Million Dollar Melbourne

It\'s 6.00 pm Saturday and the James $m+ Clearance Rate on the on the 23 $m+ properties we attended today, was a strong 78 per cent.

HATS OFF to Torsten Kasper, Managing Director of Chisholm and Gamon who said their quoting policy now, was that their reserve was within their quoted range unless a last minute vendor hiccup. I suppose we could handle one vendor hiccup in 20 or so. Let us know if you as buyers are finding this to be the case. We congratulate Torsten on this transparency and we encourage buyers and sellers to support this Elwood and Port Melbourne company as long as this remains their stated policy and is proven to be the case.

Bayside Summary: Just another quiet week (not) in Brighton with 13 reported sales over $1m. Big increase in Bidderman at auction: 2.6

Boroondara Summary: 33 houses reported for sale today under $1.8m and 2 passed in. Balwyn was interesting today with 9 reported auctions and 4 pass-ins but drill down on the stats a bit more and you see anything under $2m sold and everything over $2m passed in. Drill down again and those pass-ins were all double storey new homes that have been so successful this year with the Chinese community. Chinese people (the catalyst for our improving market, so thank you) have (a) gone back for the summer break and (b) are being affected by the dollar and nothing states this so succinctly as the above observation.

Stonnington Summary: Strong day, seven out of seven auctions we attended sold.

Buying a Home Before Christmas

This 2009 run into Christmas is seeing an above average amount of activity and in the estate agency business activity breeds even more activity.

Everybody in late 2009 is coming out of the financial closet and admitting things aren\'t actually as bad as they thought they would be. We are seeing buyers and sellers taking what is now in their mind acceptable risks - having two homes (buy first) or no homes (sell first) in their move from one home to another. The market is very healthy - good turnover - good prices and good Bidderman.

A focus for our clients at the moment is off market - I personally have looked at more off market homes this last fortnight than in the last two months. There are a number of February sellers who have committed to agents and those agents are testing to see if a buyer may well pop up before Xmas.

So how do you buy in the next 2-3 weeks, and more importantly how do you buy well.

Firstly you need to see the home and that maybe slightly harder than normal as many agents still have a lot of homes currently on the market to service - next week December 12th is Jellis Craig\'s biggest auction day - ever - not biggest December auction day - not biggest this year - biggest day ever.

If you can see a \"quietly listed\"  home and you like it, then in this market the tricky pre Christmas questions are

1. Is it really for sale now or


2. Is the agent trying to secure the listing or


3. Is the owner just curious or


4. Is it really for sale right now

So a couple of simple questions to the agent

1. Mr Agent do you have a signed authority to sell this property?


2. Mr Agent does the vendor wish to sell before Xmas?


3. Do you have contracts and Section 32\'s ready?


4. Do you have a specific asking price?

The answers you get will determine the next step and even if some of the answers are no they still may mean yes and vice-versa.

The tricky bit occurs if and when you assess that a sale may be possible and you want to buy it.

Agent: Yes Mr or Mrs Buyer the home is for sale now

You the Buyer: How much is pretty well your next question - you can ask it smart or ask it dumb but it is the next question.

The replies often become wishy washy in almost all circumstances and fair enough to some extent -

• the agent doesn\'t always know for sure what it will take and it is early days


• the agent is also working for the vendor and is probably marking time to see what you may offer after some more questioning. Christmas time is a time of emotion and agents (both buying and selling) use emotion to maximize their clients position.

So maybe you will hear this: Well Mrs Buyer we told the seller $2,000,000; the seller/vendor wants $2,500,000 - I think; although the husband is not as fixed on that figure and we have some buyer interest at $1.9m.

Your (buyer) response to your spouse is..................hey Darls I\'ll do the Christmas shopping with the kids at Chadstone can you come here and talk to this nice selling agent.

This is pre offer stage and you really do need to think about some expert help (if you are unsure)  - before you actually commit to a price or an offer  - even a low one.

Why - well a low price may get you offside very quickly and you may well be dismissed; when a sensible offer would have bought it.

I can always increase my offer you say - well sometimes no - not if you are dismissed or sometimes yes you can increase; but if it is a big jump the vendor and agent maybe waiting for another big jump from you because of your huge leap after your first offer - even if your second offer, if originally made, would have bought it.

It is truly a powerful dynamic the first and often last offer - where do you pitch it and how do you present it.

