{"id":25333,"date":"2017-03-23T07:00:13","date_gmt":"2017-03-22T20:00:13","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=10783"},"modified":"2017-03-23T07:00:13","modified_gmt":"2017-03-22T20:00:13","slug":"dont-fall-foul-of-fomo-rich-harvey-2","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/dont-fall-foul-of-fomo-rich-harvey-2\/","title":{"rendered":"Don’t fall foul of FOMO – Rich Harvey"},"content":{"rendered":"

FOMO or fear of missing out is driving many property buyers, especially auction bidders, to pay way over the odds according to Real Estate Buyers Association of Australia president Rich Harvey<\/strong>.\u00a0 He talks to us about this and has an excellent suggestion for you if that sounds like what you might be going through.<\/p>\n

Transcript:<\/strong><\/p>\n

Kevin:<\/b> Rich Harvey, is on the line. Good morning, Rich. How are you?<\/p>\n

Rich:<\/b>\u00a0 A very good morning, Kevin<\/p>\n

Kevin:<\/b>\u00a0 Interested to read during the week that you\u2019ve put a warning out to buyers about making sure they don\u2019t become wounded bull bidders. What do you mean by that?<\/p>\n

Rich:\u00a0 <\/b>Indeed. We see a lot of frustrated buyers going to auction, particularly in the Sydney and the Melbourne markets, which have a larger percentage of auctions. We see buyers might have gone to five or ten auctions, they\u2019ve missed out, and they walk into that next auction and then they end up paying over the odds for that property without regard to the true market value.<\/p>\n

It\u2019s like they use the bidding card as a fan. They just can\u2019t stop raising it up the top, and they end up just paying way too much for the property.\u00a0 It\u2019s just another word for a frustrated buyer. We see it all the time. There are a couple of different demographics, but often you\u2019ll see younger families and they\u2019re dragging the kids around and particularly the last couple of weekends, there have been heat wave conditions, and people just get over it. But they end up paying anywhere from $100,000 to $500,000 more than they need to on a property just to get into the market. It\u2019s quite dangerous territory for some people.<\/p>\n

Kevin:<\/b>\u00a0 Rich, to go one step further, let\u2019s have a look at Melbourne today. There are 1400 auctions.\u00a0 Assuming that there are probably two, maybe even three, bidders at each auction, we\u2019re talking about thousands of people who are going to walk away unsatisfied after today. That feeds that fear of loss and that feeds that frenzy, doesn\u2019t it, to go out and buy something?<\/p>\n

Rich:<\/b>\u00a0 Actually Dr. Andrew Wilson sent me some figures on the weekend and also CoreLogic gave me some great numbers. I asked them, \u201cWhat\u2019s the percentage of properties going to auction versus private treaty?\u201d In Sydney, around 23% of listings went to auction last year and 77% were private treaty. In Melbourne, it was around 30% auction and 70% <\/b>private treaty. And in Brisbane, it was around 6% auctions and 94% private treaty.<\/p>\n

People shouldn\u2019t have a fear of missing out at auction. There are other properties available for them. They just have to be patient and hang on.<\/p>\n

I think a lot of the public aren\u2019t aware that there\u2019s a hidden property market. I think particularly what we as buyer\u2019s agents promote as one of our key benefits for our services is getting access to that off-market property. And there are quite a few of them. We\u2019re finding, particularly in the higher price ranges, there\u2019s a disproportionate percentage of off-markets available, and it\u2019s a really great market you can tap into to get a property.<\/p>\n

Kevin:<\/b>\u00a0 How do you do that as a buyer\u2019s agent? How do you tap into it? How could the consumer do it?<\/p>\n

Rich:<\/b>\u00a0 It\u2019s harder for the consumer to do it. It\u2019s easier for us as buyer\u2019s agents. We just have a really extensive network and a really good relationship with agents. We bring a qualified buyer to the table, we get advance notice. Because we\u2019re in the industry, we know what\u2019s going on.<\/p>\n

