130 Anderson St, Yarraville, went to auction with its reserve price disclosed. It changed how buyers behaved in unforeseen ways that has the agent worried.
A Melbourne auctioneer with closing on 2000 sales under the hammer has revealed his concerns after trialling his first ever disclosed reserve auction.
They range from buyers skipping key check ins that risk them falling afoul of strict auction rules, to challenging decisions for vendors and even worries the city’s status as Australia’s auction capital will take a hit.
On the flip side, buyers were thrilled with a greater confidence in what the home would sell for — but still didn’t buy the home under the hammer, because they refused to meet the vendor’s reserve and wanted it for less.
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Woodards’ Leo Dardha has called about 100 auctions a year for 18 years and for the first time this week, he disclosed the reserve price.
“I’m nervous,” Mr Dardha said mid week. “I’m confident it will sell, but there’s not a lot of information from buyers and they aren’t asking questions.”
He anticipated between three and five bidders, a sale near the 130 Anderson St, Yarraville, home’s $950,000 reserve and a crowd of about 50 people.
The home had a light and bright interior, but did not win over homebuyers.
Veteran auctioneer Leo Dardha has mixed feelings after attempting his first disclosed reserve auction over the weekend. Picture: Ian Currie.
What he got yesterday was a crowd of about 40, including two bidders and a passed in result at $900,000.
Then, after the auction, a third buyer who hadn’t been there as it went under the hammer, made an offer and kicked off private negotiations.
“There was less emotion from buyers today,” he said.
Mr Dardha added that the process, while delivering significant positives for buyers, had created some troubling grey areas for the vendor.
“If you are a vendor approaching the last week of your auction, will you roll the dice with minimal information – or will you drag the auction and go to private sale?”
He fears there will be more homes withdrawn from sale and swapped to private sale ahead of auction — potentially up to 50 per cent.
The home’s kitchen is serviceable, but could offer scope to add value to the home.
There is a decent amount of outdoor space at the home, despite the affordable-for-Yarraville price tag.
The state government has yet to confirm a start date for the new requirement, but has indicated it will be before the November state election.
Mr Dardha said with super-sized auction numbers past 1000 a week in spring, the result could be up to 500 homes being withdrawn.
“There will be a real adjustment for agents across the board and I’m not sure if it will benefit the overall experience for vendors.”
In addition to more challenging situations for sellers, Mr Dardha said there was a chance fewer auctions could occur.
He also mooted concerns some vendors would set reserves too high so they had room to negotiate, causing confusion for buyers.
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