OUR RESULTS

This retainer began with a call from our male PhD client requiring our urgent assistance to buy a renovated terrace in Glebe which, after months of searching, he and his wife had found for sale by private treaty. The property was advertised with a price guide over $1.2 million and the urgency existed because our clients were soon returning to the City from a posting in western New South Wales.

Once retained as our clients’ Sydney buyers’ agent, our Principal inspected the property privately and ascertained that it would be a worthy acquisition at the right price.

Immediately afterwards, the team at Curtis Associates began fast track due diligence with particular focus on the vendor’s motivation for selling during a relatively quiet time of the year in the Sydney property market.

The other immediate priority was to contain our clients’ enthusiasm for the property in order to restrain them from paying too much for it.

In addition to a thorough analysis of several comparable sales undermining the vendor’s initially bullish price expectations, our due diligence and in field researcher uncovered a variety of adverse affectations and risks of which our clients were unaware including the assault of a neighbour in her garage.

Undeterred but now aware of those and other risks, our clients instructed us to continue with the purchase. An offer on contract with time limited for acceptance eventually saw the property secured for $1.14 million and all in four days (including a Public Holiday) after Curtis Associates was retained.

Applying the hindsight test™*

17 Hereford Street, Glebe with an almost identical floor plan to the property we purchased and on slightly larger land, sold less than a month later for $1.35 million which was 18% higher than the purchase price we agreed.

As recent arrivals to Australia from South Africa, our clients, now a partner in a major law firm and his young family, found themselves confused about where and what to buy in the Sydney property market.

Initially retained as their buyers’ agent to purchase an apartment they had found in Rose Bay, due diligence undertaken by Curtis Associates exposed a variety of serious risks associated with that property on the basis of which, they decided not to buy it.

They then decided to retain us afresh to find and buy a semi detached home in North Bondi. On realising that a home on a large block of land had become a priority, another fresh retainer was negotiated for us to find and buy a freestanding home on the upper north shore.

With that as our clients’ final focus, we bought their five bedroom dream home in St Ives prior to auction for $1.27 million.

Applying the hindsight test™*.

Eight months later, our male client wrote: “My neighbour’s place, same size land as us but house is not much more than 1/2 the size, for about $40k less than ours …130 viewings, 20 contracts out, 14 bidders at the auction.”

Anxious at the thought of bidding at auction and suspicious of the selling agent’s conduct during the marketing campaign, our clients, each working for multinational corporations, retained Curtis Associates to bid at a public auction.

Our clients’ suspicions were confirmed at the auction with our Principal identifying at least two people clearly engaging in the unlawful activity of dummy bidding. By controlling the auction process until the auctioneer’s announcement that the property was on the market, we eventually beat off the genuine bidders and purchased the property under the hammer for $1.267 million which was $86,000 less than our clients’ written bidding limit based upon their own due diligence and our analysis of recent comparable sales.These clients have since been a source of repeat and much referral business. Please note that we no longer provide a Bidding Only service.

This began as a retainer to find and buy a $650,000 apartment on the lower north shore for our female client’s mother who had retired to Sydney to care for our clients’ growing family. The apartment had to be close to our clients’ Mosman home which was a semi on a busy road for which they had just received development consent to renovate and extend.

As the retainer unfolded, our clients’ who were a partner of a Big Four accountancy firm and a senior economist, decided in discussions with us, that a better financial and lifestyle choice for them would be to realise a capital gain by selling the semi, pooling resources and buying a home to house three generations of the one family. We advised our client that whilst rare, we would be able to find and buy them such a property in time.

What ensued was a long journey with a happy ending which, with our guidance as its Sydney buyers’ agent, saw a family choose a transition to the inner eastern suburbs to occupy a renovated, five bedroom terrace which we found and bought for them off market. In addition to our usual extensive due diligence, this retainer involved numerous visits – what we call “caravans”– through various suburbs to acquaint our clients with options they had neither previously considered nor explored.

Applying the hindsight test ™*

Virtually unaltered and following our male client’s transfer to London, this property sold at auction 20 months later and in the midst of a stock market collapse for $2.01m representing a 10% year on year capital gain.

Recently returned from the UK, our client, a senior executive with an investment bank and a lawyer by profession, retained us to find and buy a home in the eastern suburbs for his growing family. Of paramount importance was the requirement for the home to be secure and safe for young children and within easy driving distance of the City.

Immersing ourselves in all relevant criteria during numerous meetings with our client, his wife and children, we created a brief and designed a search focusing on Centennial Park, Woollahra, Double Bay, Vaucluse and Bellevue Hill.

Over the ensuing weeks and in a market where quality properties in this bracket were in short supply, we appraised 16 properties of which six were found off market. Those appraisals included lengthy consultations with architects and quantity surveyors.

