Homeowners involved in a lengthy property chain that had been dragging on for six months managed to buy and sell within an hour when they all attended the auction for one of the properties.
The four-bedroom, three-bathroom home on Double Bay Road, in Pyes Pa, Tauranga, didn’t reach the reserve price at last Thursday’s auction, but an agreement was reached after some backroom negotiations involving three parties and two other properties in the city.
The vendors of Double Bay Road needed their deal to go through to be able to buy a house on Beaumaris Boulevard, in Bethlehem, for which they had submitted a conditional offer. And the owners of Beaumaris Boulevard had a conditional offer on an apartment in the city.
Harcourts Mount Maunganui salesperson Theo Smith said: “We thought if we get everybody in the room, we could get a deal done.”
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And that’s exactly what happened, with all parties adjusting their price expectations so the people could buy the Double Bay Road home and in turn the Double Bay Road owners could buy Beaumaris Boulevard enabling those owners to buy their new Vantage apartment.
“Everybody had a bit of skin in the game really,” Smith said.
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The Double Bay Road owners had made an offer on the Beaumaris Boulevard property six months ago on the condition they sold their home, but it had been listed with a different agency and they hadn’t been able to get a deal done.
Smith took over the listing and decided to run an auction campaign. Within the first weekend, the vendors received a pre-auction offer, although it wasn’t high enough to bring the auction forward.
The Double Bay Road owners had already dropped their price expectations to meet the market as values had dropped over six months, so they got the owners of Beaumaris Boulevard to come to their auction to see if they would adjust their price.
“We said, ‘Hey we are all in the same boat, how can we make a deal work? These guys are coming down a couple of hundred grand, are you willing to come down a hundred grand?’, or however we made it work at the time.”
The buyers of Double Bay Road agreed to pay a bit more than their initial pre-auction offer and the property sold for $1.675 million.
A family home on Beaumaris Boulevard, in Bethlehem, was part of the chain. Photo / Supplied
The developer of the apartment the Beaumaris Boulevard owners wanted to buy didn’t need to attend because his was a unique offering that had been priced sharply, Smith said.
Smith said if they had not got all the parties involved in the auction room they would never have got the deal done. It also helped that he was the listing agent for all three properties and could understand the chain better.
With a lot more conditional offers being made in the current market, Smith said there was a risk some would fall over if people didn't have experience working on these types of property chain deals.
“A lot of people came into the industry in the last four years and as soon as they signed an agreement they walk away and do something else because it’s going to go unconditional and going to sell, but the reality is in this climate we are in now. When you’ve got a conditional agreement that’s when the hard work starts, and we have got to work a lot harder to make sure they then go unconditional because there are so many obstacles that will give a buyer a reason to try and pull out.”
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