Not talking to real estate agents? Here’s why you should
Property punters are being spoilt by choice as listings ramp up for Melbourne’s peak spring selling season. But there’s a catch for house-hunters – unless they are talking to real estate agents and give some indication of their property needs and desires, they’re almost certain to miss out on the best buys.
These days, many buyers think they know the likely selling price of properties by looking at comparable sales data, but they can’t gauge the depth of competition for specific houses and apartments and other market nuances unless they communicate with agents. Nelson Alexander agents can also put you in touch with new listings, off-market deals, emerging good-buying locations and assist you to win at auctions.
Historically, there has been an arms’ length relationship between would-be buyers and agents.
Experienced buyers know very well that the real estate agent represents the interests of the vendor in the sales process. Added to this, many agents – at least until the Victorian Government in May made it mandatory for agents to provide price quotes for listed properties – marketed properties under the banners of “POA” (Price on Application) or “NPD” (No Price Description).
The use of POA and NPD has rightly been seen by buyers as a ploy to get them to call up the agent to find out the price expectations for homes.
Nelson Alexander has for many years operated differently. For decades, the company has freely provided a fixed price range with a lower and upper quote price, for its listings.
In May, Consumer Affairs Victoria (CAV) introduces new laws requiring all agents to provide quotes for properties they list.
A key plank of CAV’s reforms is that agents must provide prospective buyers with the details of three recent comparable sales of similar properties in a statement of information that accompanies each listing. This can typically be accessed online.
Nelson Alexander Sales Director Arch Staver says in the current climate it’s critical that buyers look beyond the statement of information and communicate with selling agents so they can get an insight into the true state of play in the market.
“There has never been so much information around price available to buyers,” he says. “People are using the statement of information in their negotiations and are possibly becoming less emotional and a little more relaxed about the buying process.
“But by not talking to the agent, buyers are really missing an opportunity.”
Mr Staver says the market frequently sees multiple buyers target on one particular property and bid up its price. At the same time other comparable properties that may be just around the corner, will attract scant interest.
The trend to divergent auction results means that one highly-coveted property will sell for 25 per cent above its reserve price, while a similar house or apartment can be scooped up by an astute buyer for a price at the lower end, or even below, the published quote range.
“There is no way of conveying that important market information to buyers unless they communicate with us,” Mr Staver says.
“For example, buyers will look at a quote of $2 million to $2.2 million. They will interpret that range as an owner’s expectations of $2.3 million to $2.4 million and they might miss an opportunity to buy that property for $1.95 million or $2 million simply by being in the right place at the right time.
“With Victoria’s new quoting laws, speaking to your agent is more important than ever. You want to have a relationship with your agent. Our real estate agents maintain professional and respectful relationships with buyers and they can give you the factual information you require.
“But they can also give you an insight into the mood of each marketing campaign.
“The vibe of each property does differ and I can tell you which of my auctions are going to do very well. I can also tell you which of my auctions aren’t going to do well.
“The fact that some properties don’t do well as others isn’t because they are not good houses. It is because the market has made a decision to fight for one property.
“As a result, we are seeing people coming along to the open for inspections. They are not engaging with us and yet we have a vendor who is very willing to sell at a price that represents great value for money.”
If you would like to discuss your property requirements in greater detail, please contact your nearest Nelson Alexander office.