Is the property on the market?

We attended an auction recently where a bid was made at the high end of the advertised Statement of Information (SOI) range, and the bidder asked: “Is the property on the market?”. The agent replied, “we will let you know when it is”.  

The reply caused a minor crowd disturbance, but the agent was within their legal rights to reply in this way even though the last bid was at the hight end of the SOI. 

The Statement of Information must include:

  • An indicative selling price for each property, based on recent comparable sales. 
  • An indicative selling price for the property which may be a single price or a price range of up to 10 per cent. 
  • It must not be less than the agents estimated selling price OR
  • Not less than a price in a written offer that has already been rejected by the seller.

However, the seller may choose to set their reserve price on the day of the auction. The reserve price decided on the day may be above the advertised price. The reserve can be whatever the vendor chooses on the morning of the auction — regardless of the indicative price range. In a competitive auction market, vendors can set reserves higher than the advertised price guide and sometimes this can come as a surprise even to the selling agent.

That reserve prices are exceeding advertised price ranges also highlights why the property market is increasingly difficult for inexperienced buyers on a budget to navigate. For example, a house may be advertised with a price guide of $800,000 to $880,000. But on the day of the auction, the reserve price may be more than $900,000.

How does this happen? 

Because the seller, not the agent entirely decides the reserve price, a spokesman for Consumer Affairs Victoria said. “The reserve can be set as late as auction day and may be influenced by the level of interest in their property,” he said. 

Call us at ela Property Advocates to discuss all of your options for selling or buying property and the necessary strategy to succeed in today’s complex market.

Guy Angwin: guyjohn@iinet.net.au, 0412 022 998 or Geoff Briscoe: geoffbriscoe@tpg.com.au, 0419 740 351.

Electronic contracts and signatures are taking over.

Is it legal to use electronic signatures?

In short, yes, they are legal to use; however, they aren’t always accepted or in some instances, binding. Officially electronic signatures are valid and legally binding with Australia passing the Electronic Transactions Act in 2000. The general rule has been established that no transaction will be invalid simply because it was completed electronically.

Unfortunately, there is not a one size fits all approach to electronic signatures, with some legal documents having additional requirements such as being notarized or witnessed which can add complexities to the process – though these are not insurmountable. Some documents will also have a requirement that the signatures be handwritten; therefore, only a handwritten signature will make the agreement binding.

Consent – In the contract, unconditional permission to electronically sign is a pre-requisite. Parties to the contract should also agree that using electronic signatures for the agreement is acceptable before signing.

If you want to know more always seek legal advice and you can also read about it here in section 10 (signatures) of the Electronic Transactions Act

So, in summary, we see more and more agencies using electronic contracts and signatures. They are legal, but consent is required and please discuss this with your conveyancer or solicitor. 

Call us at ela Property Advocates to discuss all of your options for selling or buying a property in today’s market. Guy Angwin: guyjohn@iinet.net.au, 0412 022 998 or Geoff Briscoe: geoffbriscoe@tpg.com.au, 0419 740 351.

Dorma windows can bring your loft to life.

In our property journey, we often come across Californian Bungalows where hipped or gabled dormer windows have been added to increase habitable space. 

Loft conversions have long been popular, brought about by the addition of dormer windows. These days you don’t have to be content with awkward sloping ceilings and small roof windows or skylights. Choosing a dormer window instead adds style and character to your home, as well as increasing the headroom and maximising the useable floor area. If constructed in a sympathetic way to compliment the house and the street presence, dormer windows add value. 

However, for loft conversions to be practical, you must ensure you have adequate floor to ceiling height. If buyers feel cramped, you may not get back the money you have spent on the renovation. 

What is a dormer window?

A dormer is a vertical window, with a roof of its own, which sticks up from the slope of a pitched roof. It’s a significant improvement over a skylight because it offers views to the outdoors, just like a ‘normal’ window and creates a greater sense of space. Similar to skylights, dormer windows are a source of light and ventilation roof or loft spaces, but unlike skylights, they also provide the opportunity to increase the amount of headroom and allow for more usable space.

Heres some examples but the important consideration is to choose one that is aesthetically pleasing, in the right proportions and complementing the architectural style. 

