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Selling via auction - How to get the best price

Discussion in 'The Buying & Selling Process' started by devank, 12th Jul, 2015.

  1. devank

    devank Look, lets just get on with this, ok? Premium Member

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    Hi,
    We are selling one of our IP (large house with over 720sqm land) in Parra region.

    Yesterday we had 10 groups came through. Five asked for contracts. Today (Sunday) another 5 groups inspected.
    One of them tracked down my number and try to buy it for 850k :)
    I told him I would rather keep the property.

    Now, few questions are in my mind.
    1. What sort of pre-auction offer should be accepted?
    2. If the auction stops at 50k less then is it better to lower the reserve price to get the momentum going again?
     
    Last edited: 13th Jul, 2015
  2. Louis XIII

    Louis XIII Active Member

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    Hi Devank,

    Answering your questions.

    1/ pre auction in the current Sydney market, I wouldn't accept anything less than 15% above your reserve, but preference would be to go to auction especially with the interest you currently have.

    2/ I don't see this happening in current market, all the best with the auction.
     
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  3. Pistonbroke

    Pistonbroke Well-Known Member

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    Is this the first week of the auction program? Too early to make a call. Wait until the agent provides feedback on the guideline or offers.

    If necessary push towards pre-auction offers.
     
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  4. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    Always (as a seller) proceed to auction day in this market. As BAs we buy prior to auction if we can but only because it will go for more if we let it go to auction.

    You won't need to worry about your reserve.
     
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  5. devank

    devank Look, lets just get on with this, ok? Premium Member

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    That would be nice :D

    It is kind of making sense for a BA. You are after a specific property. You don't want to let that go when you find it.

    Yes. It is the first week. There will be two more open houses next week. Finally the 3rd Sat just before the Auction.

    Just got the updated RP Data report. It came at $870,000 - $1,100,000. Middle is 985K.

    Maybe we should consider the pre-auction offer if we get only one decent offer. If we get more, then why not let them compete?
     
  6. Be Developer

    Be Developer Property Developer Business Member

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    As a seller, I wouldn't accept any offer prior to auction (especially in parra area)

    You may just take a benefit of

    On fall of hammer, unconditional contract
    And
    You may be surprised if you get 50-100k over your set reserve price.
     
  7. MsAli

    MsAli Well-Known Member Premium Member

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    I reckon 1.1m easily for yours @devank

    Great location. Too much going for the prop. Though it may turn off those wanting to build a duplex..unless it's possible?
     
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  8. monalisa

    monalisa Well-Known Member Premium Member

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    Wow at 850k... i don't see any issues. .. there is lack of good stock, and given the demand in the parramatta region, i don't think you have anything to be concerned about :)
     
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  9. Karina

    Karina Member

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    We just sold our family home in sydney a few weeks back. Having never sold a home at auction before I thought I would visit a few auctions the listing agency had scheduled the weeks prior. I got to view the 2 auctioneers they used. One I was really impressed with he was absolutly brilliant and the other I did not like at all. The agent had scheduled the one I didn't like for my auction. The week prior to auction I told my agent I wanted the other auctioneer and insisted on it. Couldn't understand why he would pick the other auctioneer when he had the choice between the 2.

    In setting the reserve I was advised by an agent (not related to the sale or agency) to set the reserve high. He said I could always adjust it if need be. I took on that advise and set the reserve at 1.3 million. I was expecting 1.2 - 1.3. We had received offers from 1.1 to 1.2 during the campaign.

    The selling agent really wanted me to set the reserve between 1.1 and 1.2 but I didn't take his advise and set it at 1.3

    In hindsight I am glad I stuck to my 1.3 reserve. We were expecting about 8 registered bidders but only got 4 on the day. All those that had put in bids before auction did not turn up.

    Agent came in when the bidding was just under 1.2 million and said I should put it on the market. I sent him away and told him to keep working. Came back at 1.22 million and said we were not going to get to the reserve and that we should call it on the market. I sent him away and told him to keep working again. The house was worth at least 1.25 based on what was selling.

    Auctioneer then came in at 1.225 and said bidding had completely stalled and asked my permission to take the highest bidder aside and try and negotiate directly with him during the auction. He had mentioned to me prior to the auction that he does this sometimes when he feels someone is willing to pay more but just doesn't have any competition left to push the price up.

    He took the bidder aside and told him that 1.225 would not buy the property that we would not sell for that price, showed him the envelope with the reserve at 1.3 and got his bid up to 1.25, then raced inside saying he had the 1.25 but he was going to push for more. Got him to 1.28 without any other bidders.

