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Have your say: Should house listings have price tags and are auctions better?
In another sign that the housing market is heading back to its bullish heights, Harcourts has argued home sellers should avoid putting price tags on their listings and should choose to sell via auction. In an environment where buyers are testing the market, homes with a price tag could stay on the market for a lot longer and potentially achieve less than they would if the market determined the price, Harcourts International Managing Director Mike Green said in a press release. "The current real estate market is rapidly changing, very much impacted on by volatile global economic conditions, and the number of properties being listed for sale is lower than usual too so that's adding another dimension, namely a build-up of demand in some areas," Green said. "Given these circumstances it is particularly difficult for real estate sales professionals to give sellers an accurate appraisal as to what price a home might achieve and so marketing with a price may be unwise." Selling by auction was now the best option, Green added. "Firstly, auction marketing campaigns mean there is no ceiling put on the price and in the end many sellers are very surprised by what the market is willing to pay for their property at or before auction day," he said, adding that auction properties generally sold faster because of the 'sense of urgency involved.' "This urgency is not typically felt where a property is marketed with a price with no timeframe within which a buyer needs to act." What I think
This is a sign that the madness is back. House prices have nothing to do with fundamentals and everything to do with the fear of missing out on the untaxed capital gain. This is a symptom of everything that is wrong with New Zealand's business and investing culture. We believe house prices will always go up and we can trick buyers into paying more than they are able to pay, simply because the bank will always front up with the extra cash in the form of debt. Good luck to you all. What you think? We welcome your comments and insight in the comments below.
87 Comments
I hate listings without price
I hate listings without price tags. My wife and I were looking at houses recently and there was nothing more frustrating than going along to an open home and finding a place that could have been in your price range only to find it's miles outside it. I've just wasted time and effort in going there and it has further lowered my opinion of the real estate companies who do this, Harcourts in particular.
Oh dear , the mad
Oh dear , the mad scramble for a house / tax rort , begins anew . Sad , so very sad . We have learnt nothing from the subprime crisis . And Harcourts are at the front of the cheer-leader squad , well it is their game .
I'm in the market to
I'm in the market to buy a house. There are hundreds on sale. I don't have time to dance with agents, either put a price on the house or recognise you won't sell it to me.
There is nothing wrong with
There is nothing wrong with Auctions, I'm all for them in prinicple. The problem with Auctions is that they don't allow a "true market value" to be found for a property because of the reserve price set. They set an artifical price floor based on over-inflated expectations, but leave the ceiling open.
Have you ever been to an Auction where the reserve price isn't met, and the bullying tactics start.
This chap would say that
This chap would say that Auctions get lower prices!
http://www.jenman.com.au/BS_S_Auctions.php
He also has a bit to say about Harcourts
http://www.jenman.com.au/news_article.php?id=257
Last weekend 454 properties auctioned in Melbourne 209 sold. That's 46% in normal language.
In a proper free market,
In a proper free market, all the participants have the same information.
The real estate market couldn't be worse -- buyers have to pay for their own assessments of property condition etc, only agents have easy access to price information for similar properties, the tender process is designed to hide what others are bidding.
Only agents have full access to relevant information. Sellers are at their mercy and buyers are the worst off of all.
No wonder agents love this inefficient market.
That Matt , is the
That Matt , is the point . Don't allow the bidders to have knowledge of the true worth . Auctions are based on a lack of transparency . Suits the sellers . Given my total lack of emotional control , I would not go anywhere near an auction . ( S . Judd sums it up better than me , above )
As house hunters we are
As house hunters we are feeling quite frustrated at the number of auctions. They are not an option for us, as we do not want to spend approx $1000 on due diligence costs, without even knowing if our offer is in the ball park. It seems that the agencies are leaning more and more towards auctions (esp Harcourts) and houses are going for more than they otherwise would (I guess the lack of houses on the market and peoples desperate to get on the property ladder while interest rates are low, combined with the auction atmosphere all contribute).
No worries, just check out
No worries, just check out the cv at the council site, deduct 10% to start with and then figure on another 10% fall for sure. The ones with the cash, especially if it's their own, call the shots. Stuff the banks and always approach the vendor leaving the agent out of the loop. That's a saving from the git go. Try searching the neighbourhood for places you like and then trace the owners at the council office. A quick check will clarify mortgage debt and you will find out whether they are into that age bracket where a move to smaller digs is a thought. You turn up with a cash offer. Better still, stay renting.
This spin from Mike Green
This spin from Mike Green of Harcourts beggars belief. For a very worth-while insight into how the real estate industry really works, check out the book "Don't Sign Anything" by Neil Jenman. There's a whole chapter in there about auctions, and how the only people who benefit are the real estate agents. The vendors hate it, because of the immense pressure, and the buyers hate it for the same reason. Also, many vendors don't understand the meaning of their agreement to 'put the property on the market', with dire consequences....
