A real estate agent is chosen

We settled on an agent to sell our house. Gardiner and McInnes valued our house and suggested it be advertised within the range $300,000 to $350,000. This was disappointing. We had undertaken huge amounts of work on this property over the years. The garden was an oasis, we had enlarged the usable area of the land by building retaining walls, and some of the interior fittings were well finished. Overall it was a very nice place. We thought the agent might have come back with something like $360,000 - $390,000; particularly as we had been watching the market in the local area. They also quoted $700 in advertising costs with a possible all up bill of $3000 for the works, with their commission being between 2.5 to 3%. This was all so disheartening.

We also eventually heard from Landfield real estate. They thought our house was worth between $400,000 to $450,000. That’s too much! I think they were just trying to get us as a customer. With this property facing a main road a big for sale sign with their name on it would have been wonderful advertising. At that price the sign would be there for eternity.

So, with some recreation leave lined up it's on the road again, and a trip to Melbourne.

Auctions

Canberra seems to have a lot of property auctions. Personally, I don’t like auctions. I think they are dodgy at the best of times. My experience noted in an earlier post is an indication of that. From what I’ve spotted in the newspaper it appears as though Hooker has more property auctions than any other real estate agent.

I’ve been to a few auctions in my time and the auctions vary from one industry to the next. The government occasionally auctions of its disused equipment. There may be some bargains to be had there. I’ve bought quite a few motor vehicles at auction. Some were lemons, but then I got some beauties too. I’ve been to diseased estate auctions and factory auctions following bankruptcies. They all have a different flavour, and attract different clientele, and the mood varies between each of them. Some are exciting to attend but others are so boring. The first rule of auction: fix your limit and be prepared to walk away empty handed.

In my experience, the biggest auctioneering cheats were at car auctions. I was at one many years ago and I badly wanted a particular car. I had in mind just how much I wanted to pay for it, and bidding was well below that mark. I was in the race. What I didn’t know was that the auctioneer no doubt had a friend in the crowd or someone who had passed a bribe prior to the sale which influenced how events unfolded during the bidding. The bidding was in relatively low dollars, so I began to push myself forward through the crowd. Just on the first call I spoke up with what I thought was a clear “yes” to indicate my interest. I was on the front row when the auctioneer called for bids a second time. I had my arm above my head and called out “yes” again. How could I not have been heard? On the third call I was waving my arm around madly and I yelled at the top of my voice, only to hear the auctioneer call the sale at the original price to the other guy. I confronted the auctioneer, who claimed he didn’t see or hear me. The auctioneer had no trouble spotting me later in the day when he sold me another that wasn’t a patch on the first. Second rule of auction: get noticed early, and the eyes of the auctioneer will return to you. On this occasion I think the auctioneer was corrupt. How can anyone not notice anyone dancing around and yelling in front of your face? I hope he was embarrassed by his action.

I have heard that some auctions, where few people attend; particularly where specialised equipment is being sold, that interested buyers get together prior to the sale. There is generally a viewing period prior to the auction. If the items for sale don’t attract much or any interest, and if you happen to know the people who are interested in the sale, and if you happen to mention how much each item might be worth to you, and after some discussion you can work out ahead of the auction just how badly each of you want particular items, you might be inclined, through an arrangement with those other bidders, to hold off in bidding for those items, and so let your friends have those items at a very low price. This favour only works when they reciprocate and let your minium bid be the winning bid for an item you are particularly interested in buying. The auctioneer may well see what’s happening, but what can they do? If they are selling the items on behalf of a company and there is no reserve you have got some bargains to take home. But sometimes the auctioneer has an interest in the property and may apply a reserve to stop this tactic.

I had a house that was auctioned in Tasmania. It didn’t sell at the auction. I stood and witnessed the auction. That was a scary experience. The auction was held inside the house, so we stood at the side and watched. There were about a dozen people, the auctioneer and assistant. I was almost shaking in anticipation, and can understand why the owners tend to wait in another room. It’s nerve-wracking. I was sure the house was going to sell by the way the auction was progressing. The auctioneer was going furiously, once the auction started. The bidding was reasonably fast to and fro between the different bidders. And then it was passed in. I was confused when the auctioneer told me there was only one bidder. The other bidders were plants by the auctioneer who were pushing the bidding up. I couldn’t spot the fake bidders from the real ones. I had no idea this was happening, didn’t know it was going to happen. It was a beautiful con job that failed to pull off anything.

