Red Hot Sydney and Melbourne

In Sydney's McMahons Point, Colin Morgan, insurer Zurich's former Asia Pacific global life chief executive and his wife Louise sold their four-bedroom terrace-style house at 13 Victoria Street for $4,425,000. The final sale price was $625,000 above the $3.8 million reserve.

"I've never had an auction like this where the bidding opened at $3.4 million and it then went up in increments of $100,000 to $4.2 million, which is insane," said Stone McMahons Point real estate agent Annika Bongiorno.


In Melbourne's eastern suburb of Canterbury, a five-bedroom period home at 31 Mangarra Road sold for $5.81 million – more than $500,000 above reserve – in an auction that saw three bidders battle it out.

Sydney, Melbourne auction clearance rates top 80pc as listings fall

 

The reserve price at auction is set by who? The vendors.
What suddenly makes a vendor (with an emotional attachment to the property in all likelihood) an expert on property values?
To my way of thinking, the reserve, is merely a figure representing the vendor's hopes and dreams but other than that, is completely meaningless.

 

...... but don't they all under quote? just saying, common practice

 

Yes the Reserve is meaningless in terms of value. It does however indicate the base the sellers would have accepted so it shows the craziness of current market

 

No, not at all, its a strategy used by re agents to create interest/demand, has nothing whatsoever to do with seller accepting that price.

 

the reserve at auction it is not related to under-quoting. Its the final figure nominated by the seller to the auctineer as acceptable. And from that point its on the market, ie the seller agrees to sell. You might be thinking of some furfy the agent puts on the initial sales agreement. Yes fictitious

 

Are you sure?

Buying_property_at_an_auction

Understand the following auctions terminology:

• Reserve price – before the auction, the vendor (seller) will set a price with the auctioneer that is the minimum price they will accept. If the reserve price isn’t reached during bidding, the auctioneer will privately ask the vendor if they will sell at a lower price.

 

not talking about reserve which has to be set, talking about the marketing campaign where re agents always underquote very common. I have also sold properties at auction in Melb, its illegal to underquote but they all do it

 

This is not correct from my experience of selling in Melbourne. From the start I gave my agent a number I wanted for the property. He listed it much lower. Then he called nearly every day throughout the campaign trying to talk my number down. On auction day he asked for the reserve and had a tantrum when I gave him my number. He argued with me to lower my reserve and promised not to put the property on the market until it got close to my number which was far above the reserve he wanted on the sales authority. I refused to sign any number except my number and he finally caved and let me put what I wanted. That is when I realised why he had been bragging to me about selling properties for $150k to $250k or more above reserve! Because the reserve prices are BS.

The interesting thing that during the auction the bidding very quickly reached my written reserve, proving the REA was full of it. I was very lucky at that point he redeemed himself somewhat by strategically passing the property in so I could extract a little more from the highest bidder. It was only $5k extra but better than nothing.

TL;DR there are untrustworthy real estate agents who underquote property prices and record fictional reserve prices on authorities to sell.

 

Don't believe everything you read. My REA passed my property in at auction even though it reached (but did not exceed) the written reserve price.

 

Conditioning the vendor is what we used to call it. Anything to get the deal together.

Probably not needed much in the current market