Mr Green (he did it with the pen in the kitchen....) says "auction marketing campaigns mean there is no ceiling put on the price" - neither does putting a price on a conventionally listed property! Buyers are entitled to offer as much above the list price as they like!
He also says "it is particularly difficult for real estate sales professionals to give sellers an accurate appraisal as to what price a home might achieve." If this is the case, one wonders why we pay them 4% comission at all. The professional sales team at Harcourts spends every working day a year working in the property market, but suddenly they don't have a gauge for what a property might fetch when sold...it makes me wonder what they do know....
Nice links, Russell (1.59pm)!
Nice links, Russell (1.59pm)!
Real Estate Agents have a
Real Estate Agents have a vested interest in convincing people to sell by Auction as not only do you pay the fees for the sale they will then put their hand out for $5,000 to $10,000 upfront to pay for an advertising campaign - this then gives the agency a big branded profile and you end up paying for their huge logo and salespersons mugshot which is usually the largest part of the advert.
Don't be suckered people!
If the market was that hot everyone would sell privately on trademe.co.nz - trouble is there are already 48,000 homes on there and only about 5,000 a month actually selling.
Miguel - like this http://www.jenman.com.au/BS_S_Auctions.php
"House prices have nothing to
"House prices have nothing to do with fundamentals and everything to do with the fear of missing out on the untaxed capital gain."
Well BH, that's the gamble many have chosen to taken, and I don't think you or any others can convince the banks and the populace that there is anything wrong or "risky" with what they're doing. As for "the fundamentals", remember, those fundamentals are built upon your own reasoning, not those of the perma-bulls.
Personally, until we can actually quantify and/or effectively measure the impact of all the drivers in the market--tax advantages; supply-side constraints; future earning expectations; immigration, etc--I don't think that anything will change because the propaganda machine is aimed at Jack & Jill Average whose attitudes are grounded in what they've seen over the past 8 years. For them, understanding how the debt mechanism works is intangible and a low priority when deciding where to park their money.
After the 17th of November
After the 17th of November all real estate agents must supply the seller with an appraisal in writing. So after that date when you go along to an auction or tender or a property with no asking price just ask the agent "What was the appraisal figure you gave the seller in writing" - that will put them on the spot.
Thx, again, Russell. That's a
Thx, again, Russell. That's a tip that's new to me, and why I read this site.
JC I fear you are
JC
I fear you are right.
I say bring on a land tax and/or a capital gains tax to bring us to our senses.
cheers
Bernard
And where would you have
And where would you have Mom&Pop investors park their savings , Bernard . In which investment category have they NOT been ripped off ? Property wins by defacto , the alternatives are appalling and galling .
I'm just old enough to
I'm just old enough to recall that we used to have a land tax many years ago. Farmers in particular hated it but it also caught some home owners and other businesses too because from memory it was based on aggregate holdings of land. Having a land tax be another disincentive for speculators buying up plots of land and holding them - assuming that they can get finance these days!
I think that the idea of a land tax is ok but I would go one further and have a higher rate but eliminate local body rates. This would be funded from part of the land tax. This should have some efficiency built in with less admin and bureaucracy at a local council level. Why do we need 100s of council billing departments? My understanding is that the States in Oz are partly funded by the nationally collected GST.
Interesting that the cgt/lt survey
Interesting that the cgt/lt survey being run here has the pro-tax people winning the day. A small sample, agreed, but given the nature of this site, surprising nonetheless, don't you think John, Bill, Peter?
Maybe these people care more about NZ than their own self-interest and more than you do.
Lets see what happens if
Lets see what happens if the NZ property market finally collapses. Auctions may finally be a place to pick up a bargain. Until then they are simply a mechanism to confuse and emotionally ramp up both buyers and sellers.
The NZ property market is currently completely out of whack with fundamentals but the fanatic kiwi belief in property keeps the disaster train charging full steam ahead towards and inevitable collapse. I was talking to newlywed friends in the weekend. Their generous parents have given them an interest free loan to reduce their mortgage very significantly however now they are telling me that they are going to remortgage and buy a rental property. It seems they are utterly determined to have a large mortgage despite the fact they have a kid on the way. They may get their wish to jump on the train right before the final triumphant crash. I had to hold my tongue.
Roger Some of the alternatives
Roger
Some of the alternatives would not be so bad if we used the land tax to fund drops in savings rates. I would be very happy to only pay minimal tax on my TDs (eg 6% after tax on a 7% TD term would be great - beats long term inflation by 2-3%). But 4.3% after tax does not look so great.