A most unusual auction

I had a look at Queanbeyan. There seems to be an older part in addition to some newer areas. Some of it looks really ordinary looking, or is Canberra turning me into a snob. Very close by were some spectacular spots in Dodsworth and Ridgeway. Million dollar properties some of them, no doubt. I went to some open inspections in Jerrabomberra. What a name for a suburb. Large houses with prices to match. Some of them nearly take your breath away in the way they have been built and fitted out. I called in at an auction that happened to be about to start. I was first there, and had a chat to one of the agents.

On the way through the door I mentioned that I’d be a spectator only, and asked the price that the property was expected to bring. “Mid three hundreds,” she said. It was a very nice place, enhanced by the modern furnishings, if not a bit cramped inside, and the building almost filling the block completely. Anyway, while waiting for the auction to start, I began chatting with a couple of people outside, and mentioned the morsel of information I got from the agent. I was unaware at the time that this particular couple would buy the property. It was one of the most unusual auctions I’ve ever witnessed.

The auction began in the usual way with the auctioneer running through various attributes of the property and as far as I could tell seemed just another ordinary property auction. It’s the events which followed that surprised me. There were about three other agents on site in addition to the auctioneer, and they, along with a small group of perhaps ten or so spectators gathered on the small patch of lawn to the side of the house. There was only one interested buyer, as it turned out. Or rather, there was only one individual who was vocal at the auction. No one else showed any interest in bidding.

The bidding commenced at $300,000 with this chap calling out his bid. There were no subsequent raises in the auction despite the auctioneer’s usual banter of talking up the property. It appeared that this person had turned up to the auction and had no opposition. To me this is an ideal situation: it keeps the price low. And if the property gets passed in at the end of the auction, the highest bidder generally has first rights on negotiating a price, in private. Which also, is an ideal situation for a buyer. It has been known for properties to fail to sell at auction and subsequently sell at a lower price. The reverse also occurs.

So, here we are all gathered at this auction and there is only one bid, and that bid is for $300,000. One of the sales team approaches the bidder and speaks to him. I’m a little too far away from them and I don’t hear everything that was said, but I did manage to catch a comment by the sales person along the lines of, “…so you will be willing to raise your offer by $30,000.” This whole process took about three maybe four minutes; which is a lot of time to be standing around in relative silence. I thought this was an auction and not some badger-the-punter session.

My first reaction was wondering what this sales person was doing speaking to this guy. I’d feel inclined to tell them to get lost. My second thought was over the word “offer.” This guy didn’t make an offer on the house; he made a bid at an auction. Perhaps I’m splitting hairs, but it did seem mighty strange.

Anyway, this sales guy goes back to the auctioneer and whispers in his ear, to which the auctioneer immediately addresses those assembled, but to the bidder in particular. The auctioneer immediately asks to hear the new amount as a bid. And sure enough, like the little sheep he was, he responded with, “$330,000.”

This guy had just bid against himself. This was stupid, was my first reaction. This was outrageous of the agents to push this guy like this. Of course, the property may in fact have been worth a whole heap more than this amount. So, perhaps bidding against himself was no great loss. On the other hand he has just committed himself to another thirty thousand that perhaps he may not have had to put up. This guy doesn’t know the sellers situation. Perhaps the seller was in urgent need to sell; perhaps the property had to be sold on that day to get out of some financial trouble. We don’t know that possibly the seller had instructed the auctioneer to sell it any price, just get rid of it.

Having just bid against himself, the same salesperson approached the bidder again. Another prolonged discussion took place. Further delays as sales folk disappears inside the house. Possibly the owner was inside and they were seeking instructions from the owner. They come out for more discussions with the bidder. They troop back inside the house again. This would be funny had everything been captured on video and sped up like an old Keystone Cops silent movie.

