Multiple Offers on a Property

This isn't exactly a topic specific to real estate in Cairns and Far North Queensland however it is something which I find myself discussing regularly with people; multiple offers on a property.

In the event where a property is listed for sale by private treaty (with an asking price) and more than one buyer expresses interest in making an offer to purchase, each of these buyers will be advised that there will be another offer in consideration and that the offer with the most attractive price and terms to the seller will be accepted.

To maintain fairness each of these buyers cannot know the price or terms of the other offers and must simply make their best offer in hope that it is accepted over all others.

This is at odds with a property which is listed for sale by auction whereby all bids (offers) are made in a public forum and each buyer is aware of exactly how much more they will need to offer in order to purchase the property. This method of sale through the bidding process will almost always produce the highest possible purchase price.

The Real Estate Institute of Queensland (REIQ) recently released a statement discussing this topic and also clarifying the legal obligations of the real estate agent during the multiple offer process:

The REIQ often receives queries from consumers about multiple offers on a property. A multiple offer occurs when more than one prospective buyer makes an offer on a property by submitting a Contract of Sale.

Multiple offers often happen in a seller’s market when competition for residential property is greatest and there are more buyers than there are properties for sale. However, it can occur in any market and especially for properties within an affordable price range.

Occasionally prospective buyers have alleged that agents tell them there is another offer on the property in order to secure a higher price for the seller, when in fact there is no competing offer.

There are heavy penalties for agents who mislead or deceive buyers by telling them there are competing offers when there are not.

When a seller is to be presented with multiple offers, a prudent agent will inform prospective buyers of that fact in writing and obtain a written acknowledgement. This gives potential buyers an opportunity to submit an offer if they have not already done so, or to revise an existing offer that has not yet been accepted by the seller.

Real estate agents have an obligation under the Property Agents and Motor Dealers Act to submit all offers that comply with the seller’s instructions to the agent.

Exceptions occur when, for example, the seller instructs their agent not to submit offers under a certain dollar figure.

Agents also have a statutory obligation to attempt to get the highest possible price for the seller. The law further requires that agents be fair to buyers.

Buyers should also be aware that sellers will examine all the terms and conditions of each offer before deciding to accept or reject any particular offer. The conditions can make certain offers more attractive for reasons other than the proposed price alone.

Some sellers may be prepared to accept a lower price if the offer is unconditional rather than take the risk that a higher offer may not proceed to settlement, because of the special conditions required by a buyer.

Statement posted by the REIQ on the 13th of August 2012.

Peter Musso licensed real estate agent at Ray White Smithfield selling property in Cairns' beautiful northern beach suburbs including Trinity Beach, Kewarra Beach, Clifton Beach, Palm Cove, Trinity Park, Smithfield, Yorkeys Knob, Holloways Beach, Machans Beach, Caravonica, Kamerunga and surrounds.

Cairns Region Market Analysis Provided by the REIQ

Here it is! An analysis of the Cairns marketplace for the January-March period of 2012 provided by the Real Estate Institute of Queensland (REIQ). News which is far and beyond what we could have hoped for; we were the second best performer for house price growth in the state!

House and unit markets
The second best performer for house price growth over the March quarter was Cairns, which recorded median growth of 4.5 per cent to $350,000. Local agents say the region now represents excellent value with demand increasing, especially in the upper end of the market.

Local agents say the market was finally starting to see the re-emergence of confident buyers – however over the March quarter, it was the up-graders at the prestige end of the market that were the most dominant, with sales in the $500,000-plus bracket up.

Access to finance from banks is behind the shift, with banks appearing to prefer clients with greater equity and serviceability, while loan applications at the affordable end are falling over on bank valuations.

As a result, first home buyers are struggling to get their foot in the door. And while investors are only just re-emerging, it is a marked improvement from 12 months ago when there was none at all.

Agents expect property prices to remain stable for the foreseeable future, while sales activity should gradually return to healthier levels.

A more favourable Australian dollar is also providing further stimulus for the Cairns tourism industry and, in turn, the economy and property markets.

Although a strong result for the house market was recorded over the quarter, Cairns’ unit market continues to struggle, with sales down 30 per cent. Its median unit and townhouse price decreased 1.2 per cent to $212,500 over the period.

Comments from various regional zone chairs, Cairns included, say that units are proving difficult to sell, as buyers are put off by the increased costs associated with owning a unit, such as body corporate fees, insurance levies and council rates. As such, buyers end up seeing more value in buying a house, with the ongoing servicing costs equalling that of a unit.

Vacant land market
Over the quarter, the Cairns vacant land market recorded a slight slowdown in sales activity, with fewer land listings coming onto the market.

