Real Estate Agents

I disagree with you Jon,
REA will try to convince the desperate seller… trying to sell probably at or below market price. So that it is easier for them to sell without incurring long and lengthy PLUS costly advertisement.
It is the only way to keep their cashflow running…

Never TRUST REA…. Get an independant Valuer… only cost A$250??

cheers

Donald

It is a matter of conditioning in the current market – some sectors are still performing quite strongly however in others there has been a major correction. Those who can least afford it, being forced to sell (to stem their losses).

Buyers are wary of higher interest rates, rising cpi and a slowing economy and aware of what this means to them so they are seeking value out of their purchases.

Other factors also weigh in to the equation with fewer new properties being completed, which means the top end of each market has fewer sales. This is reflected in a lower median price as the sales are more reflective of resales of the general market rather than that of new premises skewing sales prices.

It's always a case of doing your homework …. Not all agents are crooks … there are some very good RE Agents around.  Their job is to sell properties for the highest possible price given the market conditions.

A valuation will always give you an accurate price (usually with in 10% each way)  but remember a R E Agent usually on gives an appraisal … very different from an independant valuation, unless they are licensed valuers … which some are.

If you reaearch similar properties you will get a good idea of the asking prices and selling prices and therfore can tell if an agent is working for the seller or the buyer… they can't do both!

The key is to ask lots of questions of the R E Agent.  Try getting a friend to ring the agent anon inquiring about property.

In a health market ….. dressing up your property will gain value … but in a downward market …. dressing up your property will usually only protect your value …… you need to look at what the other proerties in the area are offering in features, what is expected as a minimum and be careful not to spend too much dressing up!!

I'm an REA in Cairns, and as much as it pains some owners, prices have indeed dropped. The reason for this is simple. It comes down to supply & demand. Compare your local real estate liftout on a Saturday compared to 5 or 6 months ago and you'll see what I mean (ours in Cairns has gone from 48 pages to 72 in the last 2 months. More people are trying to sell at the moment primariy as a result of interest rate hikes, and the increased cost of living making it harder for some to sustain the mortgage. On the other side, buyers are harder to find, due once again to interst rates making properties less affordable. The level of property enquiry has dropped substantially as a result. In this situation, unfortunately there are those that must sell for less than they would have had to 6 months ago, some are even taking a loss. And it's this desperation that some are forced into that causes the prices to drop.

If you feel that the the property is worth more than the appraised value, I encourage you to consider an auction campaign when selling. The reason is that no price is attached, and a good agent will provide you market feedback on the price of the property. After all, it's the market that truly determines the value of a property, not the seller, not the agent, but the person who buys the property. Don't be discouraged if you notice properties that don't sell under the hammer. The fact is that if the property doesn't sell under the hammer, the seller will have a good idea of the market feedback which gives them the necessary tools to set the price right after auction, and in turn will ensure a timely sale. The statistics speak for themselves with approx 85% of auction properties being sold within 45 days as opposed about 68% of private treaty (selling with a price) acheiving the same.

However, when considering an appraisal, be aware that some agents will over appraise in order to secure your business, then will work on you to reduce the price to affect a sale. This can be very dangerous for a seller, as it overprices the property at the most important time of selling – at the beginning, and potential purchasers will disregard the property as a result. By the time the agent has encouraged the seller to reduce the price to where it should have been, the property will be deemed as 'stale' on the market, and it is much harder to generate the level of enquiry that is needed to affect the sale, and particularly in this tight market, this can be catastrophic to a seller (particularly a seller that NEEDS to sell).

My advice is to have more than one agent appraise the property (at least 3), and don't discount the one that is the lowest because it's not what you wanted to hear. Chances are, that agent is the most genuine and has provided an honest appraisal to reflect the current market conditions.

It's a tough reality at the moment, but statistics on sales activity backs this up.

The other cosideration is that if you are selling in today's market to purchase another property then you will be doing so in the same market conditions, so the perception of 'loss of value' is relative when it comes time to buy in the same market conditions. So if this is the case, don't be too concerned in the drop in the market.