And lets not forget thats its HIGH DEBT based on HOUSING SPECULATION that has caused most of the volatility in share markets AND finance companies. The bubble in stock assets and exuberance surrounding dubious development projects mostly had a common denominator ie increasing credit, largely secured on residential housing, producing asset bubbles, leading to more credit, overconfidence etc etc etc. The thing holding the whole farce together was consumption and the mortgage holders ability to pay interest. No surprises that a real estate related activity (ie sub prime) was the spark that sent the whole thing into freefall. A land tax would go a long way to arresting this type of bubble and thus add stability to ALL sectors.
Russell, an appraisal could be
Russell, an appraisal could be a simple statement that a property is worth between this and that !!!!!
Bernard - send one of
Bernard - send one of your reporters over to the Barfoot and Thompson auction rooms tomorrow and I think you will see that very few are selling at the auction.
Barfoots August results - Only 147 out of 337 sold under the hammer and August was supposedly a strong month.
Wally - my understanding is
Wally - my understanding is that after Nov 17th they have to supply an "exact figure" no more vague bullshit or overpricing to impress the seller otherwise they may end up in front of the real estate authority!
You mean, an appraiser? Like
You mean, an appraiser? Like a ratings agency?
Yee-Haaaaaa!
Wait, I have an idea for a New Tax....a Moral Hazard Tax. Plenty of That ter go around...
"Exact figure" = "vague guess"
"Exact figure" = "vague guess" based on what? Similar sales in the area? Isn't this flawed methodology just perpetuating the problem?
Another property boom will bankrupt
Another property boom will bankrupt this country.
Not CGT, land tax, simply enforce the current tax laws, a matching of the company and top tax rate, ring fence losses on a property.
Someone the other day said it well, the best we can hope for is about a decade of sideways movement to correct this madness.
Russell, search out the wording
Russell, search out the wording and let's have a look at it.
“Given these circumstances it is
"Given these circumstances it is particularly difficult for real estate sales professionals to give sellers an accurate appraisal as to what price a home might achieve and so marketing with a price may be unwise."
and here's me thinking this was part of their job, silly old me.
Bernard I am pleased you
Bernard
I am pleased you have taken the opportunity to bring this press release to public exposure. I read it with a fair degree of disbelief.
Everyday we receive emails from members of the public who like some of the comments here ask the question of why we cannot put a price on every property - the simple reason is we only display what we are given. We certainly encourage all agents to put a price to assist the buyers better understand price expectation.
To back up our recommendation we highlight the recent Nielsen market research survey which showed that when asked as to what buyers most want in terms of information for listings on real estate websites "an accurate estimation of the selling price" came in with 93% of all people wanting this.
To put some objective facts to the view that auctions are actively being used to market property have a read of this analysis I did back in August that showed that indeed auctions were becoming more popular up by almost 100% - but from just 6% to 12% of all listings. Additionally of the 69,286 residential listings on realestate.co.nz a clear majority 60% were actually marketed with a clear price.
Auctioning of property certainly growing in popularity - Unconditional blog
Alistair Helm
CEO - Realestate.co.nz
Having a price tag would
Having a price tag would be nice. But more serious than the home price would be the fact that homes sold via auction may have defects that are intentionally hidden from the buyers. Generally the auction S&P contains statements that indemnify the RE agent of any misrepresentation. Some even delete vendor warranties from the S&P.
I think it should be mandatory that homes sold by auction should be accompanied by a LIM report and Building Inspection Report. The cost of LIM and Building report would be about $700, which is only a very small part of the agent commission.
I don't use auction if
I don't use auction if I am selling my house because you can not get the hightest price people want to pay for my house.
Say you have 3 potential buyers, buyer A wants to pay 800k, buyer b wants to pay 900k and buyer C wants to pay 1M. You know what you will get on a auction. you can only get 901k because buyer B stop bidding after buyer C bid for 901K, no more bid and the house will be sold less then what the buyer C wants to pay.
So I rekon, the tender will be the best choose. Like above scenario, you will get 1M.
Fairfax says : Not CGT,
Fairfax says : Not CGT, land tax, simply enforce the current tax laws, a matching of the company and top tax rate, ring fence losses on a property.
Yes that would solve half the problem, but only half and that's if you spent $2 of compliance / enforcement to get $1 of additional tax as monetary policy has to change as well
Anyway the current tax laws are by nature open to abuse and need to be tighten up to make the enforcement and compliance costs lower. That's reasonably obvious I would have thought. However I start with a different perspective which is why are people allowed to farm capital gain and pay no tax. Is it income (Yes) if so tax it and move on. I can negative gear my cash flow and never pay tax again under the current tax laws and that's just not right. If I speculate on property (I invest in businesses) then yes it would be worse as I get a cash flow advantage from the state and get to keep the tax rebate when I sell the asset.