  • Flat roof dormer. Possibly the cheapest to build and often creates the most additional internal space.
  • Shed dormer. Similar to a flat roof dormer, a shed dormer features a single-planed roof that slopes downwards at an angle. 
  • Gable dormer. The gable dormer has a simple pitched roof. Considered a more traditional and attractive option than the flat roof dormer, it’s a popular choice for period homes.
  • Hipped dormer. A hipped or hip roof dormer has three sloping planes, the same as a full-size hipped roof, where they are typically installed as a matching feature.
  • Eyebrow dormer. An eyebrow dormer is unique in having no sides; this traditional style is beautiful on the right property.

In summary loft conversions with the appropriate dormer window(s) will add value to your property; however, a loft addition that has inadequate floor to ceiling height may stop potential buyers from competing for your property.

Call us at ela Property Advocates to discuss your options for selling or buying a property. Guy Angwin: guyjohn@iinet.net.au, 0412 022 998 or Geoff Briscoe: geoffbriscoe@tpg.com.au, 0419 740 351.

What marketing should I agree to as a vendor?

As part of the property sale process, agents pitching for your business will present you with a marketing proposal. 

Having the right marketing is an essential part of a successful sale campaign and unavoidable. Like most things today, you will need to advertise to be seen, and in addition to marketing, there are other costs that the agency will need to recoup from you.

It’s a misconception that the agency will bear the cost of marketing to secure a sale commission – the expense is the vendor’s responsibility.

There are other legitimate costs too, but be aware that legislation covering the real estate industry only allows for recoupment of all marketing and sundry additional expenses. The agency cannot add a margin.

How do I know where to advertise?

Assuming you chose a local agent, they know what will work best given their locality expertise. 

A typical marketing plan, all at your cost as the vendor will include:

  • Internet advertising – by far the most effective and the internet cost will absorb most of the budget.
  • Print media in some cases
  • 360-degree virtual tour movie inside and outside 
  • Photography
  • An auction board, sometimes fitted with solar-powered lighting
  • Handout brochures for Open for Inspections 
  • Copywriter fees 
  • Artwork and production 

Internet Advertising

Your agency will select what has worked best in the past, but by market share, make sure it includes these first two in addition to your agency’s site:

  • realestate.com.au and domain.com.au 
  • Your selected agency’s site. The agency will always include your property in their own branded web site. 
  • If the agency suggests other internet sites, ask the questions – what’s the reasoning behind the selection and the cost?

How much should I spend?

Typically, a well-constructed campaign will cost you as much as $8,000 for a property exceeding $1 million. As you would expect, the more expensive the property, the higher the marketing expense particularly when print media comes into play. Payment can be deferred until the property settlement for an additional small fee.

As vendor advocates, we advise you on agent selection the right campaign for your property, the cost and the method of saleCall us at ela Property Advocates to discuss your options for selling or buying a property. Guy Angwin: guyjohn@iinet.net.au, 0412 022 998 or Geoff Briscoe: geoffbriscoe@tpg.com.au, 0419 740 351.

This year’s Spring may start in February 2021?

The Spring season has historically been a high volume selling period for Inner Melbourne. However, this year due to Covid-19, the spring market only opened on October 19th. And now we see a significant shortage of stock as vendors were unable to hire tradespeople from doing any listing preparation work and real estate agencies were closed.

Our opinion is what might have listed this Spring, will now move to February/March 2021 as:

  • Stock levels may improve as vendors will gain some confidence from sales made this quarter.
  • There will be time to prepare stock for February 2021 unlike Spring this year
  • Interest rates have continued to fall 
  • All indications are the economy will continue its recovery as we learn to manage with Covid-19

Families will be looking too. After an extensive lockdown period, families have been spending more time together than ever before. The functionality and floorplan layout may have come under pressure during close living conditions. 

As a result, families about to enter the market might be searching for:

  • More space
  • Improved functionality 
  • Renovated interiors or renovation projects 
  • Proximity to schools, shops, medical and public transport 
  • Parklands and exercise areas 

All of these factors indicate This year’s Spring may start in February 2021Call us at ela Property Advocates to discuss your options for buying or selling in 2021. Guy Angwin: guyjohn@iinet.net.au, 0412 022 998 or Geoff Briscoe: geoffbriscoe@tpg.com.au, 0419 740 351.

