pay, right up to your ‘walk away price’, that is the price, no matter that another $50 was bid, you would WALK AWAY!- be prepared to really agonise over it.

Never end on a ‘round’ dollar’ amount, better $547,350K than $545K.

3. At the auction, dress and act like an agent, (even down to carrying a clipboard) suit and tie for men and similar professional attire for women. 

Looking like an agent/s puts doubt in your competition minds that not every thing is ‘above board’. Buyers are uptight, nervous and suspicious anyway, many are concerned, so you want competitor/s thinking the legitimacy of the bidding is possibly tainted and diminish their enthusiasm to bid. 

4. Dismiss any agent’s ‘auction helpers’ that may approach you with a polite wave of the hand.

5. IF, the auctioneer tries to engage you in conversation at the start or during the auction, be confident and answer back amiably and light heartedly…again keeps raising doubt. Even better, if you know the auctioneer, speak to him by name, such as “Thanks Wes”, again tends to create doubt.

In Part 2 we will start with the opening bid.

By Stephen Aitken

The classic song by The Rolling Stones, ‘you can’t always get what you want’, is the plaintive cry of many sellers and the edict of buyers in today’s market.

There is a huge amount of chatter about the current state of the real estate market, such as the woeful perfomance of residential house auctions. Read, where are prices heading, why hasn’t my home sold and should I put my home on the market?

Indicators suggest the price ball continues to roll downhill albeit slowly, but without a clear sign of when it may stop.

Anecdotal and empirical evidence by many agents, indicate about a 20% fall in prices from the peak of the market in late 2010 to now, as a ‘wave of the hand’ but reasonable assumption. 

My top 10 comments on the state of play.

1. The Reserve Bank is likely to reduce interest rates. This is not a ringing endorsement of the economy, they do so to alleviate pressure and to stimulate endeavour. Don’t forget about the weight of Europe, USA and ‘cross fingers’ for China.

2. As current home sellers finally realize things will not change in the near future, prices are adjusted downwards to attract buyers, which in turn increases pressure on lowering prices of homes that are coming to the market.

3. If your home is not getting enquiry from buyers, it is overpriced. If it is attracting buyer enquiry but no inspections, it is overpriced and if it is attracting buyers but no offers, it is still overpriced, regardless of friends and family saying THEY wouldn’t sell it under $….(Let them buy it!Also assumes your agent is competent!)

4. Less buyers, more homes unsold and more coming onto the market, allows buyers (who these days have an unfettered amount of information available to them) to be very choosy and feel they have the power.

5. Buying and selling in the same market equates to equilibrium, although read 6.

6. Trading up in a retreating market is perfect as the price ‘gap’ is improved. If you have been in your home for many years, you will have probably made a considerable profit.

7. If you are selling then renting and putting your money in the bank…good for you and probably pretty smart, but it doesn’t help  fellow sellers or your beloved real estate agent!

8. There is wide agreement home affordability remains too high and the Reserve Bank is likely to have a finger hovering  over the increase interest rate button if prices suddenly take off. (No it’s NOT going to happen.)

9. Having real estate agents tax you. Err, I mean charge you for advertising that is ineffective so as to profile their agency under the guise of finding the buyer is usually as effective as buying a tatt’s ticket.

10. The circle of life in real estate continues unabated. People get old and move. Young people buy their first home. People trade up and down. People die, get divorced, change their lifestyle, move overseas or interstate and return. People win money and lose it. Investors are a constant. In other words, life continues on and there will always be buyers and sellers, just at different prices.

What to do? What to do?

Unless you have the gift of knowing the future, then…

If you have a reason to sell your home at the moment, go for it! Your mantra should be sooner rather than later, as your likely to recieve less later.

Home ownership is as much about emotional comfort as it is finacial security, so buy and live in a home you love, in an area you want to be, for the reasons you want to be there, life is fragile and short, enjoy it in your own slice of heaven!

So….sell your home…but…

If your home has been on the market for a while and believe you have a good agent….REDUCE THE PRICE!!

If your home has been on the market for a while and believe you DON’T have a good  agent….CHANGE THE AGENT!!

If you are about to sell, GET an excellent agent who can negotiate and prove it! One who has credibility, you feel TRUST and communicates with you regardless of whether you like the feedback. NOT…a hack or an order-taker.

CHOOSE your agent on their qualities and value, not on the price they quote and the fees they charge. Remember price is what you pay, value is what you get.

For how long will the bugle of retreat sound? Who knows, but the money men believe some years……then flat for some years…..only hindsight will tell.

Why put your life on hold because the price of a house changes?

By Stephen Aitken

Enzo Raimondo, CEO of the Real Estate Institute of Victoria commented in his quaintly named column ‘Home Truths’ in Herald Sun, on Saturday 5th May on pre-auction offers, headed Make your Play Early.

“The proportion of homes sold before auction has fallen from about 23 per cent to 18 percent.”

There are simple explanations.

Buyers understand, if you wait until the day of auction they are likely to buy cheaper than what they might have offered!

Real estate agents really want to use ALL the advertising money allocated, and unless the offer is truly exceptional, the agent will want the auction to run its full distance as it helps their profile and with a bit of luck there will be a ‘show’ on the day.

Even if the offer is not exceptional the other benefit for the agent and vendor is it declares the buyers ‘price-hand’. Even if the auction fails in competition, the likely result will be it is passed in on a ‘vendor’s bid’ at the very least a little above the pre-auction offer to allow some negotiation.

“A successful offer can allow you and the vendor to avoid the auction”

In the terms of modern communication..Bwahahahha!

AGENTS WANT the process to go the distance, it ensures profile for the agency and further opportunities to ‘smoke out’ prospective vendors.

So what should you do if you really like a home that is being auctioned.

Declare your interest (not price!) to the salesperson and indicate if the vendors were entertaining the idea of selling prior, ensure you are contacted.

Keep in regular contact with the salesperson, you will be surprised what some will tell you if you are friendly!

Herald Sun reporters Wes Hosking & Nicola Webber commented in their article on Saturday the 17th of September..”Desperate real estate agents are cold-calling people pleading for them to spruik auctions to friends and family.”..”agents are also using jazz bands, coffee carts, and champagne to lure nervous buyers…”

It’s hard not to stifle a laugh. As nearly half the auctions pass in, real estate companies would be better served in training their sales teams in excellent customer service and offer candid credible martket information that isn’t 3 months old.

Statistically, buyers dislike auctions. Therefore why promote auctions?

By using vendor’s advertising (read $$), real estate companies can enjoy higher market profile with the added bonus salespeople will condition sellers.

There are much better methods in selling a home with little or no risk to the vendors, which I will expand upon in the next post.

Stephen Aitken