Then finally they emerge and the figure $363,000 is announced by the auctioneer. The bidder acknowledges it. Then as quick as a flash, as though allowing no time to retract the bid, a mighty fast, “first call,” and without pause for a breath, “second call,” and immediately, “third call, sold,” exploded from the auctioneer’s mouth. It was all over

Unusual practice at best, more like a con job to me.

Private sale or no private sale

Now there's a question: to sell your property privately or go through a real estate agent.

At home, the Landfield real estate didn’t call by as expected. So, we chose another agent. That’s the way it goes. In many ways your life choices are not made as a result of careful weighting of the pros and cons of something; those of agents in this case. It was more about who was there at the time. There’s not often a lot of personal experience people might have on which to base a decision.

In actual fact, with this property being located on a relatively busy road, I was inclined to sell it privately. I was thinking of doing little more than sticking a sign up on the front and waiting for the punters to call. Real estate agents don’t have your best interests at heart. Well, of course they don’t, they are in the business for the money. The best they can do for you as a buyer is put you in contact with sellers, and you have to resist being influenced by anything that might sway you from your goals, like paying more than you want. The best they can do for you as a seller is bring in the punters, and you have to resist their persuasive tactics of lowering your asking price.

I’m reminded of a Canberra real estate company, though the name escapes me for the moment, that had a really obscure advertising strategy. They were aiming their advertising at property owners. They said that they consistently obtained higher sell prices than any other agent for equivalent properties, and this was the reason you should use them rather than any other Canberra company. Hmm. Sounds like a great thing if you are selling your property; we all want as much as we can get. Suppose you are shopping for a property. The slogan doesn’t sound nearly as good. Why would anyone want to buy through an agent that boasted of fleecing its punters?

There is quite a lot of information, on the web, and books that specialise in selling privately. Basically, the main reason for not doing it was that I was in Canberra and S was in Melbourne with the house. It may have been awkward. If you have time to browse some of this literature before deciding how to sell it will be worth your while. There was one book I had a look at, which was quite interesting to read, particularly some of the experiences some agents get up to. It was a real education. It described various scams real estate agents have used to squeeze more money out of a deal, and how to go about selling privately. If I can find it I'll edit the post.

Walking is faster than email

My brilliant idea of taking a lot of happy snaps of the properties that might have potential and emailing them home turned out to be less than satisfactory. I think it’s pathetic in this world of computers that I’m being driven to use snail mail.

I took about a hundred photos of a property that caught my eye. My plan was to move in and around every room, hallway, carport, shed and drainpipe putting together a virtual tour of the house in the form of photographs. It actually takes a surprising amount of time to do this. I would then email the lot along with a few comments. The size of the file didn’t break the email, but it just refused to go. Too big, was the smug response from the computer (actually, the company mail server). I tied splitting the stuff into a lot of smaller files, zipped in various ways, but still too big. I gave up, and copied everything onto a disk, and let Australia Post do its trick.

Sometimes I get really fed up with the way organisations run their IT infrastructure, and this is just one example. One of the companies I had an association with had a contract with DHS, a state government department. Both had offices very close to each other, being just one city block distant. Anyway, this company was bought out by GE, an American company with tentacles all over the world. As part of restructuring its new acquisition, email was routed through GE’s network, which meant that sending an email from one Melbourne city block to the next Melbourne city block went via USA.

We become accustomed to email being relatively fast, but with this company change sometimes email took several hours to be delivered. When time was important sometimes it was more efficient to walk across the street with an envelope in hand, to their offices, and hand deliver the mail rather than using email. Pass the ink and quill, please, it may be quicker. While I’m in the mood for it, another example comes to mind.

The first personal computer I used at work in 1986 was in fact a Mac. (Mainframes were generally all the go, but they could be cumbersome.) The Mac was on a trolley so whoever needed to use it could wheel it from one office to the next. MS Works was the thing at the time, and to get it going you shoved in floppy disk and I think you could save your files to this disk too. There was no hard drive on this machine.