Auctions are different, but property fundamentals remain the same.

The selling environment in Melbourne has been through some dramatic changes. We had a period of no auctions, and then online auctions only, a new concept for many agents.

Last weekend we transitioned to 10 only attendees plus agency staff, and perhaps soon we will return to the full open unlimited auction experience. Despite the disruption, the market has still functioned, but vendors are still wary, and stocks of quality houses low. 

What we observed with the opening of the auction market was a potent reminder of the fundamentals. 

One auction we attended attracted just one bidder and one other onlooker despite healthy market demand.

Why? 

The fundamentals of the property weren’t quite right. The property was promoted as a sizeable five-bedroom family home, but the layout was not functional, the pool dominated the back yard, and there were no green lawn areas for children.

The gally kitchen position was separated from the family and living zones, and overall, the market assessed it as a C grade property. The market functioned efficiently, and the property attracted little interest.

The reminder to buyers and us again is that C Grade properties will always struggle in nearly all market conditions. 

However, at the other end of the scale, the demand for A-Grade properties is healthy. Stock is short and will remain so. Auction competition is active with multiple bidders, and in our view, this will continue for the foreseeable future for A-Grade properties. (See our story: https://elapropertyadvocates.com/2020/04/27/buy-when-the-right-house-comes-along-dont-wait/)

And to our readers, here’s a reminder of what constitutes an “A Grade” property in inner Melbourne.

  • The land content is consistent with the precinct and the property not overcapitalised.
  • The location is away from main roads or busy streets and preferably in quiet and pleasant streetscapes. 
  • The property is ideally walking distance to shops, medical facilities, open spaces, school and transport. 
  • The building itself. Scarcity, for example, period homes, the build quality, orientation on the block and a functional floorplan. 

As buyers advocates, we work for you to assess properties you may be considering now. Is the property your looking at an A – B – or C grade property? We also source properties if required, and negotiate on your behalf. 

Call us at ela Property Advocates. Guy Angwin: guyjohn@iinet.net.au 0412 022 998 or Geoff Briscoe: geoffbriscoe@tpg.com.au, 0419740351.

Do you have an Auction strategy for today’s environment? We do.

The great real estate news for the week is the re-opening of public auctions. Up to ten people can attend a residential auction plus the agency staff conducting the auction. This announcement follows the earlier news that inspections could take place with one agent employee and one interested party. 

Ten might sound a small number for an auction, but there would rarely be that many people bidding on one property. The agency team will sort out pretty quickly who can attend after pre-qualifying genuine purchasers. The new norm is a smaller, qualified crowd and more likely that those you see at the auction have a genuine interest. 

This news is great for vendors and purchasers, many of whom have been in a holding pattern for 2020. Agents are also excited about on-site auctions as they are transparent and unconditional.  

To be successful at auction, you will need multiple strategies, and that’s where we come in. 

  • Auctions today will be different – those attending are probably genuine buyers. What is your bidding strategy with a smaller group?
  • Not every auction or property is going to be the same. Do you have and A B and C strategy ready? 
  • What’s your strategy if there are no bidders or multiple bidders?
  • What is the best time for you to start your bidding?  
  • If an auction is a pass in, how will you negotiate?
  • Do you negotiate inside or outside?

Call us at ela Property Advocates to talk about your game plan and how we can help you search, assess and enhance your auction outcomes. 

Guy Angwin: guyjohn@iinet.net.au 0412 022 998 or Geoff Briscoe: geoffbriscoe@tpg.com.au, 0419740351.

The Emotional or Financial purchase

During your property journey, there may come a time when you consider a particular property because it satisfies an emotional need rather than a financial need.