We don\u2019t collude or do anything at all unsavory. It\u2019s very much a straight professional relationship. It\u2019s simply relationship building and it\u2019s time spent. If you spend a lot of time doing something, you get very good at it.<\/p>\n

So as buyer\u2019s agents, we have a lot of access to properties that people wouldn\u2019t otherwise find.<\/p>\n

Kevin:<\/b>\u00a0 What would be your suggestion, Rich, to people who may have chosen an area \u2013 should they be then cultivating that relationship with the agents in that area?<\/p>\n

Rich:<\/b>\u00a0 Correct. That\u2019s right. It\u2019s just a matter of maintaining those relationships. You have to be the squeaky wheel that gets the oil there and gets noticed in those areas. That\u2019s the key.<\/p>\n

Kevin:<\/b>\u00a0 Are you going to many auctions? Are you bidding today?<\/p>\n

Rich:<\/b>\u00a0 We had one we were going to be doing today but it got sold prior, unfortunately. We have another two this afternoon. So fingers crossed, we\u2019ll try and get those two today.<\/p>\n

Kevin:<\/b>\u00a0 Did it sell to your client?<\/p>\n

Rich:<\/b>\u00a0 No.\u00a0 It went over their limit, unfortunately. You just have to know when to walk away.<\/p>\n

Kevin:<\/b>\u00a0 That\u2019s a good point. You obviously worked with your buyer and you set a limit. You don\u2019t need to tell us the property, but can you give us some comparative figures?<\/p>\n

Rich:<\/b>\u00a0 It was a one-bedroom in Randwick. I believe it sold for around $780,000, where we were willing to go to about $760,000. We were close but we\u2019re not that close. Also the client just had a limit, unfortunately. The property is probably actually worth that, but some of these clients just have a budget and they just can\u2019t go over that.<\/p>\n

Kevin:<\/b>\u00a0 It\u2019s worth it because someone paid for it. That defines its worth, doesn\u2019t it really?<\/p>\n

Rich:<\/b>\u00a0 That\u2019s right.<\/p>\n

Kevin:<\/b>\u00a0 Were your clients restricted on finance, or were they investors?<\/p>\n

Rich:<\/b>\u00a0 They\u2019re investors.<\/p>\n

Kevin:<\/b>\u00a0 So they had a very hard view on what it was worth.<\/p>\n

Rich:<\/b>\u00a0 That\u2019s right. Exactly. Yes.<\/p>\n

Kevin:<\/b>\u00a0 Do you find generally, Rich, that investors take a much harder line at that because they look at it as a business as opposed to someone who\u2019s going to become emotionally involved in buying a home?<\/p>\n

Rich:<\/b>\u00a0 Absolutely. With investors it\u2019s all about the return on investment and the yield and the growth factor you\u2019re going to get, so you have to buy well. For the home buyers, it can be more emotional. It doesn\u2019t mean there\u2019s any less attention given to it. But for the home buyers, they can ride out the cycle stuff a little bit more, so there can be a little more of a flexible factor in the price that they pay.<\/p>\n

Kevin:<\/b>\u00a0 Thanks, Rich. Great talking to you, mate. Thank you.<\/p>\n

Rich:<\/b>\u00a0 Thank you.<\/p>\n

Kevin:<\/b>\u00a0 Rich Harvey is the president of the Real Estate Buyers Association of Australia.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

FOMO or fear of missing out is driving many property buyers, especially auction bidders, to pay way over the odds according to Real Estate Buyers Association of Australia president Rich Harvey.\u00a0 He talks to us about this and has an excellent suggestion for you if…<\/p>\n","protected":false},"author":176692473,"featured_media":10786,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[32,10,11,13,36,22,25],"tags":[101],"class_list":["post-25333","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buying-a-property-topic","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-property-investment-topic","category-research-topic","category-sponsored-channels","tag-podcast"],"yoast_head":"\nDon't fall foul of FOMO - Rich Harvey - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/dont-fall-foul-of-fomo-rich-harvey-2\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Don't fall foul of FOMO - 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