Two Auctions in Chatswood today saw huge crowd turnout and strong sale prices.
16 Johnson Street in Chatswood (4br/1ba/1ga) was sold at Auction today. During the marketing campaign, the quoted price guide was “over 1.2 million”. With nearly 150 people watching (see photo) and 14 registered bidders, the property was sold under the hammer for 1.426 million. The reserve set was 1.3 million.
In this market segment, it can pay to appraise the property early and approach the vendor before Auction with a fair or even strong offer. An offer of 1.35 million prior to Auction might have been accepted by vendor who we now know was willing to take 1.3 million. It would also have secured the buyer a 76k discount from buying at Auction where the competition is heated. It can pay to know the value of a property and offer confidently prior to Auction.
13 Bellevue Street in West Chatswood (3br/1ba/2ga) was also sold at Auction today. The initial price guide quoted by the agent was “over 850,000”. However, this was revised upwards to over 900k midway through the marketing campaign. With around 75 people gathered in the backyard (see photo) and 16 registered bidders, the property was sold under the hammer for 1.005 million. The reserve set was 915k.
This is reflective of the underquoting problem. Many agents start quoting low with continuous upward revisions making it difficult for buyers to asses what is achievable within their budgets. Too many buyers rely on what selling agents quote – which can in fact be misleading.
16 Howard Street in Lindfield (4br/3ba/1ga) did not see the same crowd turn-out but after almost an hour of Auction, the property was sold for 1,188,000 – which was more than 90k over the next highest bidder! With multiple side negotiations, the Auctioneer and selling agent was able to coax the highest bidder to actually bid against themselves – raising their highest, un-challenged bid from 1.1 million to 1.16 million, 1.175 million and finally 1.188 million.
While we actually feel that the price paid for the Lindfield property was fair (even under market), we would never advise a client to raise an Auction bid when they are the highest bidder already. When the rest of the crowd has left, the prospective buyer is in a much better position to negotiate with the vendor.
While it sounds obvious that you should not bid against yourself at an Auction, this happens surprisingly often. We see so many mistakes made by amateur bidders at Auctions – mistakes that are often costly. This is understandable. After all, how often do you bid at an Auction? How well do you know the respective Auctioneers and their style?
Auction is an emotionally charged event and selling agents and Auctioneers are trained to manipulate the situation in the best interest of their client – the seller. As Buyers’ Agents, we balance the playing field by understanding the strategies used by the selling agent and Auctioneer and how to counter it.
The 800k – 1.5 million North Shore market has really gathered momentum. Until recently this could only be said of the sub 800k market (also known as the first home buyers’ market).
Good value can still be found – but the best way to buy right now is to know the value of the property you wish to buy and make an early offer. The tricky part is in knowing what the ‘right’ price to pay is – and this is where OH Property Group Buyers’ Agents can help you.
About Oliver Stier
Oliver J. Stier is the Director of OH Property Group, a leading Sydney buyers agency. He studied Quantitative Economics and Finance at Cambridge University (UK), University of Toronto (Canada) and Princeton University (USA). In addition to being a licensed real estate agent, Oliver also holds the Chartered Financial Analyst (CFA) designation.