As an indication of the time which can be saved by retaining Curtis Associates as a Sydney buyers’ agent, only two of those were shortlisted for serious consideration by our client and his wife.

One of those was a recently completed, free standing and master built residence in a blue ribbon location which, after protracted negotiations with the vendor’s solicitor husband, we purchased off market for $6.65 million.

Drawing upon our Principal’s legal background, we later devised and executed a strategy which successfully thwarted moves by the vendor, motivated we believed by remorse at the agreed price, to rescind the contract before settlement.

Applying the hindsight test™*

No comparable sale

Retained by our dentist client as his Sydney buyers’ agents to find and buy a two bedroom investment apartment in the northern Sydney CBD, we first concentrated on due diligence into his initially preferred building to validate our opinion that it was an unsound investment destination. We moved into full search mode after our client had considered the results of that due diligence and thanked us for having saved him from making a mistake.

Within a fortnight, we found a north facing apartment in a tightly held and prestigious building with main Sydney harbour views and an exorbitant $1.35 million dollar price expectation.

The selling agent sought to justify the asking price by relying on the sale a year earlier for $1.2 million of an apartment with the same floor plan but one floor higher which had parking for only one car whereas the apartment he was marketing had double tandem parking. Aggregating that figure with the $142,550 achieved on a recent sale of a single car space in the same building, the agent and his asset rich vendor were very confident about achieving their asking price.

That confidence evaporated after our due diligence uncovered another and more recent sale of an apartment with the same floor plan two floors below for $1.18 million. This sale was not recorded on any third party databases. Although technically having a single car space, measurements we took of that space and obtained of various makes and models of cars confirmed that it was in fact long enough to accommodate two medium sized cars in tandem.

Shortly after we relayed this evidence to the vendor and other prospective buyers at two open inspections, we exchanged contracts to purchase this property at $1.28 million. That decision was supported by our usual and other extensive due diligence including, in this case, an assessment of the likely effects on the property of the neighbouring Barangaroo Development.

The property manager from whom we had obtained an independent rental appraisal leased the property a week later for a rental that exceeded our client’s cash flow projections.

Applying the hindsight test ™*

A three bedroom apartment one floor below with an inferior, south western aspect and city rather than harbour views sold six months later for $12,022 per square metre in contrast to the $11,743 per square metre paid by our client. This equates to an increase of 2.35 % in six months for an inferior apartment on a lower floor than the subject.

Our London based import/export client retained us as his buyers’ agent to find and buy a luxury apartment in a crescent of suburbs extending from The Rocks to Darling Point including the Sydney CBD.Having ascertained that our client was restricted to purchasing in a new Foreign Investment Review Board approved development from a developer, we assembled and coordinated a local team of experts comprising a chartered accountant, migration agents and solicitor to devise the most effective way of structuring the purchase. We also introduced our client to a specialist local financier.

To ascertain all opportunities falling into the category of property our client was eligible to purchase, we devised a two pronged methodology.

First, identification of opportunities based upon our long standing knowledge of the crescent of interest and numerous relevant contacts in our data base.

Second and to ensure as far as possible that we did not miss any opportunities, we tested the results produced by the first approach against the record of Development Applications maintained by the two local councils with jurisdiction in that crescent.

The latter check led to our reviewing over 6,000 Development Applications made in the four years prior to our retainer.

We also provided detailed comparative analyses of two Foreign Investment Review Board approved developments in North Sydney and Pyrmont and a leasehold development in the Sydney CBD.

This methodology succeeded in identifying one strongly preferred building then under construction which satisfied all of our client’s buying criteria.

Once selected as the target, we undertook rigorous due diligence into that project over several weeks which included retrieval and inspection of Council records, analysis of comparable sales in existing buildings, obtaining independent rental appraisals, inspection of display suites and common areas, investigation into a proposed ground floor commercial tenancy, analysis of likely strata levies, arranging depreciation advice, numerous site visits in a hard hat as well as visits to adjoining buildings to test the accuracy of the developer’s indicative view shots.

The major risk identified by this due diligence was the risk of view loss from the apartment of interest upon completion of a diagonally opposite building that was also under construction. To assess that risk, we obtained and provided to a specialist New Zealand based associate all pertinent Relative Levels measured from Australian Height Datum and other information which that associate used to prepare a 3D model, accurate in all planes to 50 cm, showing what the views and any obstructions from the apartment of interest would be once both buildings were completed.

The results of this due diligence informed the strategy by which, during negotiations lasting over a month, we succeeded in reducing the developer’s asking price by $300,000 or 8.2% – a percentage understood to be more than twice the discount allowed to other purchasers of similar apartments in the development. With off the plan purchases, the need to maximise such a discount is essential to mitigate the risk of paying a price higher than speculators achieve on re-sale once the building is completed.

