On Saturday i called an auction in Gordon for owners of a penthouse apartment that had set the reserve nearly 27% above the guide price of $1,500,000. This in itself wasn't an issue, as you can't blame a homeowner for wanting to reach for the stars, however for the agent it meant the auction would undoubtably shift from flowing bids to on floor negotiations.
I've never been one to rush an auction, however there is a fine line between purchasers making emotional decisions and switching to logical thinking. It was important to keep the momentum rolling.
The bidding started low at $1,300,000 and I ensured we progressed with $100,000 increments until we hit the guide price and the momentum slowed significantly. My recommendation of $50,000 increments reignited the bidding until we reached $1,600,000 where the difference was split and there were 2 bids at $25,000 until 1 of the 2 bidders were out, convinced they had reached their max limit. Sitting at $1,650,000, $250,000 below reserve, bang on the agents professional opinion of value and with only 1 bidder left it was time to negotiate.
Firstly the owner needed to make some quick decisions on that ambitious serve, thankfully that discussion was had pre auction and they understood when I came to them the reality number would need to be given to me. Secondly I noticed that the remaining bidder was motivated to secure the property so it was important to not give away the property or show them we were low on competition even though there was no one else to compete.
Our plan was to 1. Revise the auction reserve to a number that was slightly out of reach, but also close enough to make it possible. $1,750,000 revised reserve was set, still above the agents opinion of value, but a number worth negotiating with. 2. Place an authorised vendor bid at $1,675,000 and inform everyone that the bid was against them and with the owner. This allows all past and current bidders to realise that the offer to private 1 on 1 negotiations was off the table and all parties were able to negotiate privately if we don't sell under the hammer or bid above the vendors bid.
This process encouraged the only bidder left to increase their bid by $25,000 pushing the price to $1,700,000. At this point it was clear the buyer wanted to buy the property or have the first right to negotiations.
While many auctions would stop there, pass in and allow negotiations to occur, it was time to step in and give this buyer a helping hand to secure the home under the hammer. Guiding the agent to have a quiet chat to the buyer whilst I explained this moment of pause to the crowd, knowing all to well the buyer was learning just how close they were to securing the property, it was only a few minutes before the bidder's paddle, raising in the air whilst I ask for an increase of $50,000 on themselves is met with a nod from the only buyer left and willing to secure this property.
A quick sweep of the room and affirmation head shakes to confirming all other parties were out, it was time to drop the hammer. Sold! for $1,750,000. $100,000 above the agents professional opinion and setting a new 2 bedder record price, block price and happy sellers, buyers and agent.
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