Then the developers of MS Works added bits and pieces to the software, and the new version of MS Works resided on two floppy disks. So, whenever you needed to use a function that it couldn’t find on the disk you currently had in the machine, you’d be prompted to swap disks, and swap disks, and swap disks. It’s not such a bad thing to improve software, but I hate the tradeoffs you get lumbered with. Your computer gets filled with stuff you’ll never use and it slows everything down in the process.

I have broadband on at home and it seemed great, at the time, when it was new to me. But it doesn’t seem great anymore. I have this feeling that about 10 years ago my old dialup modem used to access web pages and paint the screen at about the same speed as my broadband does now. I can’t help wondering about all the ancillary software that web pages come encumbered with that everything has slowed down again.

Presentation

Presentation is important when you’re selling your house. Don’t people know that? A coat of paint where it’s needed can do wonders to a place, which gets back to my ‘make it sparkle’ notion, but for heavens sake, do the job right. If your window frames have weathered, a coat of paint may brighten them up. Here’s the important bit: if they need to be sanded – then sand them, undercoat them, paint them properly. If there are a few pits in the woodwork – fill the holes with putty, sand it back, and paint properly. If the wood is rotten or so badly weathered that it looks and feels like a sponge then rip it out and replace it before paining. A coat of paint over rotten timber looks like the rough job it is. When I see it I tend to wonder what other botched jobs have been done on the house. This type of work does nothing toward presentation.

A possible contender

I arranged to have a look through the house at Evatt. It was good of the owner to allow me through. I brought my camera with me and took swags of photos to send to S in Melbourne. She seemed to be getting excited over it, as though this house was the ‘one’. This property was a bit rough around the edges, but it was also the first house I’d seen with a decent sized yard. It also had a good sized shed, with plenty of additional parking, and it had a relatively large kitchen. The lounge was a strange shape, main bedroom small, very ordinary bath rooms. It had a wood heater upstairs; now that’s an odd design feature. Heat rises. Wouldn’t you want to have the heater on the lower floor, and bringing firewood inside would be a pain. It was also in very close proximity to HT power lines. The views were okay, but not great, mostly looking out over other houses form it’s slightly elevated position.

Showing your hand

I came across a place in Evatt that was up for auction. I’m spending a lot of time driving around the suburbs. With the street directory in hand, steering wheel in the other, I’m slowly ambling along the quite suburban streets looking at the lie of the land, looking at the houses, and the environment. Just getting a feel for what’s out here. I think it’s all very well to check out the newspapers, but until you drive down the street and see the neighbours fighting over the side fence, see the houses with dumped car bodies or engine parts in the yard, and eye the cheeky looking kids (and adults), and depending upon what you see you might mark the suburb as one to avoid or one to keep an eye on if any new properties come onto the market. This detail can’t be picked up from newspaper ads. I’ve been marking my street directory by pencilling circles around streets or areas that I think might be nice areas to live, should something come up. It’s also good to note things you spot in the newspaper, that you might otherwise forget, like suburbs where the mobile phone coverage is poor, or where broadband hasn’t reached yet.

I was driving in Evatt, as I said, and was noting the auction details from the for sale sign of a house I spotted. As it happened the owner was tidying up the yard and he came over to chat. He must have spotted me making some notes. He said he’d bought a place interstate and had to sell this house, and invited me in to have a look around. I declined, saying I’m not ready to buy, which was true. Our house wasn’t on the market yet. He said his house felt like a millstone around his neck. (To me, this is like telling me he was desperate and might well accept any offer. I think it’s a mistake to say anything like that if you’re selling. I don’t think that sort of information should be told to anyone, including your own real estate agent.) It was a nice looking place. With the details duly noted, I’ll return to see how the auction goes. Could this be my new house; with the benefit of this ‘insider information’ I might get a good deal.

