12 Mar When 'ugly suburbs' change and competeing with other buyers – Charles Tarbey and Meighan Hetherington
We catch up with the head of Century 21 – Charles Tarbey – about the suburbs that are sometimes called the ugly ducklings but have the potential to be swans. He tells us where they are and buyer’s agent Meighan Hetherington is along to share some wisdom about buying well and what happens with competing offers on a property.
Kevin: My next guest is Charles Tarbey, CEO and chairman of Century 21 in Australasia.
Charles, I want to talk to you about some of the suburbs around Australia that, well, were pretty cruddy but they’re now very, very much in flavor. You must see a lot of this. When I talk about these types of suburbs, I think of places like Paddington in Brisbane, Paddington in Sydney, even New Farm in Brisbane that weren’t so desirable. In fact, my Mom used to tell me that New Farm was one area that you’d never walk into. But, boy, hasn’t that changed?
Charles: Kevin, New Farm was a spot that I had to be careful of, as well. My sister had a home in Darra, going back all those years ago – Darra/Goodna – and if you think about the areas around there now and you look at all the different developments that have gone on, it’s just incredible.
Kevin: It’s great the way they’re gentrified some of these areas. Are there any areas that you know, because you get around Australia quite a lot, that are going through that process right now?
Charles: Yes, absolutely. I had some people visit the other day and they were looking at buying investment property and so on and had their dollars out and talked about buying something for $1 million or $1.5 million in Sydney. I said, “Look, you know, you can still buy properties…”
People talk about Mount Druitt in Sydney, and Mount Druitt had its first million-dollar sale of a home last year, last January. It was all Commission homes. But people are moving in from overseas, and they think these areas are fantastic compared to the lifestyle ahead. So they come in and they do the same thing.
I said to these people, “Look, right in the middle of Sydney, in between the M4 and the M7 freeway are places like Hebersham, Dharrak, that are not far from Mount Druitt where you can still buy a home in Sydney for mid $500,000s,” and 10 kilometers north – not even that – people are paying $2 million dollars for homes.
I think a lot of people avoid these areas because they hear all these bad reports, but for me, that’s an indication of change, and if I were out there actively investing in residential, that’s where I’d be looking now. I’d being buying two or three homes if I could alongside of each other in anticipation of potential medium density in the future.
People, again, are investing very heavily. South West Queensland has got a massive amount of profiling in the New South Wales market. Every time you turn the radio on, Kevin, they’re talking real estate, they’re talking about investing in South East Queensland. I think that you have areas of Queensland, southwest of Queensland, that still have a lot of upside.
I think you even have areas further south when you go past Ipswich and some of those areas there that people seem to have forgotten. All you ever hear about is flooding or other issues, and again, for me, that’s definitely a green light, not a red light.
Kevin: Good on you. Charles Tarbey there from Century 21. It’s always great to have you on the show, mate.
Charles: Thank you, mate.
Kevin: You talk about dodgy practices and sometimes with agents, and it brings to mind if you’re a buyer and you’re interested in a property, then you’re told by the agent someone else is interested and, in fact, they’ve made an offer and that you’ve got to be in competition with them. It’s called multiple offers. I do want to talk about that, and I’m going to discuss it with a buyer’s agent, Meighan Hetherington from Property Pursuit.
But just before I do that Meighan – welcome to the show – I just want to ask you about some of the tips that you have for buyers who may be going out and buying this weekend. What are some of your tip – whether they’re buying at auction or by private treaty?
Meighan: I bet there’s a whole heap of people who would like to stop going to open houses on a hot Saturday, and the only way to do that is, of course, is to buy, but you don’t want to be that person – that wounded bull – who commits to a purchase that’s not quite right.
Kevin: But what do you do? You’ve been looking for months, you find the place you like, and say hypothetically, it’s listed at $550,000. I get people who will call me and say, “Look, this thing is listed at $550,000. We think we’d pay $540,000 for it.” And I think, “Well, for goodness sake, for $10,000, if you’re going to own it for 20 years, buy it.”
Meighan: I think it depends on your timeframe and the reasons for purchasing. Investors very much have to be very sharp on their purchasing, but they also have to realize that in a rising market, every six months is going to cost them more money. So it’s putting that head on of what are the compromises that I’m prepared to make to get into a property that are going to be right for me as an owner-occupier, as a homebuyer?
Some people try to have a very long-term view of what they’re going to do with a property, when in reality, we turn over properties about every five to seven years. So having a realistic expectation about how long you’re going to be there and what your life is going to be like while you’re there is a way to help you get across the line of not expecting everything to be perfect on the property for the rest of your life.
I think when you find something that looks right, it feels right, and do your research, be prepared to commit to making an offer and make that offer subject to all the right things that will protect you as a buyer. A discussion with the solicitor is going to help you get your conditions right and protect you.
But on the flipside of that, we’re still seeing properties selling with multiple offers of five or six offers on the first day, so you need to be very careful that you’re not being too smart about your offer and not getting yourself in the position to be the buyer.
What I mean by that is if you think a property is worth $540,000 and there’s a good chance that someone else is going to pay $545,000, would you really want to miss out on that property for $5000 or have conditions that are unattractive to the owner that would make you look like an option that they don’t want to take on?
Kevin: Multiple offers, it’s always a difficult situation. Agents don’t like it.
Meighan: The response from the buyers is very uncomfortable.
Kevin: Very, very uncomfortable.
Meighan: And I think some buyers think that agents are leading them on a little bit and playing them off against each other.
We actually get agents to sign a multiple offer declaration just in the same way as a buyer has to sign a multiple offer declaration. It’s very important, I think because the trust is established on both sides of the fence.
Kevin: Isn’t that an indication, though, that you don’t trust them, that you’re asking him to sign that?
Meighan: No, it’s an indication that they’re asking for a buyer to acknowledge there’s a multiple offer, and we’re asking for the agent to acknowledge that there’s a multiple offer.
Kevin. Okay. That’s fair enough. Yes.
Meighan: So if a buyer thinks that they’re being misled, let’s remove that. Let’s just make it a non-issue, and with that declaration, I think that’s a good way to remove that doubt.
Kevin: So you get the agent to sign a declaration and then you get your buyer to sign a declaration saying that they understand that they’re in competition?
Kevin: Is it that their first offer may be their only offer?
Meighan: That’s usually the way the multiple offer works, and what we encourage people to think about when they’re putting that number together is I say to them, “If I ring you and I say that the property went for $545,000 and you missed out, how would you feel?”
Kevin: Yes, how would you feel? Yes. That’s right.
Meighan: “Work backwards and arrive at the number where you go ‘I would’ve have paid it.’”
Kevin: And then you’re comfortable, aren’t you? You’re comfortable to walk away.
Meighan: Then you know.
Kevin: Meighan Hetherington is from Property Pursuit. You can find them quite easy at that website. Thank you so much for your time.
Meighan: Thanks for having me, Kevin.
Kevin: It’s been great having you here.
Meighan: I’ve really enjoyed it.