People we are not at a competitive disadvantage with Australia if we introduce CGT but we are with current PAYE. So let's get CGT in place on non owner occupied properties and other assets and lower PAYE accordingly. As long as CGT is at crystallization of value I have no problem with it. The introduction can be low and slow as long as it happens. Say 5% for the first two years and then 10% for 2 years and then 15% for 2 years until it reaches the top rate of marginal tax rate which should be coming down at the same time. We could do worse than adopt in total all of the CGT rules Australia has but I am sure a few tweaks would make it even better.
Do that and adopt Singaporean Monetary policy with a few tweaks and we would hum as a nation.
Jeeez William, you can't make
Jeeez William, you can't make suggestions like that...can't have the Law being used to cut out the rorts...not the Kiwi way William. If you can find someone silly enough to put in a tender, good luck to you Seller.
An auction (following a three
An auction (following a three week ad campaign paid by the seller) is simply a mechanism which gives agents the greatest opportunity to `crunch` sellers to `meet the market` in the shortest possible time and move onto the next sale. Its not madness its completely rational from their perspective.
Quote Bernard, "This is a sign that the madness is back. House prices have nothing to do with fundamentals and everything to do with the fear of missing out on the untaxed capital gain."
When a bond, a public company share, units in a market tracking fund, gold, a farm, a business, a brand, a painting, a car, an invention etc is bought and resold at a higher price there is a tax free capital gain. In respect of capital gain all these assets are treated in the same manner by the IRD. The only way in which property may have a tax advantage is if the landlord collects the rent in cash and doesn't declare it.
If the public continually opts for property as a safe place to store their wealth then you must ask what is the problem with other asset classes. Finance companies anyone? What about the NZX, which over 30 years returned less than bank deposits? Crafer farm equity?
Looks like NZ is heading
Looks like NZ is heading for a major property crash. Why didn't NZers heed the warning signs of the first wave of the worldwide recession. When the second wave hits, many NZers who borrowed heavily to buy overpriced house, are going to be caught out, and many lose everything.
Yes the madness is back
Yes the madness is back businesses associated with the renovating market and related services are reporting a huge ramp up in demand in recent weeks 6x that of recent months some of it will be pent up demand however many of their customers are starting to get back into the game of preparing the house/s for sale. Real Estate agents are reporting multiply offers sales within 24 hours. Insufficient pain has been has been experienced here certainly not enough to cause change. The fundamental problem here is yes in part the tax issue but it's a symptom of an out come of the main problem that is central banks facilitating and endorsing massive credit creation. We are still in the later stages of the massive Greenspan "“ Bernanke 20 year bubble a bubble that has not been allowed to deflate thanks in the main the to US at huge cost ( but that's somebody else problem in the future) in fact they are now creating new bubbles equities, commodities, property. Sure we had a melt down but just a glimpse of what is to come at sometime in the future. There is clearly no political will to tackle this madness the opportunity has been lost i.e. making good use of a crisis but I seriously think we were too far gone to contemplate a real correction years ago. The politicians will tinker around the edges change the rules here and there but the elephant in the room will live on for a while yet until no more bubbles.
I just bought a house
I just bought a house - and yes, it had a listed price. I had been looking around for close to a year and during that period, I avoided all houses which did not have a price advertised, and especially those which were on auction. For two reasons - I don't have time to call agents up and ask them for the price, only for them to take my details and start harassing me about other houses on the market, and secondly, I didn't want to be a sucker by 1) either shelling out hundreds of dollars on LIM report and building inspection without a guarantee that I will actually be able to buy the house if I liked it, and 2) I didn't want to be sucked into getting a leaky house by buying it unconditionally at an auction.
If you owned a home
If you owned a home that many people wanted, auction would be a great way to determine the true market value. If you wanted to make sure you were getting top dollar for your house your agent would naturally ask the top bidder to stretch to their maximum. If your agent didn't ask your buyer to do that, why would you pay a fee to your agent?
I have both purchased and
I have both purchased and sold at auction, it can work well. it finds the top price on the day from those at the auction or phone bidding, this may be more or less then what it should have sold for. buyers must set top bid and sellors must set reserve and both must be prepared to walk away.
anyone who thinks the us has not addressed their bubble should go visit the RE bubble is over / dead in the us.
OMG, Auction = fee gravy
OMG,
Auction = fee gravy train (guaranteed marketing fee + auction fee) + closure pressure on the seller (for whatever offer is on the table) so the agent can nab 4%.
What a fricking rort.
I am very pro-property ownership
I am very pro-property ownership and can't understand why people keep harping on about changng the tax regime, just to make them feel better. I am from the UK and rental properties - normally the ones affected by a CGT - are still in big demand. They cost more to buy than in NZ and not everybody is on fantastic wages. When I emigrated, banks were looking at 50 year mortgages for people wanting to get their foot on the ladder. People are far more obsessed with property in the UK than they will ever be in NZ - and the UK has a Capital Gains Tax! Anyway back to auctions. I would never auction a property unless I had something that was totally different to anything else on the market or in a highly desirable location. I am NOT a real estate basher, but i do think the auction is set up to benefit only 1 party - not the vendor, not the purchasor, but the real estate company/agent.
