This was the profound question asked by a visiting, overseas, real estate expert who was looking at property for sale advertising in Auckland recently. Everywhere she goes she checks out the local market but she could not understand why we have chosen to hide our property prices so carefully.
When the market was a seller’s market auctions and tenders were popular because competition may have been helping sellers to get ever-increasing prices. Now we have a buyer’s market across many price brackets and locations around Auckland so why are we still seeing auctions?
Buyers usually have a finite amount of money they can spend on a house so focusing their attention on the houses they can afford just makes sense. But with prices being such a secret what chance do they have to be focused?
What amazes me is that not only are prices being kept hidden from buyers (even if it doesn’t sell at auction it is listed as “By Negotiation”) but in many cases it is also hidden from sellers. Appraisals for properties you would expect to find around the median price are often showing a price range difference of $100,000.
This is extraordinary when there has never been more price data available and more analysis being done. In most cases of average homes in average locations experienced buyers can set a considerably narrower price band.
Isn’t it time that the real estate industry remembered that buyers are half of every transaction and that making pricing as transparent as possible will allow buyers to make buying decisions more easily and thus ensure that sellers are able to sell more quickly? A win-win for everyone surely.
A warning for buyers
The flooding over the past few days has been devastating for many people in Auckland with homes damaged by water and slips. Sadly, with global warming we will be seeing these extreme weather conditions more regularly and “once in 100 year” conditions becoming more common.
When you are considering buying a property you need to know if the property is at risk of flooding or slips and the property’s file at Council should contain this information. If you obtain a LIM report for the property it will include any known problems.
Now that the urgency has gone from the market buyers have more time to get a LIM report if it is not provided by the seller and to talk it over with the Council as well as your lawyer.
Banks are already looking more closely at LIM reports and I expect more loans to be declined on properties in areas which are prone to flooding.
Be careful about where you are considering buying and get as much information as you can before making any commitment.
Advising Auckland property buyers