HI god_of_money,

You are right in the fact that there is a lot of new development there. The CEC group which has taken a battering on the stock market are offering discounts on their previous market prices to clear some of their stock, but with so much around the area, you would need to be in for the long haul to see any substantial capital growth. Rents up this way are running at about 2% vacancy rates which equates to premium rents being attracted, but in my honest opinion (depending on your budget), the north side is the way to go. Our property manager regularly pleads with us sales staff to bring on more rental stock, as we simply can't accomodate all those wanting to rent on the Northern Beaches (I'm in Trinity Beach). Demand in the southern corridor isn't nearly as high as it is predominantly deemed as lower socio-economic area. I regularly receive buyer enquiry from investors, and a lot of the time people specify that they specifically don't want to invest the south of Cairns. This perception affects the demand for property in that area, and hence will have an effect on the market value, as well as the likelihood of premium returns on your investment.

Let me know your desired budget, and pre-requisites, and I may be able to locate a better option for you.

Edmonton used to be a small town, but with the new housing estates being created, it is growing fast. I think you've answered your own question by stating that there are 200+ new properties for sale and 80 + for rent. In real estate terms (as with anything really), it comes down to supply & demand. Yes you may be able to pick up a duplex for $450K, but if there is an oversupply of rentals, can you be assured that you're attracting a premium rental on your investment. The answer is quite simply, No. Not to mention the effect the oversupply of new property available will have on capital growth of your investment.

If you are working with a budget of $450K, there are better options on the Northern Beaches which will provide more solid rental return and stronger capital growth. I'm not just saying that because I'm an agent in that area, but the fact is that currently the demand for rentals in the Northern Beaches is very high which will encourage stronger returns, and the capital growth in the area is stronger due to the fact that it is a more desirable location.  And although there are currently housing developments also being undertaken in the Northern Beaches as well, the demand for the location is stronger and thus is a better option, particularly if you are considering a long term investment. So much so that 3 of my colleagues (including my Principal – with close to 20 years of local real estate experience) have purchased in the Bluewater development at Trinity Beach, and if I wasnt already committed, I would likely do the same.

Another consideration, as mentioned in my previous post is that that the South of Cairns is deemed as a lower socio-economic area, and as such you are less likely to attract the quality tenants that you would on the Northern Beaches. Not to say that the Northern Beaches are exempt from bad tenants, but you have a better chance of securing a good one in a higher socio-economic area. Sounds 'snobbish' I know, but the fact is that you want a quality tenant to look after your investment, and one less likely to default on rent. Your chances of this are improved in the better and more expensive areas.

I am more than happy to assist by providing you some options and work as a 'Buyers Agent' for you, and I won't charge a cent for the service (i would be paid by a conjunction with the selling agent). I can provide you with a list of solid investment properties along with rental appraisals so that you can make an informed decision, and as I would be representing you as a buyer, and not representing a vendor as a seller, I would be working for you and  could save you money in the process. I did exactly that for freinds of my Brother-In-Law last year and saved them approx $10,000 by negotiating with the selling agent for their first home.  I'm more than happy to assit where I can.

 Nothing happens to prices until  a vendor accepts a price.  That is the market price for that property  for those two parties. It has nothing to do with any other property.

Once that property is sold it it gone and a new set of circumstances apply to  the next property.
Time  for  vendors and buyer ( and agents)  to  really understand  what a  market price is  for   residential real estate. Learn about the spencer decision  THAT tells you what the market price  is. Anything else, from whatever the sources , is best guess.

What  influences IF prices  go  up or  down is the  amount of desperation of one or other of the parties. Either  the vendor  to sell or  the  buyer to purchase.

I am a  Licensed Real Estate Agent  

Now that   buyers believe that prices have slowed (based on media  hype)  we source  buyers who are  desperate to  get  funds from the native  countries and for whom  the price is not always the issue but  stability  and ownership of the land  is  of greater importance.

nothings changed here…..

agents have a reputation for  over quoting to sellers and under quoting to buyers becuase thats what most agents do to condition a sale as soon as possible to collect commission, particularly at auction.

as Jon chown said "  An Agent attempting to tell a Seller a low price will invariably walk away empty handed and with nothing to sell"  agents dont want that, they want there commission,