It is often frustrating to
It is often frustrating to watch a bubble from the sidelines expecting it to pop. The dairy and property bubbles are survivable now. A double bubble plus a natural disaster would annihilate the New Zealand economy. I'll wager that the Government and RBNZ do nothing to stop it
RBA lifts interest rates. How
RBA lifts interest rates. How is this going to affect us over here. Our interest rate, NZ dollar etc etc. It might be time for another thread Bernard but I'm guessing your already onto it. Its quite a move from the RBA and I'm quite impressed.
http://www.smh.com.au/business/rba-lifts-rates-20091006-gkv5.html
The agents obviously know the
The agents obviously know the current fillip is a dad cat bounce and are trying cream as much fee revenue as possible.
Granny Herald reports:
ANZ economists are expecting the housing market to flatten as Christmas approaches, rather than go higher
When we bought our house
When we bought our house back in March, we had been looking for over a year, waiting for prices to become more reasonable. During this time, my main source was to look on Trademe and RE websites. I always got annoyed at listings with no prices!
Most buyers want to look and compile their own information without having to ask a RE agent for prices, just to then have them hound you for months about other houses etc.
Personally, I hope I never have to sell via an agent, unless they were prepared to take a 1% cut as that is all I believe they are worth. How can a RE justify a $15k fee for selling a house that the seller could flick off on Trademe for $10k less?
@Alistair Helm - You RE agents know the market better than anyone else, and you must be joking if you think that having pricing on 60% of your listings is good. Rather than saying "we only display what we are given", how about getting off your arse and getting the info.
Bernard, why you so obsessed
Bernard, why you so obsessed with Housing market, or it's just internet traffic you are interested in? If you want to bring people to their senses why don't you spark debate about money creation/supply, if you dare, which is biggest issuse, not just here in NZ .
I once protested to a
I once protested to a Real Estate Agent that as a buyer, I couldn't understand why so many Kiwi homes were sold via auction or blind tender. Coming from the UK, I explained that the vast majority of housing has an advertised sticker price, allowing you to easily determine which properties are in your price bracket.
When you decide to put an offer in, you generally start negotiating it down as much as possible, making the assumption that they've built a bit of fat into their asking price. There's a little bit of haggling, but everyone knows where they stands - at least with the pricing aspect. Auctions and tenders are generally reserved for very high-end or unusual property, perhaps with historical significance.
Anyway, the Real Estate Agent was very candid and said, "well, it's the best way to make the most amount of money out of a property. You never know when somebody is going to come along and offer a ridiculous amount of money - an auction or blind tender captures those buyers nicely."
So I replied, "Ok, I can see how it is in a SELLERS interest to use the auction/tender process. As a BUYER therefore, I am not going to use those mechanisms. Thanks awfully, ta-ta."
I can't stand the auction process, they entirely tilt the outcome in the favour of the seller, who inevitably sets the reserve beyond the realistic sale price anyway. There is no chance whatsoever of getting a bargain! You are guaranteed to have to pay more than anybody else in the room to secure the property.
Blind tenders are no better - from a buyers perspective it's just a lottery. Except if you win it, you go "HOORAY, I've just....... paid more for this house than anyone else was prepared to. Hmmm. I wonder how much money I just unnecessarily threw away? Why do I suddenly feel sick?"
Are you guys forgetting that
Are you guys forgetting that the sellor is the guy in command of the sale?
I would not buy any
I would not buy any house that's marketed via auction and short notice (2-3 weeks), simply because of the terms and conditions, since even a good building report may not necessarily show all faults at first inspection.
I know of an example where a potential buyer had an inspection done on a house which passed fine, then the same (and very thorough) building inspector went back for a second time a week after, and after some fairly heavy rain, he found a couple of corners that suddenly showed rather high moisture levels up in the walls around those corners. Result was, there would have been major investment required in drainage all around the house. And those inspections were done with pretty sophisticated gear. So, one lesson to be learned is, not every inspection will be perfect, especially when buying in the summer!!
At the end of the day, it's just unbelievable how careless so many people are when buying property. Until people don't get easy credit anymore and have to save much longer and harder before being able to even think about a house, we may not see any substantial change in buyer behaviour.
interested : I would've thought
interested : I would've thought that the buyer has the upper hand . He can always go elsewhere . Leaving the vendor with his unsold property . And as such , I don't waste my time with auctions or tenders . If the seller is too dopey or lazy , I ain't gonna knock myself out doing their responsibility for them .
Bernard, you seem to dislike
Bernard, you seem to dislike most things about New Zealand and seem a very unhappy person. If this is the case - why do you live here?
