Ep.73 | Quoting Has Changed In Melbourne

And the reason we're having this conversation is because I've had a very interesting conversation with some real estate agents this week that were essentially telling me that their strategy has shifted because the expectations from buyers, because the sentiment is so poor, is that they're essentially over-quoting properties and they are then allowing the the buyers to come in under the quoted ranges.

And that's actually what they wanted and what the vendor wanted the whole time.

So they're intentionally over-quoting.

However, that doesn't happen everywhere.

So if you're on our auction results email list, which I know you are as well, Jack, you have a read through.

We look through and do reports every single week on all of the properties sold in Boroondara, Stonington, Port Phillip and Yarra above 1.5 million.

And we go through what they're quoted, what they end up selling for.

And then if they are re-advertised, what they ultimately re-advertise for.

Now,

over multiple years, historically, what we're seeing is that, you know, unfortunately, in Melbourne, Sydney as well, we just under quote everything.

That's sort of just how agents play things.

You put it for two to two, two, it sells for like two, three, two, four.

And what we usually look at and what we see is where the reserves are, because that's what I think is like the most interesting piece of information.

So if a, you know, a vendor wants 2 million, what do the agents actually quote it for? And historically what we've seen is it will usually be $50,000 or $100,000 over the top end of the range.

That's sort of just like where real estate agents put it as a sweet spot.

If they wanted to, they might quote it 1.8 to 1.98 and it's like that $20,000 more for two.

Or it's like the reserve is actually 2.1 depending on the agency and the vendors and what.

what they all want.

But what we are able to do is see when properties don't sell, what they are ultimately re-advertised for.

So if they're quoted 2-2-2 and they don't sell, what are they then listed for on the Monday or Tuesday or the Wednesday, which is sort of usually a good indication of what the reserves are.

And that's been the biggest thing that I've seen personally over the last few weeks, even though auctions are a lot lower.

In this upper end of the market, what I've been seeing is properties that are re-advertised either below or within the advertised ranges, which is like shocking for what happens in Melbourne.

And I think a lot of buyers haven't caught on to it yet.

They're still probably anticipating, oh, we need to be over the top end.

And it's like not actually what it is.