30 Morris St, Woodend, went under the hammer with its reserve publicised just days after plans to force sellers to do so were announced.
Two days after the Victorian government announced plans to force home sellers to disclose their reserve price ahead of auction, a Woodend home has proven it works.
On Thursday Consumer Affairs minister Nick Staikos announced plans for legislation to be implemented next year that will effectively ban home sellers from auctioning homes or selling via a set date, unless they publish their reserve price seven days before the planned sale day.
It was met with significant concern and backlash from many of the real estate industry, as well as positive feedback from agents, professional buyers and a public sick of watching dodgy operators get away with underquoting.
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Yesterday, Keatings Real Estate’s John Keating held the first auction with a disclosed reserve since the announcement, the only one of 1351 listed for auction across the state this week.
PropTrack data shows 65 per cent of the 936 results reported by 6pm yesterday had been sold.
The 30 Morris Rd, Woodend, was among them, after being advertised from the start of its campaign with a $675,000 reserve price disclosed.
As Mr Keating put the three-bedroom house under the hammer, it attracted three bidders and would up selling for $783,000 — surpassing its reserve from the first bid.
“It absolutely proves that you don’t need to underquote to get a strong result, and the market is the market at the end of the day,” he said.
The agent, who has fought against underquoting for decades and first began disclosing reserves for auctions in the 1980s, said the home sold yesterday wasn’t even the type he would normally put under the hammer — only doing so as it was effectively being managed by a power of attorney and greater transparency had suited the situation.
30 Morris Rd, Woodend, was listed with a $675,000 reserve price.
The home isn’t the kind Mr Keating normally auctions, but the process suited multiple parties with an interest in the sale.
“It was a textbook example of how auctions should be done right,” Mr Keating said.
He added that after the legislation comes through, he believed more homes would go to auction as buyers would prefer the transparency it will provide on sale prices.
“But it won’t stop underquoting in the first three weeks of the sale,” he said.
Most of the interested parties were looking for a home, and all said they had appreciated the certainty of the price — with every one of the three groups bidding to at least $725,000 despite the reserve price.
Chris Freelance was directing the home’s sale on behalf of his grandfather and said while he had been getting negative feedback about disclosing the reserve from some, Thursday’s announcement had been a major validation he’d made the right call.
“I grinned when I saw the story,” Mr Freelance said.
“And I think a result like this suggests that publishing the reserve price doesn’t limit you. It just makes sure that everyone goes in with the same understanding.”
With the home sold well above anyone’s expectations, he said it would make a “big difference” for his grandfather, Barry, who is moving into aged care.
The Morris Rd property attracted multiple bidders and sold far above expectations.
Woodend Real Estate Agent John Keating has been running reserve-disclosed auctions since the 1980s.
Shane Le Fevre and his partner were one of the two parties who missed out on the home, and while it was disappointing to miss out said it had felt fair and transparent.
“It gave us confidence going in and knowing that it was almost guaranteed to sell today, and that their was a reasonable reserve price and once that was covered it would be on the market,” Mr Le Fevre said.
“I’d like to see that on every sale, or every auction.”
Having recently sold their own home, the pair had listed the address with a price range with their reserve price in the middle of it — though wound up selling for about $30,000 more than they might have accepted, and were confident they would have no issues disclosing a reserve price as they sold.
“I feel happy walking away knowing that the process was transparent and clear and it felt simple, so it was a nice auction to go to with one less unknown,” Mr Le Fevre said.
Next weekend, Victoria will get its second disclosed reserve sale since the government announcement when Graeme Jarvie calls the sale of 13 Booth St, Morwell.
Early forecasts indicate it will be one of more than 1800 across the state.
He has had the home listed for sale with a $210,000 indicative price, and advertising quoting “reserve price under $210,000”.
13 Booth St, Morwell, will be auctioned on November 29 with its reserve listed as “below $210,000”.
Mr Jarvie has been selling homes in the area for decades and said it was “the only honest way to do it”.
“I have been involved in real estate for years, and there’s a lot of shonky real estate agents around,” he said.
Firmly in support of the government’s announcement on Thursday, the agent said disclosing reserves was the only fair thing for buyers.
“The vendors have all been fine with it … most of them do sell … and the buyers know what they are looking at,” Mr Jarvie said.
“The only ones I don’t do it for is when I do the odd mortgagee sale — and the bank doesn’t agree to it.”
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