The owners of a water-damaged home in South Auckland have managed to turn a plumbing disaster into an auction success.
Their four-bedroom brick and tile home on Puhinui Road, in Papatoetoe, hit the market last month with a declared reserve of $299,000 - almost $800,000 below its CV.
The whiff of a bargain and a brutally honest advertising campaign did the trick. Thirty-two bidders turned up to the Ray White auction last week. Twenty-seven put their hands up and the house sold for $838,000.
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Ray White agent Bob Lemalu, who marketed the property with colleague Gerald Ah Wong, said there was a lot that was wrong with house. In May, the owners were battling a flood after their pipes burst.
“It was insured, they had repairs done, but it was all pretty damaging and not pretty," Lemalu told OneRoof.
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“The house is in a flood zone too,” he added. That had put a lot of buyers off, as did the fact it was on cross-lease section.
However, the owners were determined to try their luck. “They just want to find something with their grandkids, and their living situation has changed,” Lemalu said, noting that they had purchased the house from their parents and had been there 23 years.
Lemalu's listing on OneRoof showed the extent of the damage, with photos showing bare rooms and walls stripped to the windowsills. “No sugar-coating here – yes, renovation is needed, but you can restore this beautiful home to its former glory – and reap big rewards on the other side,” the marketing said.
More than 70 groups had attended the open homes, with interest coming from investors and traders. But the real action happened on auction day. “They just went crazy in the auction room,” Lemalu said, adding that just two bidders were left fighting it out for the final $80,000.
He said the buyer planned to renovate the house and put it back on the market.
The owners of the Puhinui Road, Papatoetoe, house had made some repairs through their insurance company, but weren't ready to do more. Photo / Supplied
A trader/renovator plans to do up the cross-lease property and put it back on the market in the New Year. Photo / Supplied
“It doesn’t settle for a while, so he’ll renovate it and resell it in the New Year,” Lemalu said.
Lemalu is no stranger to risky auction strategies, having kicked off the $1 reserve trend when he brought a run-down two-bedroom house in Papatoetoe which he called “the worst house on the best street” to market in July last year. After a heated 150-bid auction, that house sold for $510,000.
It kicked off a trend with other agents, including the co-owner of Lemalu’s Ray White Papatoetoe branch, auctioneer Ted Ingram. Earlier this year, Ingram listed two of his own formerly-flooded investment properties in Cotesmore Way, Parnell, off The Strand, one with a $1 reserve and the other with a $99,000 reserve. They sold for $93,500 and $80,000 respectively.
Ingram, who called the Puhinui Road auction, told OneRoof that while it wasn’t the biggest he’d called, buyers were always drawn to these sorts of properties.
“The thing is properties like that attract an awful lot of interest because people are hunting for a bargain. The auction market is just an open door to everybody,” he said, adding that bidding quickly blew past the $299,000 reserve mark.
Buyers are back looking for bargains, he said, noting that the office’s most recent auction day, six properties out of 21 sold under the hammer, with another seven properties selling later. He noted that most of the properties that sold were, like the Puhinui Road property, do-ups.
“There are a lot of people out there looking for do-ups. They’ll have a figure in their minds, but every single one of them will go past that figure if someone else wants to take it from them.
“Nothing gives a buyer more confidence than someone else wanting to pay more than they want to pay.”
He said the key was what he called “well-educated vendors”.
“Every vendor wants more than their home is worth and every buyer wants a bargain. I hear salespeople say ‘oh, the vendor wants too much money’ and I think they should. I’ve been doing this for a long time. An auction is really a public negotiation.
“It’s just a matter of good companies like ourselves get the listing, take them to the market and, see if the vendor is willing to accept what the market's willing to pay.”
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