Vendor's Message from Milton Rendell - February 2018
Well we are into a new year, kids are back at school and most have had a holiday so we will see slow changes going forward. The talk is positive but at this stage we are only seeing small changes in our market. Vacancy rates for rentals have certainly improved to what they were a year ago which will encourage investors to return more in the future.
Our finance division Plus Loans has increased activity with inquiry stronger which is a good indicator. Doubt creates uncertainty and there has been some of that for the investors in recent times. Landlords have had a hard last year where their properties had become vacant, properties were taking longer to lease and rent returns were down depending on location. A number of investors with interest only loans have also had the pressure of the banks not allowing the interest only loan to continue and now have principal and interest loans so that has affected their cash-lows in some cases quite dramatically.
Talking with two of our landlords recently their repayments have increased by over eight hundred dollars a month so they were experiencing enormous pressure. The talk is that interest rates will remain the same potentially for this year which is good for many of us.
Now the common question I am presented with is prices and where are they going? With low inflation and low confidence, prices generally remain the same or decline as confidence lifts which we are seeing small traits of now, the possibilities of a sale do improve. In the last few months we have seen increase in some of our open numbers dependent on the location.
Every property has its own story which can influence the sale outcome as well, which I’m not sure everyone understands, circumstances do determine outcomes. As a seller you may have an offer on another property which will give you greater urgency to sell, others maybe a down grade because of health issues and others maybe testing the market and this type of situation of low motivated sellers can have a negative influence on outcomes in a market.
As they can be over priced and can give other sellers the wrong message on real value in an area when doing comparisons. Sales evidence is the greatest guide to what buyers are prepared to pay in any given market. Your personal goal is the key to a sale working alongside your agent, communication between agent and seller is very important and keep in mind as an agent we don’t always tell you what you want to hear.
In life, we have a choice to be honest or lie I guess and avoiding the bad news that needs to be delivered is in many ways a form of lying, so don’t shoot the messenger it happens too often and in the case of the negotiation it may affect the outcome. We need to remain as neutral as possible when negotiating so we can keep a clear head.
Conditions of a contract can be as important as the actual amount to ensure a simple transaction and no loop holes, as well as, everyone understanding the contract. Presentation of the property is essential when selling. Buyers only see work in what hasn’t been presented well and their offers can reflect that.
2018 we see as being more positive in terms of potential results in sales occurring. We have seen an improvement in leasing and the indications we are seeing a few positives happening in the Western Australian economy and mining industries.
Patience is required in any market as well as strong communication. Meeting the market is again the same in any market, the buyer must see value otherwise they don’t buy. In thirty years of real estate the basics have not changed and won’t change going forward.
Everyone wants to feel they have won and that their goals can be achieved. Thank you for your support in the past and we look forward to assisting you in the future with your goals.
Milton Rendell, Chief Executive Officer – Real Estate Plus