    Had I called it on the market at 1.2 we wouldn't have gone past 1.225 and would not have had the reserve price to use as a negotiation tool.

    Auctioneer saved the day and I was really happy with the 1.28 price.

    I would recommend checking out the auctioneers prior to the auction. You can request your own auctioneer if you want for the auction you don't have to use the one the agent selects. Would be happy to pass on the details of the auctioneer, just PM me if you want further details.
     
  10. devank

    devank Look, lets just get on with this, ok? Premium Member

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    Thank you Karina for sharing your experience.

    I'm planning to visit couple of auctions by the same agent to see how they massage their sellers.
     
  11. Chilliblue

    Chilliblue Well-Known Member

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    Devank, I would also agree to go to auction unless your agents feedback is contrary.

    My advise would be:

    1. Inform the agent that you are open to all unconditional offers prior to the auction but may not accept any. This way you can have a clear judge where the market is on your property.

    2. Do not to disclose your reserve price to the agent. Have it in a sealed envelope to be handed to the auctioneer prior to them commencing.

    Best of luck.
     
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  12. Pistonbroke

    Pistonbroke Well-Known Member

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    You and MsAli aren't both vying for this one?

    One pushing low the other high?
     
  13. monalisa

    monalisa Well-Known Member Premium Member

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    Would have loved to buy :D but in a slow/rising market :)
     
  14. MsAli

    MsAli Well-Known Member Premium Member

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    We did offer Devan. But when we offered it was worth about 700k or so only :D We went and bought already as Devan wanted unsuspecting buyers who fell in love with the property.....We weren't too emotional haha :)
     
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  15. Jacque

    Jacque Buyers Agent and Bookworm, Sydney Business Member

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    Karina you make a great point about auctioneer selection and I only wish more vendors would consider who they use here. They vary between incompetent and outstanding, and can really make the difference regardless of the market you're selling in. When the time comes to sell my Sydney properties should I select auction as the sales strategy this is the fellow I'd be using http://www.charlespowellas.com.au/ Charlie is not only an award winning auctioneer (I've had the privilege of being involved in REI judging and also being an audience "heckler" when he's on the podium :D) but is charismatic, professional for his vendors (without being condescending) and chases down every last dollar. When we worked on The Renovators (Channel 10) a while ago he was one of the standout auctioneers, along with the Cooley team, and really worked the audience and buyers well.

    In the last 20 years I've been to so many auctions and have experienced a plethora of styles but the best auctioneers stand out amongst the ordinary, that's for sure. Even when the property is passed in, the better ones get involved and do their best for the vendor, along with the selling agents involved.

    Good luck with your sale Devan :)
     
  16. Karina

    Karina Member

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    Jacque I totally agree with you regarding auctioneer selection. Its the agent that gets the buyers to the auction but its the auctioneer that sells the house on the day. The auctioneer I selected was Mark Roberts.

    He takes his time with the auction, has plenty of charisma, and simply does not give up which is why I wanted him to do our auction. I watched him at an auction a few weeks prior where he had an opening bid at 2 million dollars and then no one willing to bid after that. He kept the auction alive for more than 25 minutes without a second bid and ended up selling the home for 2.385 million. I knew right there and then that he was the auctioneer I wanted. I think most auctioneers would have given up and just passed the property in. I approached him after seeing a second auction he did to do our auction and asked the agent to switch auctioneers for us. I really wasn't impressed with the auctioneer we had been allocated.

    We all do a lot of research on selecting the right agent but don't give a second thought to who will be doing our auction. If I hadn't gone to the previous auctions I would have been none the wiser about the importance of selecting the right auctioneer.
     
  17. MTR

    MTR Well-Known Member Premium Member

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    Karina
    I think you sold at the right time, seems this market may be turning.

    MTR:)
     
  18. Karina

    Karina Member

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    MTR, interesting to see what happens to the sydney market from here. Another property in the same suburb that was auctioned 2 hours before ours was passed in and still has not sold. Another that went to auction a week later has still not sold also. Auction clearance rate dropped to 80% on the weekend, lowest its been for a while in Sydney.
     
  19. aussieshorter

    aussieshorter Well-Known Member

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    This is a very timely message for me. I'll be selling a property via auction in the next couple of months, and hadn't considered selecting an auctioneer.

    I just figured it was the agents job, and he would have an incentive to select the best. It obviously doesn't always happen that way!
     
  20. Mumbai

    Mumbai Well-Known Member

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    Any recommendations on the auctioneers?
    I was planning to use raywhite parramatta and their auctioneer is Paul wright. Any one dealt with him before?