Why You Should Never Sell Your House By Public Auction

If you ever plan to sell your property by public auction – here’s a scary story you need to read.

It’s been cut-and-paste below:

Hi Kathy,

 

I want to tell you about my recent experience buying a house and why I would never sell at auction.

Last October a house across the road from mine came up for sale by auction. In the marketing it was advertised as $790,000 plus.

There was an open day and I went along to have a look. The property had a very large garage and as it was a corner block it had a lot of yard space which I liked. I asked the sales person what did they really think it would go for at auction. They were very cagy about it but did tell me that they had had interest in the low $800k mark. I thought the property was worth much more than that and so I offered $845,000 which they didn’t seem too impressed about but said they would take it to the vendor. About 5 days later they came back and said that the vendors were wanting more and were going to proceed to auction. At this point I felt like I was being played. I went home and did my numbers, looked at recent sales prices in the area and thought it would sell for low $900’s.

I then engaged the services of a brilliant buyer’s agent who did her research and came back a few days later to tell me to expect low $900. I really wanted the property so went to the bank and got the nod for a maximum purchase price of $962,000. On auction day I authorised my agent to bid to up to $962,000. She did a brilliant job and really played the auctioneer. The property was passed in at $865,000 after two vendor bids and my agent got to negotiate as the highest unsuccessful bidder.

It was revealed that the reserve price was in fact $900,000 which is a looooong way from $790,000 plus which it had in the marketing. Long story short is I paid $880,000 for the property when, if pushed, I would have paid $962,000. A very substantial difference. I saved $82,000. The vendor lost $82,000!

Having sold a house through a Jenman system agent before and having my recent experience with purchasing at auction, I can tell you I would never sell a property at auction.

Andrew W

If you’re thinking of auctioning your property we hope this help you think again. The good news is – you can still “auction” your property – just do a “private auction” instead.

To find out more about the Private Auction process please call on 03 9568 8000 or click here and we’ll call you.