A run-down three-bedroom home with a declared reserve of $699,000 sold under the hammer for $742,000 last week – $408,000 below its 2021 CV.
The 1980s house on a cross-lease site on Hendon Road at the edge of Auckland’s Mount Albert was advertised by Ray White agent Stephen Loo as seeking a “savvy purchaser without a faint heart”. He added that the executors of the deceased estate were clear – “someone is getting a bargain”.
Loo said the declared reserve tactic, a first for him, brought out seven keen bidders.
“Bidding started at $500,000. Even though the reserve was higher, people start there hoping it might go for less, that other bidders might go away,” Loo explained.
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He said the property drew out 34 interested groups during its three-week marketing campaign - most of whom were traders. The only first-home buyer who looked as if they would struggle to arrange finance for a home that needed that much work.
“It was mostly traders. It depends on what you think as a full reno, people could spend $10,000 or $100,000 but you can see the difference. People were doing their due diligence,” he said.
The eventual buyer, who won with a final $1000 push, plans to do up the place for family members.
“It definitely proved the market,” Loo said.
Loo said that setting the reserve price was a deliberate strategy aimed to bring in the traders.
The run-down house on Hendon Road attracted seven bidders, mostly traders. Photo / Supplied
“They like to know there’s a price, they are purely analytic and numbers-driven. The private purchaser will pay more because it’s a roof over their heads, but these buyers not so much.”
Loo said the figure was based on recent sales in the area, and the executors trusted him to get it right.
“It’s got to be enticing, a little sugar water to get the mosquito. These buyers are seeing properties every day - they can see this place has not been touched. But it’s in Mount Albert grammar zone, and people want that.”
Ray White’s head auctioneer Sam Steele, who called the auction last week, said Ray White New Zealand had called 317 auctions last week, up 93.3% on the same period last year, with a clearance rate of 52.9%.
“An average of 1.9 registered bidders per auction further attests to the eagerness of buyers to explore the property options available to them in the wider market and engage in a clear and open process,” he said.
He pointed to company figures that showed that properties selling under the hammer fetched an average 10.6% higher than the highest offer received prior to auction.
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