Whilst there are few listings available, local agents report reasonable buyer enquiry levels, however affordable stock is becoming scarcer. As a result, the overall median for the region increased 6.7 per cent to $160,000 as sales numbers dropped off at Edmonton as well as a slight increase at comparatively more expensive Craiglie.

Rental market
The Cairns rental market has also improved markedly with it recording a vacancy rate of 2.5 per cent as at the end of March compared to 3.8 per cent at the same period last year. Agents from REIQ accredited agencies report a recovery in the tourism industry which is improving employment opportunities and therefore demand for rental property.

“With low investor activity combined with first home buyers struggling to enter into home ownership, the Cairns rental market continues to tighten.”

With low investor activity combined with first home buyers struggling to enter into home ownership, the Cairns rental market continues to tighten. Demand for houses is strong, while less investor activity in the unit market is making supply levels tighter.

Median rent for a three-bedroom house increased $10 per week to $320 between March last year and March this year. The median rent for a two-bedroom unit was steady at $250 over the same period.

Peter Musso licensed real estate agent at Ray White Cairns Beaches selling property in Cairns' beautiful northern beach suburbs including Trinity Beach, Kewarra Beach, Clifton Beach, Palm Cove, Trinity Park, Smithfield, Yorkeys Knob, Holloways Beach, Machans Beach, Caravonica and surrounds.

State-Wide Market Analysis Provided by the REIQ

The Real Estate Institute of Queensland (REIQ) have provided a state-wide analysis of property market trends with the release of their quarterly Market Monitor report. 

Click to Enlarge

The report analyses median house, unit and land price movements over the January-March 2012 period and is arguably the most trusted source of such data within the Queensland real estate industry.

Very positive news has resulted from the REIQ's figures showing that the Queensland property market has turned around and posted positive results for the first time in 18 months. The report finds that house prices across the majority of Queensland have increased with sales numbers also up – in some cases significantly.

Three months ago when the REIQ analysed the December quarter data it seemed to indicate the bottom of the market had been reached because prices were stabilising.
The REIQ predicted at the time that the March quarter data would be even more positive and house prices across the state have duly started to increase.

Property prices have grown in most areas and some regions have also experienced substantial increases in sales activity, which is a hugely welcome turnaround.

And while the March quarter figures contain plenty of good news, perhaps the best piece of news is some very healthy results in Queensland’s tourism centres, which have struggled more than most over recent years.

More importantly, the report also provides an in-depth review of all major regional areas throughout the state including Cairns and I will post this analysis for your information shortly. Stay tuned!

Blog post article information sourced from the REIQ Market Monitor Report - March Quarter 2012

Peter Musso licensed real estate agent at Ray White Cairns Beaches selling property in Cairns' beautiful northern beach suburbs including Trinity Beach, Kewarra Beach, Clifton Beach, Palm Cove, Trinity Park, Smithfield, Yorkeys Knob, Holloways Beach, Machans Beach, Caravonica and surrounds.

Queensland Tourism Centres Post Healthy Growth

The RIEQ (Real Estate Institute of Queensland) has reported that Cairns was the second best performing region in Queensland for the March quarter behind the Fraser Coast noting a 4.5% increase in median house price.

REIQ Cairns zone chair Greg Clyde-Smith said the market was finally starting to see the re-emergence of confident buyers with up-graders at the prestige end of the market showing dominance.

The REIQ Market Monitor report for the March quarter will be published in early June to reflect such positive figures… speaking with buyers on the ground there is a certain improvement in market sentiment though it will be interesting to see whether the Tourism centres such as Cairns and the Fraser Coast will be able to maintain positive figures over other major centres throughout the remainder of 2012... stay tuned!

Tourism centres post healthy growth

REIQ Insider Blog – May 21^st 2012

The REIQ March quarter median house price report has found the top performer of all major regions across the State to be Fraser Coast, which posted median house price growth of 7.8 per cent to $290,000 over the March quarter. The numbers of preliminary house sales were also up an impressive 42 per cent. Local REIQ agents say the region had benefited from a busy Christmas period as well as an increase in buyers prepared to buy due to the affordability of property in the area.

REIQ Fraser Coast zone chair Linda Bland said the March quarter has been characterised by a slight increase of sales in the $500,000-plus bracket.

“We have experienced additional demand in the upgrader market, which is predominantly coming from owner-occupiers,” she said.

“This can mainly be attributed to the softening of prices that has occurred at the upper-end of the market over recent years which is attracting buyers looking for excellent value for money.”

Buyers were generally still looking for the best opportunities available, she said, which many remaining price conscious.

“We are also starting to experience some increasing levels of confidence with many people starting to believe that the worst of the economic conditions could be behind us,” she said.

