Selling via auction - How to get the best price

It is not a development site. Front house can easily out live us. I was going to keep it as it is for another 20 years and then build six townhouses.

 

Was it already zoned? Or you think it would have been? How can it fit six townhouses?

 

This house is located 750m from a station. Any area within 1 km of a station would be rezoned within 20 years. We simply don't have enough land.

 

I'd have had a few independent vals done and use the most conservative as your reserve.

And I'd take it to auction unless an INSANE offer at least 33% over your reserve comes through.

 

@Mumbai

Is this for your Parra region IP too?

I would look at the key agents in the area... Elders Toonie - they seem to be doing really well.

We have not managed to buy of them still

 

Yes, elders toongabbie are good. But, for some reason they do not push towards auctions much. Have you been to the auctions from elders?

 

No haven't been to any. As you say they don't do those often.

I believe they had one in toonie recently.

 

McGrath run auctions/associated campaigns well. Not sure about the Parramatta region but here in Castle Hill they do. May be worth checking them out

 

They do in Parra also and have seen a dummy bidder at one of their auctions. The agent would have known the owners' son was bidding to push the numbers up. It was an OTP house in Merrylands, seller's origin was Middle Eastern. They owned next door also and their family started the drums in celebration before the auction finished. Needless to say it was a farce and the property was "passed in" as the highest bidder was their son....He claimed he was there to buy both properties that were built on the sub divided block. They were reported to DFT and warned. Fines of $22k apply where found guilty. I suppose hard to prove?

Edit: I wasn't buying. Went there with someone who wanted too. Glad they didn't
Also from what I've heard, they get the offers in Parra and usually the "neighbour" ends up buying the house. Now that's a bigger issue if the offers are being shown to others..

 

Fantastic story Karina, congrats on your sale and thanks for sharing.

I plan on auctioning off one of my properties in Melb later this year, can anyone recommend where I can find a couple good Auctioneers? Also does anyone know how much they charge, ie is it a fixed fee or do they ask for a % of the selling price etc? Thanks

 

Wow, didn't know that. I've just seen heaps of McGrath auctions under my area.
Looks like they're in trouble again?
http://www.smh.com.au/nsw/prestige-...-underquoting-complaints-20150710-gi8z90.html

 

The only time you sell it before auction is if say all the buyers are at 800k and one puts in an offer at $950k or something crazy higher. Auctions are the way to go, emotional buyers in one spot fighting for your property = premium price (if process done correctly throughout the campaign)

 

I think auctioneer fees can vary a little from around $600 - $800 (at least the one's I have come across) A good auctioneer can add 10's of thousands of dollars to your sale price so don't pick your auctioneer based on their fee or try and save a couple hundred bucks. I would gladly pay a higher price for my auctioneer and get someone that will do a good job.

 

I'm planning to see an auction run by the same auctioneer.
While in there I thought why not visit my IP.
Are there any laws against visiting the IP during open house time?

 

Totally agree, we are selling via auction on Northern Beaches early September and the only time I would sell pre-auction in the current market as I put it to our agent is if "stupid money" walked in the door, that's something you can't ignore.

 

No laws against going to the IP at ipen inspection. It's open to the general public, shouldn't be a problem.

The auctioneer we use costs $550, no cost if sold prior

No l

 

I'm not convinced that selling via Auction WILL get the best price. In order to get the best possible price, you usually need two parties fighting it out, and as soon as one drops out, the other will get it for a fraction more, even if they were prepared to go higher.

For instance.....I won't tell the figures, because this isn't unconditional yet.....anyway, we had one last weekend that had a 'Property Launch". The price was offers over xxxx. The Agent only got offers from two people, which was very disappointing, and I was prepared for the place to have another open this coming weekend. So the first offer was exactly my offers over price. No more! The second one came in at $20k more. We were really happy with that, and going from the interest lately would have gladly accepted it, however the Agent said that he wasn't happy with that, and thought that he could do better. Well, an hour later he rang to say that yes, he had done better, and would we like the contract signed at that price. Yep! Thankyou very much!

Anyway, if this property had gone to auction, the second buyer would have been able to buy it at just over the first persons offer, and I would have made considerably less on the sale.

In saying that though, I LOVE auctions. Especially in a depressed market, when I'm buying.

 

Skater- You already know what price the 2nd buyer is willing to pay.
Why not set the reserve price above that? If it is passed in then you can still accept that offer.

 

No! Firstly I'm not using an Auction, and secondly, the second buyer has gone so far over my expectations, it's not funny. I don't think, in the current market, that I would get another one willing to go THAT high for THAT particular property.

 

The auction brings out emotions and visibility to what others are doing.

When I worked as a REA I once had a person increase their offer and said that is as far as they would go (they knew there was another offer). He was the strongest bidder at the time but the other person also increased their offer (as I told them I am seeing the vendor tonight and needed their best offer).

I sat down with the vendor and said I still feel we can get more money from them. They were okay with the price but it had been on the market in total 18 months in total 16 months through another agency who overquoted/bought the listing (hence why it didn't sell).

Anyway they were going to sign and I said hold on a moment I will call both buyers and put them on speaker phone and told the underbidder 'The vendors are about to sign and are wanting your best offer' He told me nope that is it I cannot/I am not going any higher (talking years back). I even told him he isn't in a winning position (this was the first time I had told either buyer where the other offer was). He still told me no. I knew he had a place to sell and he even offered me his listing if I sold him this property, which I told him I would like the opputorunity to sell it but I am not going to conflict my results of obtaining the best price for my own pocket and you might be upset but you will know that when I sell your property I will give you the same service and integrity.

So I called the best offer and tried the same line (without the line of you are not in a winning position). They also didn't increase their offer but it was accepted.

I called both buyers the winning buyer was estataci as they thought they had lost the property but thought if it was meant to be it was meant to be and she even showed me a $1 coin that she tossed up in the air in the carpark about if they were going to raise their original offer. It landed on head so they came in.

I then called the underbidder told him he hadn't won, the conditions were very similar but he had missed about by about 5 or 10k (again cant remember) sale was about 600k. He told me he was very disappointed and he would of paid more than what the other offer was. I had to tell him that I told him to give me his best offer and I even told him you were not in a winning position. I told him when I first started talking with him I have not and will not ever tell a lie and when I said you were not in a winning position how could I come back and say you were the winner?

Long story short, if this was at auction they vendors would of gotten more money, but they didn't want to go to auction.