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Setting Reserve At Autcion

Discussion in 'Real Estate' started by Chris C, 13th Feb, 2010.

  1. Chris C

    Chris C Well-Known Member

    Joined:
    2nd Apr, 2008
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    1,327
    Location:
    Brisbane, QLD
    Well as I mentioned in my other thread - http://www.invested.com.au/6/finally-selling-my-ip-36158/ - myself and my investment partner have decided to take our place to auction:

    WEST END, Queensland 4101 - Townhouse for Sale #106267362 - realestate.com.au

    Given that we are only a few days away now, our agent has asked us to start thinking about a reserve price and a refer to price. So I thought I'd put the topic up for debate to see what people's thoughts and perspective were on setting an effective reserve price and refer to price.

    As mentioned in the above thread - we have received three offers prior to auction and none of them have been what we are looking for. So I thought I would get you guys to give me your opinions on the value of the property from an investors perspective to help us set reserve.

    I think the main selling features are, it's a 3 bedroom with a massive loft which has doubled as a fourth bedroom for our previous tenants. It rents out for $600 week, it's body corp is only $600 a year in a small complex of 5 townhouses, it's about 1500m to Brisbane CBD, it's only a 300m from the very popular boundary street cafe and bar area.

    The building and pest came back fine, but mentioned that some retiling work should be done on the upstairs bathroom (I agree) and I'd also think the place probably needs a good paint, but other than that the place is in pretty good nick as it's not very old - I think it's less than 10 years old (though not certain).

    So given all of the above would anyone be willing to give me some approximations of what they think the value is from an investors perspective, and the reserve and refer to price price they would probably set at auction?
     
  2. Jacque

    Jacque Team InvestEd

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    16th Jun, 2005
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    Location:
    Sydney
    Hi Chris

    You mention three offers and your ad says offers over $600K. I would imagine that they're all over this amount. If so, then what's stopping you from selling prior?

    I can't comment on West End as I don't have properties there myself but I'm sure there's a couple of Qlders here who must.... where are you West Enders?!:D
     
  3. Chris C

    Chris C Well-Known Member

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    Location:
    Brisbane, QLD
    Nah... the auction got passed in, the bidding went to $547,500. When I say "bidding" there was only one bidder present (the other two that put in offers didn't show for various reasons)... so they were basically just bidding against the vendor. All in all it was very disappointing given that we had an offer for $590,000 that we knocked back 6 months ago.

    We have since changed our realestate.com.au listing so that it says we are looking for offers at $600K+. I think it plain and simple and it gets the right sort of buyers coming through the place rather than tons of people that have the vision of picking up a bargain.

    This whole process has been a great learning curve and has made me think that selling property at a good price has a lot more to do with the buyers in the market than it does the property itself. As in you basically just need people that want to buy your property because they really like it rather than selling to a bunch a bargain hunters who are always in the market.

    That said both my investment partner and I got proactive this week and went through and painted the place, changed all the dated light fittings, changed all the door handles in the kitchen to modern fittings, re-stained the deck, landscaped the garden - and it looks a million dollars better. I'm actually really disappointed we didn't do it before the auction.

    Oh well... lesson learned.

    :p
     
  4. Jacque

    Jacque Team InvestEd

    Joined:
    16th Jun, 2005
    Posts:
    1,885
    Location:
    Sydney
    Presentation sells- trust me. Best of luck and I'm sure you'll have it sold soon, Chris. Keep us posted!