Home sellers turn to post-auction negotiations as market cools

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“With, obviously, our market normalising, the buyers are very conscious of seeing social proof. That just leads to that hesitancy,” he said.

“Everything is about expectations. The vendors who have high hopes of knocking it out of the park … they set themselves up for disappointment.

“Those who are happy to meet the market are moving their properties on a lot quicker.”

Sellers whose expectations are in line with buyers are more likely to strike a deal.

Sellers whose expectations are in line with buyers are more likely to strike a deal.Credit:Stephen McKenzie

He advised sellers the offers now might be better than those forthcoming in another month’s time – and he reminded cautious buyers these weaker market conditions are what they have been waiting for.

Melbourne home values fell another 1.2 per cent in August, CoreLogic figures show, and are 3.8 per cent lower over the past three months.

Prices are expected to keep falling as interest rates rise, and next week the Reserve Bank is tipped to lift the cash rate for a fifth straight month.

Rob and Heather Crowhurst sold their Cheltenham home of 22 years after auction in July, and despite the stress of the process, were happy with the result.

Rob Crowhurst’s Cheltenham home passed in at auction in July but sold within four days.

Rob Crowhurst’s Cheltenham home passed in at auction in July but sold within four days.Credit:Simon Schluter

Although no bidders raised their hands at auction, four offers were forthcoming afterwards and the home sold within four days.

“A lot of people don’t like to get into a bidding situation, especially now the market eased off,” said Mr Crowhurst, who is retired from the manufacturing industry.

“If someone started, it could have been different, but no one wanted to start.”

Their agent, Ray White Cheltenham director Kevin Chokshi, received one post-auction offer that was subject to finance.

Then more buyers wished to inspect the property the following Monday and Tuesday. Four offers were made, including one $50,000 above the reserve price without conditions attached.

Chokshi has noticed a fair few auctions passing in and selling after, but said the auction date creates a deadline, in a way the private treaty process does not.

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“The auction is creating a trigger for them to go, ‘bang, let’s make an offer’,” he said.

Or, if it doesn’t sell soon after: “That should trigger a price change for the seller.”

Reside Real Estate senior sales consultant Nathan Gleeson said in the weakening market, some buyers are waiting to see what happens after a property passes in.

Others do not have their finance arranged and cannot bid under auction conditions, he said, as there is no cooling-off period for auction sales.

Or they may not want to be too quick to disclose their budget to a vendor, he said.

“Sometimes they are playing it a little bit too cool,” he said. “If there is one interested party, and no one [else] sticks their hand up, they won’t bid.”

Westpac senior economist Matthew Hassan said the rising cash rate had accelerated price declines that were already happening in Melbourne and Sydney due to stretched affordability and rising fixed mortgage rates.

He believes Melbourne is 20 to 30 per cent of the way through its market downturn, and has forecast a peak-to-trough decline of 18 per cent.

Hassan said post-auction sales showed there was still solid buyer demand for properties priced correctly.

“It may be an indication for sellers that are prepared to move on price, that they can clear the property,” he said.



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