Maryborough performed well over the March quarter with its median house price increasing 3.4 per cent to $212,000 over the period.

A solid performer over the year ending March was Scarness which posted median price growth of 5 per cent to $308,750.

The second best performer over the March quarter was Cairns, which recorded median house price growth of 4.5 per cent to $350,000. Local agents say the region now represented excellent value with demand increasing, especially in the upper end of the market.

REIQ Cairns zone chair Greg Clyde-Smith said the market was finally starting to see the re-emergence of confident buyers – however over the March quarter, it was the up-graders at the prestige end of the market that were the most dominant.

“Sales in the $500,000-plus bracket were up compared to the previous quarter, while the affordable end languished somewhat,” he said.

“Access to finance from banks is behind the shift, with banks appearing to prefer clients with greater equity and serviceability, while loan applications at the affordable end are falling over on bank valuations.

“As a result, first home buyers are struggling to get their foot in the door. And while investors are only just re-emerging, it is a marked improvement from 12 months ago when there was none at all.”

Mr Clyde-Smith said he expected property prices to remain stable for the foreseeable future, while sales activity should gradually return to healthier levels.

“All of this does however hang on the need for further interest rate cuts – without which the wind will be taken out of property market sails once again,” he said.

“A more favourable Australian dollar will also provide further stimulus for the Cairns tourism industry and, in turn, the economy and property markets.”

View article source HERE

Peter Musso licensed real estate agent at Ray White Cairns Beaches selling property in Cairns' beautiful northern beach suburbs including Trinity Beach, Kewarra Beach, Clifton Beach, Palm Cove, Trinity Park, Smithfield, Yorkeys Knob, Holloways Beach, Machans Beach, Caravonica and surrounds.

REIQ Cairns Quarterly Real Estate Market Review

House & Unit Markets

The median house price in Cairns dropped 5.6 per cent to $346,000 over the June quarter however over the year ending June the median house price recorded a 0 per cent change.

According to local agents, the June quarter continued to be impacted by low consumer confidence which was compounded by the poor tourism sector and the high Australian dollar.

The announcement that the principal place of residence concession on stamp duty would be removed from 1 August had also not stimulated the market in any meaningful way before that date.

Agents say the majority of people are just not in a position to buy because either they can’t secure finance; they aren’t confident about their jobs or the economy; or they would have to take too much of a financial hit if they sold their existing property now to buy something else.

They say confidence levels need to drastically improve and the Aussie dollar needs to stabilise before the market picks up in any meaningful way in Cairns.

Over the year ending June, Freshwater recorded median house price growth of 13.5 per cent to $499,500, but this was partly due to the varying quality of stock sold over the period.

Nestled between rolling hills, a national park and a conservation park, Freshwater is a quiet, leafy suburb, which is popular with families.

The area is well serviced by transport infrastructure – Cairns Airport is only 5km away and Freshwater Connection train station, which ferries tourists along the Kuranda Scenic Railway, is centrally located.

The median unit and townhouse price in Cairns decreased 2.4 per cent to $225,000 over the June quarter. There has been significant softening in prices of units and townhouses in Cairns with reports of units selling for close to their purchase price off-the-plan from the 1990s.

This coupled with a shift towards more affordably priced units has contributed to the reduction in median sale price over the quarter and the last financial year.

The new Majestic Palms complex at Yorkeys Knob however continued to tick over more sales. Popular with interstate investors, the complex adjoins the Half Moon Bay Golf Course and is close proximity to all amenities.

Vacant Land Market

The median price of land decreased 5.9 per cent to $168,500 over the June quarter. Local agents don’t anticipate that the Queensland Building Boost will gain much traction in the region given the general softness of the sales market would make it difficult for second and third home owners to sell their existing property to upgrade to a new home.

New house and land packages also generally remain out of the financial reach of first home buyers.

Rental Market

The median rent in Cairns for a two-bedroom unit remained steady at $250 per week between June 2011 and June 2010. The median rent for a three-bedroom house increased $10 to $310 per week over the same period.

The residential rental vacancy rate in Cairns remained steady in June, decreasing to 3.7 per cent from 3.8 per cent in March.

Local property managers say vacancies are taking about two to four weeks to relet with about two to five applications per vacancy.

Information sourced from the Real Estate Institute of Queensland Market Monitor report for the June Quarter 2011 (Issue 11).

Peter Musso - Ray White Cairns Beaches - Property agent selling real estate in Trinity Beach, Kewarra Beach, Clifton Beach, Palm Cove, Trinity Park, Smithfield, Yorkeys Knob, Holloways Beach, Machans Beach