The gamble paid off for an experienced Auckland auctioneer who had listed one of his own investment properties with a $1 reserve, when the property sold today for $93,500.
The three-bedroom townhouse on leasehold land on Cotesmore Way, Parnell, had been fully refurbished after it was damaged in last year’s floods, but owner Ted Ingram had decided to sell up his portfolio of city rentals and used the $1 reserve tactic to draw in the buyers.
After a fast nine minutes of bidding, which started at $1, before bumping up to $100 and then $5000, bidders got serious and the hammer came down. For some time the two final bidders were adding bids in lots of only $100 before the final bidder snatched the property with a $300 increase on the second-to-final bid.
City Sales agent James Mairs, who marketed the rental home with its $1 reserve, had made no bones in the advertising that the property would sell on the day. In a renovated condition with a certificate of completion, Ingram, who declared his interest in the property at the beginning of the auction, said it would likely fetch $750 to $800 a week in rent.
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“Who’d have thought,” he commented as the bids went past $92,000, before adding that “we’re catching every penny here”. The property had a CV of $960,000.
Ingram, who reckons he’s called some dozen $1 reserve auctions in his over-23 years of auctioneering, said that the strategy worked.
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“I’m very happy. That’s why we do a $1 reserve because we know it will be sold.
“Now James gets calls from buyers saying ‘if we’d known it would sell for that, I’d have come’.”
Ingram added that after the auction Mairs was showing a second property he was listing in the same block at Cotesmore Way, at number 10, to buyers who missed out.
“We now have clear evidence that these are worth $93,500, that’s their fair market value.”
“I want to sell the [properties] and buyers want to know that they can buy them. We’re saying ‘you come along, you bring whatever money you’ve got and if you’re the highest bidder, you’re going to own this property’,” Ingram earlier told OneRoof.
Ingram said when he coaches agents on using low reserves to bring in the bidders, he gives the analogy of bringing a pot of water to the boil: start an auction with lots of small bidders “and then as the temperature comes up you get the big bubbles. You need the small bubbles to get the big bubbles”.
Auctioneer Ted Ingram in action. “You come along, you bring whatever money you’ve got." Photo / Fiona Goodall
The terrace house on leasehold land on Cotesmore Way, Parnell, was sold vacant. Photo / Supplied
City Sales’ Mairs is now bringing a second of Ingram’s properties to a low-reserve auction on April 10: , another three-bedroom apartment in the Mirage Apartments at 201/86 The Strand, also in Parnell.
The vacant place has a $99,000 reserve, with Ingram throwing in a re-paint and new carpet for the new owner. The block has an indoor pool, outdoor lagoon, spa, tennis court, gym and tropical gardens, and OneRoof records show its CV is $950,000.
However, Ingram is careful to point out that not all properties are suitable for declaring a $1 reserve, and sellers need to know the risks upfront.
The auctioneer is also selling a three-bedroom apartment he owns in the Mirage, at 201/86 The Strand, Parnell, this time with a $99,000 reserve. Photo / Supplied
“People have to be committed. If they’re not 100% committed, you wouldn’t do it. Nor if they had a mortgage on the property to a certain level, you wouldn’t.”
More successfully, earlier this month a two-bedroom house in Clendon Park, Manukau, described by the agent as the worst he’d seen, sold for $420,000 while last year a virtually uninhabitable three-bedroom house on George Street, Papatoetoe, went for $1.425 million. Its drawcard was the 1429sqm section zoned for apartment density.
- 201/86 The Strand, Parnell, goes to auction April 10 with a $99,000 declared reserve
