Selling your home in an auction can be stressful. Will it meet reserve? If so, did we set reserve too low? And is now even the right time to be selling by auction? Jaimie McDonald shares his recent personal experiences.
We sold our house recently. It had been a while since we last sold and that was in a completely different market to now. So, in going to market, we based our decisions on a mixture of advice from our real estate agent, a semi-educated "gut feeling" based on what we were seeing in the market ourselves, and the rest we left it up to the gods!
One of the biggest decisions we thought we needed to make was where to set our reserve. Do we go higher with the expectation of achieving the ridiculous prices many of our neighbours seemed to have been cashing over the last year or should we set a lower reserve in the hope that more buyers will be engaged once they knew the auction was "live"?
To our surprise, it turns out it was actually possible to adjust our reserve with the auctioneer we used during the live auction process. During the heat of the moment this added decision may not suit everyone. Personally, we felt it gave us the opportunity to be flexible yet still set a reserve based on the market price of the day and also ensure we weren't about to give our property away for a price we weren't happy with.
We sold our property, but this isn’t the case for many other sales by auction at the moment.
There was an article in The Herald last week citing that of the 130 Auckland properties sold by one particular auctioneer in the first week of October only 39 per cent of these properties were sold under the hammer. The article also went on to state recent figures by another auctioneer who passed in 45 per cent of homes on the North Shore, 40 per cent in central and eastern areas, and 28 per cent in south Auckland.
Speaking with other members of the industry, there does seem to be a higher percentage of auctioned properties currently going unsold. However, there also seems to be a considerable variance to success on the day between auctioneers overall. This made me think, how much of a difference does it make when you also have the ability to "move the posts"?
Is the auctioneer really better than another or does it come down to the experience and advice of the real estate agent before and/or after the auction?
One thing I can say is in our situation we were armed with good advice and possibly a little help from the gods. We were fortunate enough that we didn't need to worry about what would happen next if it was left unsold.
Jaimie McDonald is a Registered Financial Adviser with Velocity Financial. No investment decision should be taken based on the information in this blog alone. A disclosure statement is available free of charge upon request.