@ctnz: I remember being told
@ctnz: I remember being told in Australia that a lot of people put more time and effort into researching the new TV they will put into their new house, than the new house itself!
The RBA has just lifted
The RBA has just lifted rates in Aussie. This may force our hand with respect to rates here. Lets see what happens when our interest rates start climbing.
It might be time to start a new thread on this Bernard:
http://www.smh.com.au/business/rba-lifts-rates-20091006-gkv5.html
@ Morzart - You are
@ Morzart - You are exactly right. I don't understand the blind tender situation. If you put a price in, you wait in anticipation to see if you "win". If you don't, you feel sad because you didn't get the house, if you do, you feel like a fool because you potentially paid more than you should have, and definitely more than anyone else wanted to. LOL it's a lose - lose situation for a buyer.
Interested, it depends on your
Interested, it depends on your point of view. Personally, I don't care whether I'm buying or selling - whatever way the transaction goes, I want to be in charge of the sale.
So if I'm buying, I'll use the mechanism and find the circumstances that will allow me to take command of the sale, otherwise I'm not going to get the best deal.
If I'm selling, I'll do exactly the same and ensure I can personally get the best deal.
I'm not into trading property, but it astonishes me how many people out there are happy to let the Real Estate people "take command of the sale" and have every last dollar squeezed from them!
Lew Burton, frustrating but entertaining
Lew Burton, frustrating but entertaining no? Now that the RBA has started to raise rates, say goodbye to the so called spring property recovery in Noddyland. Here come the rate increases. Wonder which bank will be first off the block.
I would only consider bidding
I would only consider bidding when there is no reserve.
Are you an unhappy person
Are you an unhappy person Bernard ? Maybe a big bowl of rhubarb and custard will fix you up . ......... .Gummy Bears do it for me ............. Ahhhh , gummy goodness . Yum .
@ Wally - Rates haven't
@ Wally - Rates haven't risen in NZ yet mate...
i once had a short
i once had a short foray into the real estate game working for Ray White on the Gold Coast of Australia.
believe , there is no weirder place to get into the game.
anyway, having GOT THE LISTING.. R Whites instructed us to always endeavour to get the vendor to go for an auction rather than price band.
the reason was simple.
an auction often failed which then gave us an opportunity to tune the vendor into having to meet " the market conditions" whilst still having the listing.
also the vendor had to stump up dollars for the advertising of the auction so it was all in the agents favour and after a failed auction the vendor's were so amped up beforehand that they caved in took a lesser price.
and the greedy little r/estate agent waddled off with another easy sale without much work.
BTW.. twat's like Perry etc above who resort to trying to shoot the messenger by telling Bernard H. that he's negative and a sad -arse should get over it.. and even preferably set up their own website and see how hard it is to run one such as this service and forum provided by www.interest.co.nz which is simply trying to try to provoke daily debate.
Rhubarb Crumble and Custard -
Rhubarb Crumble and Custard - man, that is one of my favourite things. You've got me salivating now, I missed lunch.
I think Bernard is probably a happy man, not an unhappy one. All he has to do is mention the Real Estate Industry and we generate 70 comments in under 4 hours.
That's pretty good going!
Bernard would be happy if
Bernard would be happy if we all flicked real estate all day, as long as we showed "Productivity" gains... while doing so...
Mozart : Johnson Grocers in
Mozart : Johnson Grocers in Colombo St. CHCH sell English made Rhubarb Crumble & Custard boiled lollies .......... You can indulge your cravings whilst on the go , and it totally takes interest rates / the OCR / real-estate agents / etc , off your mind !
What a load of cr@p,
What a load of cr@p, investment properties have been selling for the last 18 months, and now the worst is behind the general population are looking to upgrade before things rise too much or interest rates climb. Has nothing to do with 'investing' in property or 'making capital gains' rather buying something nice for less than replacement or getting the dream house they have been holding back on for 18 months. Would love to see what has been selling over the last 4-8 weeks, sure most of it is owner-occupiers and the odd muppet investor jumping on too late.
interested : Must be a
interested : Must be a way to securitize property deals , to bundle up the fees , and hock them off to offshore sovereign wealth funds . Then flicking properties would become our patriotic duty , doing it for King & Country , old bean ! Productivity gains may even rival those of our current two stellar growth industries , public servants & prisons .
Here's another thought. When I
Here's another thought. When I lived in Sydney the Sydney Morning Herald would list last week's sales prices every Saturday in the Real Estate supplement.
This essential information cost $2 or thereabouts. To buy similar information in Auckland from QV would cost $1000s.
I don't know if it's a legal requirement in NSW to publish sales prices, but wouldn't a similar move in New Zealand work wonders for property buyers? It would also help people selling property to determine a realistic sale price.