Real estate hunting

One of the difficulties in coming to grips with a new city is getting to know where the various suburbs are located, and their relative position to one another. In one of my early scans of the real estate section of the newspaper I spotted a house that was very reasonably priced, and generally sounded quite good. It was a definite contender, or at least it was until I spotted it on a map. My failing was that I didn’t realise that Bredbo was a small township about 80km south of Canberra and not actually a Canberra suburb. Any local would have known this.

My Saturday mornings developed into a routine. With my lack of experience of the Canberra layout here’s what I found worked well in making a few property visit open inspections. I got up early and grabbed a copy of the Canberra Times, which has an excellent pull out real estate section, and with a notepad and street directory in hand spread everything out on a tabletop, usually with some fruit toast and coffee to help get me through.

1. Mark the properties that you clearly want to visit by reading the ads. Isn’t that what you do anyway.
2. On a page of the notepad, make very brief notes of the advertised properties, and be sure to include the address, inspection open and close times, and page number that you saw the ad. (you can seldom find the ad after you have closed the paper, and you usually only want it when you are in a hurry.)
3. Number each property on your pad sequentially.
4. Look up the street directory of each one, noting on your pad the map number and its grid coordinates. This saves you doing it later when you don’t have time and are a bit flustered. Doing this now makes the day much more pleasant.
5. Now comes the mildly artistic part. Street directories usually have an index page displaying the locations of all the individual map pages. This index map is essential for getting a bearing on where the properties are in relation to each other. Find that page.
6. On another page of your notepad, sketch an outline of the area you want to search for properties and mark the map numbers on the page just as it is on the index map of your street directory. This takes 30 seconds. If you can’t do it within a minute you are spending too much time.
7. Now, refer back to your first page of notes and mark on your sketch index map on your second page of your notepad where each property is located. Don’t write much. The property number you used and the inspection times may be sufficient. Try to do this as near as you can to being accurate within each map, but it doesn’t matter a whole heap, you just need approximates.
8. When you have transferred your brief notes to the even briefer notes on the sketch map, sit back and have bite of your toast, sip your coffee, and consider what you’ve got.
9. Study the open times and their locations that you’ve got on your sketch map, and work out a sequence of visiting them. Doing this will prevent you from doing too much backtracking, keep your petrol costs down, and you might even see more properties in the one day.
10. When you’ve got a sequence worked out you might write it down somewhere because you’ll forget it otherwise. You might even like to draw arrows all over your sketch map.

This is just the sort of project that some whiz kid needs to develop on a computer to make the job simpler for the punters, but the method I’ve outlined works for me.

You could just scan the newspaper and if you spot something interesting just go and look. There’s nothing wrong with that, but if you are like me and want to see as much as possible you’ll need to get a bit more efficient. The last thing you want is to be doing is wasting time looking for an address with only a few minutes to get to a property, or having to drive half way across town when you have only just been there an hour ago. Anyway, enough of this.

I went to another auction, this time in Evatt. It sold for $365,000 at the auction. Its great to see an auction go to the end and see it sold, rather than being passed in. The house was on a small block of land. It had a small lounge and dining room. It also had a small kitchen and family room. The bedrooms were a reasonable size. It did have a nice bathroom, but no bath. That seems like a contradiction in terms to me. There was a good deal of decking outside. It had a garage designed for a mini because part of it was used as a room! It was a well kept property but was just a very ordinary place, and small at that. $365,000 - house prices seem so inflated in Canberra, for what you get.

I had a look at Duffy and neighbouring suburbs. The occasional vacant block where houses used to be can still be spotted. A result of the bushfire, of course. It’s sad to see garden remnants, retaining walls, garden paths and steps at the front of the empty block that don’t go anywhere. The house was gone, just traces in the dirt where the foundations used to be. Though, it’s interesting to see the number of new houses in the area. And not just ordinary looking places either, but large, luxurious houses. I gather that some people won as a result of the fire, and by the look of some of those new houses did very well indeed.

I discovered the Woden shopping centre to the south of Canberra. Now there’s an unusual name for a place: Woden. I can’t help but wonder if the individual who coined the name had a speech impediment. I laugh to myself whenever I hear someone refer to it: “I wink I’ll wop wound to Woden wopping wentre to wet a woo wings.”