O'meara Property

Many inexperienced  residential property investors start talking about selling their investment property when the market slows down. After all, the market is bad, therefore it’s time to get out of the market – right?

Wrong!  Is the investor going to realise a good return on their investment by selling when the market is slow? Of course not!  Shrewd investors – whether they invest in the stock market, antiques, art or property – have a more fruitful strategy. When the market is low is the time to borrow more money and buy a second property. Selling now will be a poor return on their investment, but buying now means greater rewards when the market does improve. After all, experienced investors know that the market is cyclical They know that when the market is hot is the worst time to buy as buyers tend to outnumber sellers and they end up competing for stock that is snapped up at alarmingly  increasing prices.  In fact they may well profit from the faulty logic of the inexperienced property investor by buying the very investments being dropped onto the slow  market by the less experienced who think property is no longer the go.

When the market slows down, the smart investors speed up, so that they are expanding their property portfolios when the market is in their favour inorder to be sitting pretty when the next boom comes along.

2/80 Bagnall Beach, Corlette,
Duplex / Semi Detached For Lease – $350

Neat and tidy three bedroom duplex with ducted air conditioning, located close to shops and schools. Freshly painted and carpeted, with a single lock up garage and a low maintenance yard.

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6 , Salamander Bay,
House For Lease – $410

Large three bedroom family home located in a sought after cul-de-sac. The property has an ensuite off the main, spa in main bathroom and third bathroom of the triple garage. There are views to the heads from the large balcony and the bush at your back door.

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17/19-23 Dowling, Nelson Bay,
Townhouse For Lease – $290

Two bedroom apartment located in a centrally located complex with a swimming pool and tennis court. It is on the first floor with a balcony overlooking the pool, spacious bedroom with built-in wardrobes and a single lock up garage

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There is a lot of misunderstanding in many sections of the community about the use of Public Auction as a mop-up marketing strategy. Many home owners think that Auction is a great ‘last resort’ selling strategy – the ultimate eraser of past marketing mistakes and righter of all poor decisions made in their earlier Private Treaty marketing.  While it is true that many vendors go to Auction after failing to sell by Private Treaty, it is not hard to work out the flaw in this argument.

Vendors often think they will try to market their property by Private Treaty at an  inflated price just to see what happens. When asked for an explanation, many say ‘Oh, if I don’t get my price I can always auction it.’ But what happens at Auction when months of marketing at an inflated price haven’t secured the dream price the vendor was looking for?  

Sadly, by the time the vendor has given up on Private Treaty, the property is likely to be over-exposed and it will attract bargain hunters, no matter what method of sale is used.  Valuable time has been lost, and unless the market is trending up, the sale price is likely to be lower than if it had sold more quickly.

Once a property has been on the market for a long time, buyer interest falls.  Auctioning at this point rarely creates the competition needed for a high price.  Buyers know the vendor is unrealistic and often stay away from the auction – a death knell to hot bidding. The best case scenario is that the auction will attract bargain hunters – another great way of keeping the price down.  

In reality, no method, used as a last resort, will deliver optimum results. Holding out for an inflated price, no matter which marketing method a vendor starts with, will usually end  badly – no matter how good the ‘last resort’ selling technique of choice is. There is no safety net fix-it strategy for selling over-exposed properties.

Whichever method a vendor chooses to sell their property, it is important they do proper research into the market in their location and set the reserve (auction) or the asking price (Private Treaty) so that the property sells within the first month or so of marketing. ‘Last resort’  options shouldn’t be in the vocabulary of a home seller who wants to get the highest price for their property and they certainly don’t replace realistic response to market conditions and a firm hold on the reality of price expectations.

2/105 Government, Nelson Bay,
Duplex / Semi Detached For Lease – $270

This spacious two bedroom upstairs duplex has just been re-painted and had new carpet and vinyl installed for the new tenant to enjoy. The property has large living areas, sunny balcony and shared laundry facilities. There is also off street parking and the rent includes lawn and garden maintenance and water usage.

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16 Harbour View, Boat Harbour,
Duplex / Semi Detached For Lease – $375

Spacious three bedroom duplex with breathtaking views over the ocean from both the upstairs and downstairs balconies. The property has a large main bedroom with walk in robe and ensuite, modern kitchen and double garage with automatic opener. The property will be freshly painted prior to new tenant moving in.

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Knowing how to tell whether the market is starting to change  – whether it’s trending up or down – can help purchasers determine how to go about their property search.

If the market is getting weaker, then they have more time to buy without seeing prices getting away from them. When it’s getting stronger, many wish they had tried to make up their minds sooner to avoid missing out or paying more. So what are the signs of a market on the move?
 

Trending Up:

If the market is trending up (i.e prices are likely to rise), watch for:

• Properties that have been on the market for a long time are selling.
• Increased attendance at Open Houses.
• Increased bidding at Auctions.
• When you ring an agent about a property, you find they are already sold or if you ring back to make an offer you find that someone else has got there first.
• Even really challenged properties are selling.
• Sales at auction go above the reserve set by the vendors.
• Gazumping is occurring.

Trending Down:

Conversely, purchasers can take their time if the following signs of a market slowdown leading to lower prices are occurring. Watch for:

• Little interest at Open Houses
• Many of the properties for sale have been on the market for a long time
• Auctions have no buzz and bidding seems to proceed very slowly
• Auction prices falling below reserves set by vendors
• More properties passed in at Auction
• Properties selling before Auction

33/1 , Nelson Bay,
Unit For Sale

A Penthouse apartment, fully self contained is up for grabs! Being the only one of it’s kind on the market in the complex, this 1 bedroom suite is a must see and must buy opportunity. Recently refurbished and centrally located to Nelson Bay Shops, Marina, Boat Ramp and RSL club. Why wait till auction day?

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