Bernard. Could interest.co.nz publish this data?
Wally, Some say there is
Wally,
Some say there is usually race to buy right after the first rate increase. (may just be "conventional 'wisdom' ")
One mitigating factor: AUD carry trade becomes more attractive which should make funding easier.
I would like some entertainment though
I've read surveys that auctions
I've read surveys that auctions actually reach lower prices, but estate agents love them because it gives them great exposure and promotion.
I'd never sell by one, what about all the potential buys who are put off by auctions as well.
Harcourts came up with this
Harcourts came up with this release after my comment about similar yesterday: did BH ask them or do they monitor interest.co.nz? If they monitor it shows a very touchy lot in the real estate industry indeed.
"Selling by auction was now the best auction, Green added." Damn right it is -- for Harcourts and the agent. In my relatively recent experience of Harcourts my plainly unsuitable property was recommended for auction, with the top price expectation tens of thousands of dollars less than the actual sale, which was achieved inside a week. Lie White (they just couldnt help themselves -- a porky with every call) was no better. Go with a good 1 per center I say! Saved me 12 grand on the fee and about 40 grand on the price.
If I were in the
If I were in the market, I would ask to see property with firm prices first.
Funnily enough I have owned only two, he first as a section and build and added to over time, the second bought at auction but with very special circumstances. As a freeholdable leasehold I understood the residual value of the remaining lease period (which I believe the other bidders did not) and got it for under my price. In fact I only came in as one and final bidder and was not challenged. It does prove that auction can be OK but I would never sell by auction or buy. Yes Harcourts like the low cost of auctions because it is your cost to advertise. Agents spend virtually nothing and up to now have been able to get the discounts from the advertsing which they did not pass on.
I think it should be compulsory to give a valuation and explain why it is different from the CV. Most property is able to be valued and there is no excuse for not doing so.
Hey there I see this
Hey there I see this thread has moved to other ideas like CGT.
Here is my take.
First and foremost is the fact that ease of gearing through mortgages allows for more gain in good times. Alternatives, apart from commercial property and some more exotic products, do not offer this and often that requires greater initial capital.
To my mind the best way to tackle the uneven playing field is to address taxation on the borrowings (the 'bonus' you get by using the bank's money or really the saver's money) One suggestion is to make the first 3 percent of interest on borrowings not deductible against income. (I have chosen 3% because that is an averae annal inflation of money and should not be taxd to lemnders). LAQCs would then be less attractive. This would have no effect on home mortgages because there is already no benefit right now. Neither would second properties for personal use benefit unless used also to produce income.
The nominal 3 percent is a suggestion only and could be aligned with prospective inflation and varied each year in advance within annual taxation legislation. Everybody would know in advance where they stood.
Because the Government would now receive more tax it would be able to offer NZ resident lenders an equivalent tax free portion on their savings deposits. That would truly find favour with retirees (like me!).
ould the 80% borrowers for rentals moan? You bet.
Sorry about the errors The
Sorry about the errors The editing is AWOL
Roger T - "Johnson Grocers
Roger T - "Johnson Grocers in Colombo St." is that the place that has been there for years and years? There used to be a great pizza place over the road - in the '80's that is.
the only sellers who are
the only sellers who are going to price their houses are those who have made a fundamental shift away from a greed mentality. they will have researched the market (independently and thoroughly on their own accord or by using a valuer) have decided the price they are happy to take, and got on with it. alas, if anybody any tell me how you get people to stop thinking 'but somebody might pay a bit more', then we are stuck with what we have got. i certainly can't see the change coming from the reinz - they simply prey on the sellers lack of market knowledge and greedy attitude, and who can blame them
Rather than focusing on housing
Rather than focusing on housing which everyone seems obsessed about, what about someone starting a constructive blog on the real question:
How does NZ compete on the World stage, given our current weaknesses:
1. Inability to compete with overseas cheap labour (Hence the closure of many successful export businesses)
2. High exchange rate & Exchange rate volatility
3. Geographic disadvantage (High shipping rates and the ruddy new carbon trading scheme is only going to exacerbate this)
JT - we cannot compete
JT - we cannot compete - simple!
Geography not the problem:
The cost of sending a 40ft steel container of merchandise from China to the UK has fallen from £850 plus fuel charges last year to £180 this year. The cost of chartering an entire bulk freighter suitable for carrying raw materials has plunged even further, from close to £185,000 ($300,000) last summer to an incredible £6,100 ($10,000) earlier this year.
Business for bulk carriers has picked up slightly in recent months, largely because of China's rediscovered appetite for raw materials such as iron ore, says Huxley. But this is a small part of international trade, and the prospects for the container ships remain bleak.
Some experts believe the ratio of container ships sitting idle could rise to 25 per cent within two years in an extraordinary downturn that shipping giant Maersk has called a 'crisis of historic dimensions'. Last month the company reported its first half-year loss in its 105-year history.
