Mysteries of the Universe

The universe is too massive for most of us to be able to comprehend it’s size. It is no wonder then that it should have many mysterious and hidden complexities. Many of which, despite much pondering and analysis, would seem never to be solved. Certainly not in my lifetime.

One such mystery is the inverse relationship between the salesperson’s knowledge and promotion of features and benefits, and the price of a product.

If I set out to buy a fridge, or a TV, or even a car, I can have an eager salesperson explain at great length the features and benefits of this $500 or $5,000 or even $50,000 purchase. They will tell me how this potential purchase makes ice, defrosts itself, beeps at me when I leave the keys in it , parks itself and more. Often the “at great length”  is actually ad nauseum.

Yet when we start talking a $500,000 or even a $5 M property, even obtaining the basic details, let alone features and benefits is very often amazingly difficult. Features and benefits are almost never actually volunteered. Common sense would have one thinking that a significantly larger sale would warrant some investment on the part of the salesperson in defining and explaining the features and benefits to a potential buyer.

But, it seems that even my $10 purchase at the local chemist warrants more sales pitch than the average $1 M property. A mystery indeed.

Perhaps forward thinking real estate agencies should recruit from the nearest Noel Leeming or Unichem rather than the University property school?
 
MARKET ACTION
We are still seeing significant activity in the marketplace – albeit much of it off-market rather than through vendor funded campaigns. Those agents prepared to use their contact lists and shoe leather are still coming up with listings, which can be quickly converted to deals.

At Expedio we continue to have a steady stream of deals concluded, and thank those agents who have worked diligently to get them across the line.

With the volume of activity, and deals, in the marketplace, we are experiencing some fundamental shifts in emphasis. Obviously lower interest rates are encouragement to numbers of (particularly) smaller businesses to purchase their own premises.
Values being achieved are encouraging numbers of owners to consider selling.

But part of the value changes becoming very evident are:
·        Secondary premises that need money spent on them are very divergent in value from modern buildings. With the construction boom, the costs of refurbishment  and remedial work are increasing faster than the price of a Grey Lynn villa.
·        As immigration continues at it’s current pace, and moving around the city becomes even more difficult, locality is increasingly important, as is parking. Whether the mayor’s plan for a rail link between Britomart and Karangahape Rd  proceeds or not, workers in Manukau will still commute by car and need a place to park.
·        Excess office space is a liability. There was a time when more office ( at higher $ per square metre rates ) meant that a building rented for more. We are now seeing excess office as a liability, and generally worth less than warehouse space – or even worth nothing.

Which all  adds up to a need to analyse deals from multiple angles to ensure they are compatible with not only current, but also future, needs.
 
THOUGHTS ON AUCTIONS
There are certain agencies who aggressively promote auctions as the way to maximise price for the vendor. However, just as with that other oft promoted industry lie  “the agent works for the vendor”, it’s somewhat self serving and often hides a fundamental laziness.

What is often not highlighted to the vendor is that an auction is a way of acquiring a sole agency by subterfuge. And while the “get all the buyers in one room and let them fight it out” story line is promoted as a justification for auction, what it hides is the reality that there will always be potential buyers who cannot buy at auction because they need finance  approval after a conditional contract is signed and / or those who will need additional verification (such as valuation, building reports and IEPs) to support their funding application.

Unfortunately the widespread practise of agents under and overquoting also brings auctions into disrepute. Too  often we see agents overquoting to vendors , to secure an agency, and then underquoting to buyers, to get them along to an auction. What this does is just bring the trustworthiness of all agents into disrepute. In a segment of the industry that is about numbers, rather than emotion, it seems rather short-sighted that agents would think investors would be swayed by the heat of auction room fever.

We are also seeing an increasing tendency for auctions to be held distant from the actual property. Is this for the convenience of the vendor, the auctioneer, or indeed the agent? Certainly not for the convenience of the investor who pays the bills. We await the real breakthrough when a South Auckland property is auctioned in Sydney!

All of which adds up to a case that often an auction is not the way to maximise a selling price. An auction may be a way to achieve a high price. But certainly not the highest price.
 
NEED BETTER PHOTOS FOR YOUR MARKETING?
We have sitting in our office a brand new Canon EOS 700D Camera as an added bonus for the agent who leases 8 Lambie Drive. It’s a digital SLR Camera with a twin lens kit that retails for $1150. It has a warranty, software, and even an instruction book. All you have to do is successfully lease 8 Lambie Drive, and it’s yours.