An Emotional Property purchase may be:

  • Apartment
  • Holiday house
  • Farm
  • Townhouse
  • Snow chalet
  • Flat
  • House and land package

Financial Property purchase may be:

  • Period home on 700 sqm of land
  • A property where the depreciated value of the house is less than 40% of the total purchase price
  • The property located within 10 minutes walk of a train station, shops and parklands
  • Historically the capital growth of the property has outperformed the market
  • Ideally, the property has a northerly orientation to the rear
  • Has off-street parking for at least one car
  • Located in an inner-city suburb 
  • Strong residential street with limited or no commercial or high-density residential developments
  • When you bought the property, there were other interested buyers

There will come a time in your life when buying a property is about satisfying more of your emotional needs than financial needs – it’s just unavoidable. 

Some examples of emotional purchases that may occur in your lifetime:

  • A country person looking for a Melbourne apartment 
  • An overseas buyer who needs to satisfy immigration requirements and can only purchase a newly constructed home or apartment 
  • A health care worker who needs an apartment very close to their work so they can be on call 
  • Retirees who may have a place in the country yet still like to come to the city regularly, and doesn’t want a property that requires regular maintenance
  • A family buyer who wants a low maintenance property with floor plan flexibility and convenience that only comes from a new build
  • A retired person or couple that doesn’t have the physical capacity to maintain a large family home with a garden

At some stage in your life, you will have to make an emotional property purchase. However, you can still give yourself every opportunity to improve the potential for capital growth by trying to include as many of the following as you can.

Apartments:

  • Does the property have a view?
  • Is it close to trains, parks, schools, medical, shops and cafes?
  • The layout – study the floor plan carefully – does it work – does it have floorplan flexibility?
  • What are your neighbours like – can the great view be built out? 
  • Your neighbours – are they owner-occupiers or are they transient?
  • Parking – do you have on-site parking and how easy is the access, and not everyone loves car stackers  
  • Does your apartment have a pool and gym – what cost is that going to add to OC fees? 
  • High ceilings are super important.
  • A smaller block of apartments tends to hold their value better.
  • Is the orientation, light and how is your privacy?
  • Storage locker/cage. 
  • Noise – is this a quiet apartment block or a “party tower.”?
  • Owner Corporation Fees – have you budgeted for them?

Beach House/Farmlet:

  • Is your beach house within an hour and a half drive of the CBD?
  • What are your neighbours like?
  • How far from the beach are you?
  • Where are the nearest shops?
  • Where is the nearest doctor and hospital?
  • Does the property have a view?
  • Can any adjoining developments impact your property?
  • Would your property appeal as a rental?
  • Are there any immediate or ongoing maintenance issues?

Managing your emotional/financial needs when buying a property is very complicated. If you would like to discuss your property journey, please don’t hesitate to contact us at ela Property Advocates.

Guy Angwin guyjohn@iinet.net.au 0412 022 998 or GeoffBriscoe geoffbriscoe@tpg.com.au, 0419740351.

A flexible approach could help vendors get a better result

As the market re-opens, agents and vendors will use a variety of sales methods. Is the classic process of listing, marketing campaign, then zoom auction going to be the best strategy for vendors to sell their property after the recent COVID 19 shutdown?

Vendors will need a flexible approach to achieve the best outcome, and not one sales process alone is going to work. 

What selling options will agents recommend? 

  • Some agents will recommend a quote range for a private sale
  • Others may recommend a fixed price 
  • Expressions of Interest (EOI) with a closing date have been popular during the lockdown
  • Zoom online auctions have also worked 

All options will have a place in the market for now. Our view is that a skilful agent who can think on their feet and align with not one but many strategies is the right selection. 

Careful agent selection is vital, and if you’re not sure how to select the right agent with a flexible approach, that’s where we come in. 

  • Do you choose a large agency group or a local boutique agency?
  • Within agencies there are great agents – we help you select both.
  • Listing agents will have a partner; does that partner compliment the listing agent’s weaknesses?
  • Which agent has a track record of selling this type of property in this price range in your precinct?
  • What current buyers do they have that could match your property.
  • Are they skilled online auctioneers? 

In addition to agent selection, ela Property Advocates negotiates commission, reviews the marketing and recommends the sale type, e.g., auction, EOI or private sale. 

Email or call us at ela Property Advocates, Guy Angwin guyjohn@iinet.net.au 0412 022 998 or Geoff Briscoe geoffbriscoe@tpg.com.au, 0419740351.