Read more: http://www.dailymail.co.uk/home/moslive/article-1212013/Revealed-The-gho...
Trev: Yup that's the one.
Trev: Yup that's the one. And they sell Twiglets.
trev : ruru knows it
trev : ruru knows it . They may be Chch's oldest continuous trading retailor . The place looks like Arkwright's store when you bowl in , an Alladdin's cave of nooks and treasures .
Spin Spin Spin "Harcourts has
Spin Spin Spin
"Harcourts has argued home sellers should avoid putting price tags on their listings and should choose to sell via auction."
My next question was..."what is more profitable FOR THE AGENTS?"
Then
Russell Says:
"Real Estate Agents have a vested interest in convincing people to sell by Auction as not only do you pay the fees for the sale they will then put their hand out for $5,000 to $10,000 upfront to pay for an advertising campaign - this then gives the agency a big branded profile ..... "
So it is just another case of Real estate agents 'making the facts fit" to feather their own pockets.
Other than that I cannot see any other reason
Maybe a note of warning for those HAVING TO selling investment property...
Was at a friends place yesterday, help to move....the property has gone on the market.
They dont want the insecurity or people invading their privacy...and it is an above ave range rental.
They had not handed their notice in, but it was ready to pass on with 3 weeks rent in.
They and agents rolled up, the owner was quite ok until the notice was given them...
The question for the owner is , how long will it take to sell with the unlikely hood of not getting tenants being on the market....and the implications of cash flow...
Steps - I imagine there'll
Steps - I imagine there'll be a bit of that going on in this current environment.
Thanks Ruru and RT. Good
Thanks Ruru and RT. Good to know that some things have not changed. When I lived in CHCH it was the place that always had that ingredient you could not find elsewhere.
AGENTS ARE VERY VERY DIRTY
AGENTS ARE VERY VERY DIRTY AND DISHONEST !! BRING THE RULE CHANGES. THAT WILL SORT THE BUGGERS OUT!!!
I think many of the
I think many of the issues above are really character based issues from whom you employ. Rules and Regulations will never fix issues of charactor, although our Goverments have concentrated on rules and regulations and tended to ignore things that will build charactor! There are honest and dishonest people in all industries. However who is the real estate agent employed by? the answer of course is the seller, and a good agent should be trying to obtain the best price for the person who is employing their services, right? Sometimes auction may be best for the seller, sometimes price may be, and market conditions change reguarly. However what I have discovered is it is best to employ the services of a real estate salesperson that knows their stuff and has a proven track record of results. The agency they work for does make a small difference but the skills of the actual agent are by and far the most important.
After all a home for most of us is our biggest asset, so why employ the services of an idiot!
I personally would not sell privately as I have found the skills of a great negotiating agent has made me thousands. Their fees have never cost me a cent in my opinion as they have earned every dollar that I have paid them.
If people did more research into the skills of the person they employed to sell their property I am sure there would not be so many problems. The old saying that 80% of sales are sold by 20% of the sales force is a true in real estate as in every other area of sales. Just make sure you use the skills of the agents operating in that 80% sales level. How do you find out. Ask them and then get them to back it up with facts. You will be glad that you did!
Gavin Jones Yes you are
Gavin Jones
Yes you are correct...the trouble is the good ones, like good cars sales men are few and far between.
Another important thing to look for is an agent who has been around for 20 yrs or so...and a history of steady and consistent.
Well said Gavin. Unfortunately most
Well said Gavin. Unfortunately most people look at the commission as a cost rather than an investment in achieving the best possible price from the market. Also alot of people feel uncomfortable when dealing direct with the vendor and would rather deal with a 3rd party ie an agent. I have read many comments above and they appear to be from buyers who lets face it "we are all trying to buy a property at the lowest price we can" and so they feel the auction process is in the favour of the agent and the seller. And so it should be!!
However many readers above must realise that an auction is a process not an event. Russell stated that B&T sold 147 auctions from 337 in total for the month of August. 47% is a great result for B&T and to find 147 cash unconditional buyers in the space of 3-4 weeks is awesome. However did Russell measure over the next 4 weeks how many of the other auctions sold as a result of the auction process? Has Russell measured how many new listings were listed in the same month with B&T and how many of those have sold within the same time period. Ii can answer almost comfortably it would most probably be well under 5%!
And yes like all industries you have the good and the bad! I suggest you do your due dilligence when selecting an agent and agency.
What is the first question
What is the first question you ask the real estate agent when ringing about a house you are interested "What sort of price are they looking for?" and they always answer it. So stop fooling yourself (or being fooled by Harcourts and others) that "no price tag" as a concept even exist. It is just poor quality real estate agents who actually don't understand their own market. Find one that does!