Surf’s Up For These Coogee Buyers!
The client
A local Coogee couple who were looking to upsize from an apartment to a house. It was time to move out of strata living and find the ‘forever’ home.
Both busy working professionals plus a little one keeping them on their toes, they were keen for a short property hunt.
The engagement
These clients had inspected the property twice themselves when they put in a call Monday morning to ask my advice. The property was scheduled to go to auction 2.5 weeks later.
They absolutely loved the property and were keen to avoid an auction scenario. They were about to put in an offer.
I talked them through a strategy and game plan that would give them the best chance to secure the property prior to auction. It also meant not putting in an offer immediately. They were on board, and I officially came on board to negotiate on their behalf.
The property
Just a short walk to the sunny sands of Coogee beach, a beautiful semi that had been thoughtfully renovated. An easy floorplan for family living with fantastic outdoor area. It also includes a double car space which is a really rarity amongst Sydney’s eastern beaches.
With precedent set by the neighbour to renovate upwards in the future, the property would also unlock water views of Coogee Beach.
The negotiation
People often think that buying real estate is just about price. It isn’t. It’s about everything that is important to the vendor, the buyer, and knowing how to put a deal together. I also think “How can I make it as easy as possible for the sales agent and the vendor to say yes"?”
In this case, on the Monday (the day my clients hired me), I worked through the comparable sales in the area. This helped to guide them on fair market value and also our strategy of where to start the negotiation.
I spoke to the agent to understand where his clients thinking was at, and where his other interested buyers were at.
The vendor was open to selling pre auction but needed to get through the scheduled Thursday open home to believe they had enough feedback.
There were four other potential buyers in the mix (two more serious and two probably not serious contenders)
The building report was reviewed and the contract reviewed. Solicitors had agreed changes. My clients had given me instructions on price. It was go time!
The outcome
Thursday mornings open home went ahead as per the agents guidance. As the agent was driving away from the open he called me and we spoke about next steps.
Our offer was formally submitted Thursday lunchtime. We had to strike right in the zone of:
High enough to get the vendor to accept and sell pre auction;
High enough to eliminate the competition (at least making them think we had more in the tank if needed);
As low as possible to ensure my clients were still coming in at market value
It also wasn’t just about price. It was about settlement date. The vendor had purchased elsewhere and was keen to line up their settlement date to avoiding any form of bridging finance (which is very costly). We had flexibility on our side and agreed to their specific settlement date.
The agent knew we were serious buyers and not messing around.
By 7pm Thursday evening (just 3 days after my clients first called me), we had exchanged contracts and my clients had purchased their dream home!!!
Our offer had hit the bullseye - we satisfied the vendor, we knocked out the competition, and I believe we purchased for circa $100,000 - $200,000 less than what it might have sold for if it had gone to auction.
Learnings
You might wonder how it could have sold for more if it had of gone to auction. Here’s the thing:
By purchasing in week two of a campaign you knock out anyone who hadn’t yet seen the property, anyone who didn’t have finance ready, or anyone who just wasn’t getting organised because they believed they had more time (until the auction).
At an auction when people see other people bidding, they feel physical pressure of those around them to keep bidding. People get emotional and excited.
When an offer comes in before auction, people often think the sales agent is lying, or trying to get them to pay more. As a result, they tell the agent they have no further interest, even though they do.
