I cringe every time I hear an auctioneer utter the words, ‘location, location, location.’
If location was really the biggest driving factor determining interest in a property, then 90 percent of homes wouldn’t sell.
Houses sell in Brighton, The Bronx and Beirut.
Houses sell next to freeways, high tension power lines and hospitals.
You can have six bidders for a house at 8 Green Street, but not a single bid on the neighbouring property at 10 Green Street.
When you boil it down, there is only one key determining factor that drives interest in any property…
Or more accurately, ‘value’, which in our case is what a buyer deems a property to be worth to them.
An elderly buyer with health issues might see living next to a hospital as a value add, while a buyer with recurring nightmares of being taken out by a tsunami might outright dismiss a beachside home.
I’m not saying that location isn’t important. Clearly it is. Armadale is the most searched suburb in Victoria on Realestate.com.au for a reason.
Quality also matters. As we are seeing right now, fully renovated homes are outperforming unrenovated homes.
But all other things being equal, a lower price generally equates to higher perceived value.
Herein lies the issue for unethical agents, where the temptation is to “quote it low and watch it go”.
Fortunately, there is now strict legislation around underquoting in Victoria.
The fines are substantial, and the reputational damage to brands seen to be flouting the rules is even more of a deterrent.
Furthermore, Stonnington is one of the most sophisticated real estate markets in Australia, with a high level of professionalism among agents.
Buyers in our market, like elephants and social butterflies, have long memories and extensive personal networks.
And if a buyer is knowingly misled by an agent with a low quote range, dishonesty around the interest in a property, or is blindsided by a high reserve price, it may well come back to haunt the agent. And so it should.
Good agents always try to ensure that their advice on value aligns fully with the quote range, and that their vendors are on the same page.
If the interest is strong in a property, or the agent gets any inkling that the vendors’ expectations are no longer in line with the estimated selling range, the agent is obliged to lift the quote.
It’s the only way to ensure transparency and a win-win outcome for buyers and sellers.
And even more importantly, it’s the only way to build long term trust and a great reputation in this relationship-driven service industry.
Still, sometimes agents get it wrong, and houses sell above everyone’s expectations.
The market is unpredictable, auctions especially so.
And then other times the market just doesn’t engage at the quoted price and agents must have very difficult conversations with their clients, with humility, around plan B or selling for less than they initially hoped for.
Both scenarios are playing out as we speak, with some houses absolutely flying while others languish. This is always the case.
And it’s tempting for vendors to blame the market or the agent, and for the agent to blame the market or the power lines.
Ultimately, none of those factors is the issue. It always comes down to price, price, price.
And as agents, we can influence price with integrity via good practice – the right advice and strategy, the right presentation and advertising, the right network of buyers and negotiation skills.
There’s a distinct difference between influencing price in an ethical way and trying to manipulate price in an unethical way.
The best agents do the former, so that they don’t need to do the latter.
Feature Property: 28 Hume Street, Armadale