Second Place is First Loser – Auction day in a Covid Market

It was down to him and me.
Bid for bid and number for number anytime one of us moved, so did the other.

On this beautiful Saturday morning on the Sunshine Coast, my opponent was chasing the same prize as I was; to pay the most money for a property that needed to be knocked down and rebuilt….

Auctions really do sound crazy when you begin to break them down. Imagine thinking that people ‘fight’ over houses that need to be knocked down and willingly pay more than the next person to do so?

Auction bidding is one of our services and we are good at it. At this auction however, I was first loser, running out of money before the winner did. I tried lots of different tricks to slow down the auction, or lump the bid, or read the person, but at the end of the day, he was willing to pay more than my client, and he won the day.

I am not writing this to tell you I lost an auction bid, but rather what was bidded on and the price it achieved.

This property was a 40 plus year old lowset home in a beachside suburb on the Sunny Coast.
Not on the beach, about 5 min walk away.

It had lots and lots of wallpaper, and mission brown paint, and anodised bronze window frames. It also had the front of the home sinking into the soil, quite noticeable from the street. Not yet dangerous, but looked well below par.

The agent had given price indications of low to mid $700’s. The software we use to price research, came up with $755k and knowing what the market was now, our estimate was $750-$800k-ish.

We had our pre auction strategy session with our client, and they gave us some parameters they were happy to work within and how much their upper limit was etc.

We also negotiated a change to the standard settlement terms of 30 days, to a date that suited our client.

Auction day

Picture the best Sunshine Coast day you can imagine and that is close to what it was like. Stunning day, perfect temperature, coffee van on site. What more could you want?

How about 20 registered bidders and about 80 people at the auction?

Oh dear, this was going to be big!

The opening bid started at $600,000 and went up quickly, of course. The pricing slowed at mid to late $700’s where all the neighbours and cash-light bidders, dried up.

Above $800k, it was just three of us and from $830k onwards, was just me and the one other guy.

My client was on the other end of the phone, while I was bidding, and we had already passed their top dollar price and they chose to keep going, but with a final bid of $851k, we were out. The final bid of $852k bought the property and gave me the title of First Place Loser.

I talked to the buyer afterward. He was a mid-30’s something family guy and was going to knock the house down and rebuild.

Do the maths, that is an expensive block of dirt…

This property sold for over $100k more than the agent provided comparable’s, $100k more than the software calculated price and about $50k more than what we thought (hoped) the top dollar might be.

Great days to be a seller!

For more information on buying property or if you need help at auction, just reply to this email with your comments or questions.

Since 2004 Scotty North has been helping people buy the best properties for their needs at prices that simply speak for themselves.
Scott has been instrumental in bridging the gap between financial planning and traditional real estate transactions through his property advice model.

Scotty North is a Qualified Property Investment Advisor (QPIA), with accreditation’s in financial planning, mortgage broking and real estate.

By carefully considering his clients’ goals and planning for market changes via demographics and trends, Scott designs a future proof outcome not only specific to the client’s needs but dynamic in its execution with performance indicators and exit strategies built in.

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