This retainer was completed entirely by detailed emailed reports, photographs, numerous telephone conferences and without having met our client. Having now seen the apartment for himself, our client and his partner were delighted with the purchase.

Applying the hindsight test ™*.

A three bedroom apartment on the same floor but with an inferior floor plan and aspect sold six months later for $19,090 per square metre in contrast to the $18,001 per square metre paid by our client. This equated to a capital gain of 6.6% in six months for an inferior apartment to the subject.

Having nine years earlier purchased one of three strategically located and separately owned adjoining blocks in the North Ryde growth corridor, our successful and well established developer client entrusted us with the task of acquiring on market one of the two other blocks with a view to re-zoning and developing the site if it could be consolidated.

A delicate task in every case, the difficulties of this particular site consolidation were compounded by the negotiations between our client and the remaining two owners almost a decade earlier having ended unsatisfactorily leading to the risk that in any fresh negotiations, the same owners would seek to extract a punitive premium that exceeded any special value each property had for our client and rendered the acquisition unfeasible.

Once due diligence had been completed, our client agreed that the strategy should be to maintain its anonymity whilst concurrently positioning ourselves in the mind of the selling agent as representing the dominant interested buyer. Without having engaged us as its buyers’ agent to act as a professional intermediary, such anonymity would of course have been impossible.

Following robust negotiations over the ensuing fortnight , we succeeded in acquiring that property for market value and without any premium for the special value it had for our client.

Impressed with our performance of that retainer, our client immediately retained us to acquire the remaining middle block off market.

As the two owners of that property had no motivation to sell their unencumbered home of more than twenty years, this was an even more challenging assignment.

Our first task in devising a buying strategy was to analyse the history of the earlier negotiations for any lessons learnt and errors to be avoided.

The second task was to carry out detailed due diligence into the remaining owners and the third task was to research and advise on possible exit strategies if that block were not able to be acquired within our client’s timeframe.

Based on the sensitivities exposed by the previously unsuccessful negotiations and although tempting to do otherwise, full disclosure of our client’s identity rather than anonymity was the adopted strategy in this case.

As a result of the rapport established by that gesture and of having Curtis Associates interposed as a patient intermediary, the difficulties of the past were avoided and contracts to purchase the property off market were exchanged a little over three months after our unsolicited knock on the door and for a price only 10% higher than our client had offered nine years earlier.

Applying the hindsight test™*

Too early to tell as feasibility studies are continuing.

Why you should avoid virtual inspections

As our COVID-19 memories fade, it’s fair to expect a shift back to regular property selling methods.

However, changes that evolved during tight health restrictions continue to be promoted.

Virtual inspections are one of them.

But do they benefit the buyer?

The decision to buy residential or commercial property, whether as an owner occupier or investor, is not only about the glossy visuals and selected sound bites.

It’s also about that gut feeling a buyer gets when they walk in the front door.

That feeling is a sense of light, space and volume, local noises, smells, airflow, the design and flow of the rooms, the feng shui and how you, as a buyer relate to the property.

Of the five basic senses, all but taste are relevant to buying property.

Of the remaining four, virtual inspections can partially satisfy sight and hearing.

Such inspections can’t enliven the other senses like the touch of a drummy wall or of a cold room or the smells of damp, fresh paint or disguising fragrant candles.

When less than half the senses have been activated, how can you be sure you have made the right buying decision?

Neighbours and locals are just as important

And no virtual inspection will tell you what the neighbours and other local sources know.

Their knowledge and experience are not available online. A conversation with a neighbour can lead property buyers to investigate other aspects of the property or area.

Neighbours and locals can reveal inaccuracies about online information from third party providers and local councils.

Online results can be out of date.

Many of these matters are “Material Facts” which vendors are now obliged legally to disclose as we will discuss later this year.

Since Curtis Associates opened the doors in 2007, our accomplished and trained researchers have unearthed invaluable information from such sources resulting in nuggets of gold that have led to vital purchasing decisions for our clients.

For some clients this due diligence has been the reason not to buy and for others it’s been THE key reason to proceed with the purchase.

For others, these insights have provided a bargaining chip during negotiations or to fix auction bidding limits.

In all cases, our clients have had the peace of mind at having had an unknown become a known.

It’s not easy

It takes skill and tact to gather information from strangers, whether from the neighbours, renters who often owe no loyalty to the street, property or precinct, Australia Post workers, council workers or Police.

Knocking on doors or approaching complete strangers to reveal such information is not easy especially during a lockdown.

Harder still, is having the sensitivity to know when and how to use this information in negotiations.

Delicate topics such as vendors who are experiencing financial stress or relationship breakdowns, can only be raised with a sympathetic temperament.

Here are some real examples of how our clients this year and in recent years, have made purchasing decisions based on our due diligence:

For discretion, clear judgment and accomplished researchers get in touch with our team.