That doesn\'t mean well pitched sensible lower offers don\'t work at this time of the year - they do - perhaps not as well as last year because seller fear is not as rampant as 2008 but nonetheless they do sometimes work. Some sellers are happy to just move on.

A well placed, well timed and well presented offer can work

The question is when, how and how much?

We at James are happy to talk to you in depth as each set of circumstances are different.

Of course you can save a buyer agent fee and a lot of stress (right now - the stress will come post purchase time) by offering $2.8m on a $2.3m home - try it and watch Santa get killed in the rush - but you do save the buyer agent fee.

Finally on this matter it\'s not all about money at Christmas - its about emotion. Way too many homes - and bad ones at that  - are bought at Christmas time only to find that in the cool light of a March settlement a big mistake was made - you just don\'t like it - you should have investigated the floor plan more, the termites, the caveat and the plumbing - not to mention you just don\'t like the area.

Happy Wife Happy Life yes!  but be careful at Xmas - you wouldn\'t want to get a seven iron through your car window if you just went

Special Conditions are leaving buyers cold

Sellers this is a truth - you may be losing buyers because of the solicitor or conveyancer you hire. That\'s right you are spending $600 to $2000 on contracts that maybe stopping buyers who have 10% deposit, are decent people and like your home.

We were down to a few minutes before an auction last week and refused to bid before the sellers finally agreed to some sensible special condition changes. Sure a conveyancer works for the seller but if it stops a buyer from having a go is that really protecting the vendor.

In the last fortnight we have had 3 separate legal firms refuse to allow our clients to buy until certain special condition clauses have been removed - 3 non starts unless things changed and they did - so my question is why put them in if you are prepared to pull them out. Answer: Because many buyers don\'t ask to have them removed.

This has been going on for years but it is getting worse. Please we are not saying that penalties for defaulters are not an issue, but this article is not about any default clauses. Its about unfair special condition clauses including:

• 1) Removing general conditions from standard Law Institute contract - the few that protect buyers


• 2) Telling buyers they and only they are responsible for the home at time of signing - even when they don\'t have access - instead of at settlement when they do.


• 3) Telling buyers they are responsible for things the vendor did prior to the auction. Hello!!!


• 4) Telling buyers they are not allowed to ask questions or dispute title even if title is wrong

You need to challenge these things if you are a buyer - you can\'t stick your head in the sand - sh...t happens in this business if you do. In three of the past 20 contracts we\'ve ultimately bought we have found issues re the size of the land - one smaller than claimed, one larger than claimed on the title but it was a laneway that hadn\'t been put on title. One was an agent\'s measurement and advertising error. Remember you are buying a title, a piece of paper and although we always measure up (with our measuring wheel) if you\'ve given away rights in the special conditions and you find a problem, recourse is more difficult if not impossible. You as buyers should not agree to these unfair special conditions.

And on top of this, at Christmas time some agents are not getting contracts till a day or so before an auction making a buyer\'s legal due diligence prior to auction very difficult.

Who cares the sellers may cry. No problems but if you are reducing your bidders you should care.

Lawyers believe they are protecting sellers and they need to. And yes we work for the buyers, but Mr and Mrs Seller we\'re just pointing out buyers maybe walking. If I had to choose last minute between two identical investment buys - one with a buyer unfriendly contract and one with a normal Law Institute contract which still favours the seller but in a balanced way then I know which I would choose.

Please, not trying to be controversial - pointing out facts - if you stop a real buyer from bidding I can\'t see how that is good for you the seller. I don\'t see how your conveyancer has helped or protected you by removing a legitimate buyer.

This is our last Market News for this year - except for our Bumper Christmas Special in two weeks - best auction - best auctioneer - best deal and so on. It is also the last in this format - you can see the new 2010 design that is having the finishing touches applied to it at www.jamesmarketnews.com.au

In finishing I would like to thank our brilliant reporters; Tom, Julia, Gina, Annette and David who with Jen help put our market news together each week. And I would like to especially single out our editor Melinda Brown who makes the wonky ideas we all have read like classic prose - well most times.

A big thank you to all the selling agents (yes I\'m sucking up) and auctioneers and company directors who allow us to move freely around auctions and who ring in results and let us report as we see it without complaining; even when we say things they don\'t agree with or when we take the micky out of them. Many of the selling agents are far more open minded than some negative press gives them credit for.

It\'s a great job being a buyer or seller agent, you change peoples lives. 

Buy Well now or maybe have a rest at Christmas and come back stronger and smarter next year. Stay safe.

Mal