Auction Vs Private Sale – A Tale of Two Sales

[CASE STUDY] If you’re selling a property and you’re tossing up whether to sell your house by way of public auction OR private sale, watch Rhonda’s story (below). She has experienced both. We think her story might help you decide which is the best option to sell your property.


 

The Challenge
We really felt it difficult to estimate what would be a fair price for several reasons, one because we hadn’t been in the property market there for so long. But also because of the unusual nature of the property, which was a shop front built onto an old timber Edwardian residence with the back of the block of land already removed in an earlier subdivision. So it could have been considered an ugly duckling.

The Propertyold milk bar case study
151 Atherton Rd Oakleigh
Asking Price: $549,900
Selling Price: $652,000

The Asking Price
The price was advertised at $550,000. The property, although it’s got a lot of charm in many ways, has not been well maintained. Because of the lack of a very good presentation and the unusual nature we really didn’t know what it might get, we really, we just didn’t know. The eventual selling price was just over $650,000, so it was quite a bit over what we had thought we might get and we were very very pleased with the results, ecstatic would probably cover it, yeah.

The Process
We had set a price, which we thought was achievable, but in fact the level of interest was such that Katie recommended we change tack a little bit and just ask for the best possible offer, over that asking price. And that, as a strategy, turned out to be very very successful. And we, quite frankly, as I said we were just delighted with the end result.

The People
My name is Rhonda King. We’ve just sold our property in Atherton Road in Oakleigh. We chose TG Newton to sell the property after we had additionally purchased a property through them, oh, probably nearly 16 years earlier. I didn’t specifically choose Katie (Ryan), I rang TG Newton and she was allocated to my call and I’ve been very happy with that allocation.

The Skilled Negotiator
Katie is a really good negotiator. She is not overbearing at all, but she is firm and she’s very professional.

I’ve been delighted with the way she dealt with the people who did put offers on the table, and it was really exciting when we sat around and opened all the offers and did even better than we had hoped we might.

The Past Auction Experience
I have had a fairly unpleasant experience with agents in the past, and particularly with an auction whereby nobody turned up, and literally, nobody turned up.

And during the open house period the agent had told me that he was really impressed with a young couple who’d come to look at the house, that was my son and my daughter-in-law. So, I was not really keen on the concept of having an auction.

The Bet
The property was only on the market for two weeks, and, in fact, we had a bet that Katie couldn’t do it in two weeks, and she did. So my husband lost that bet.

The Result
I was not sure what price it would even bring, and certainly we didn’t want to give it away. But at the end of the day we did better than we had expected, better than we really anticipated we could do, and I’m glad we went with that private sale and the offers on the table process because it did encourage the purchasers, and there were a number of potential purchasers that Katie had found. It encouraged them to put forward their best offer, and those offers were higher than I believe we would have achieved at auction.

And there was no lead up either, because that can be really really difficult.

The Inspection Process
I found the process whereby there was set times for the inspections and people had to actually book into the inspections, was something that worked really well for us. As it was, we knew the exact times, Katie was aware of how many were coming and who was coming so she was able to manage those people through, in a very, quite informal but still a fairly scheduled manner. So it really reduced the potential distress and made it a very professional way, I feel, to manage this inspection process. Better than just having the house open between this hour and that hour, and people wandering through. Much better for us, much better.

The Expectation
We would have been happy to accept $550,000, because we did not think, we didn’t think we would get more than that for those reasons that the house was not in great condition, it is unique, so we probably would have accepted that if we hadn’t had Katie’s advice about the, the sort of tinder process where people can be asked to put forward their best offer.

The Offers
We had, at the end of the day, we had six offers on the table, I’m pretty sure it was six. And all of them were above our original asking price. Which is real credit, I think, to the negotiating skills of Katie.

I didn’t feel the pressure was on us. In fact, because with the recommendation that was made that people just put forward their best prices, we set the time when we could sit down, open the envelopes, look at what the offers were, there was absolutely no pressure on us to do anything, it was just laid out in front of us like a beautiful hand of cards.

The ‘Terms of Sale’
We were very pleased to see that the terms of sale with TG Newton were so positive. We didn’t have to come up with any large amounts for advertising, we didn’t have to commit ourselves with a price being uncertain to anything other than to let her run with it, and it would all be worked out at the end of the day. And we were very pleased with those rates and I think it’s a good way to go. Much better.

The Advertising
I know that there’s other people have spent thousands and thousands of dollars on advertising and that is a pretty scattergun approach, having worked in marketing myself for a number of years. So I really liked the way TG Newton managed this process. It was good.

The Marketing
I was really happy with the photography, too, because, again, I keep saying the house was not in the best condition, it was a bit like the before in the before and after photos. And the photos, whilst being quite honest, came across as very attractive too, and I think that was a big incentive for people, that and the realistic price, was a good incentive for people to come and inspect it, and when they saw what there was there and the potential, that’s what led to the range and the magnitude of the offers.

If people say you need to spend a lot of money to get the buyers in I’ll have to say this experience has shown me the contrary. We didn’t have to spend a lot of money. Yes we cleaned it up a bit, but we didn’t have to put to shell out thousands of dollars up front with an uncertain future. It was a good experience all around.