CASE STUDY: A luxury home was auctioned in Merewether (a beachside suburb in Newcastle, Australia) on Saturday by an agency that we can call “Agency X”. It was a fascinating experience for a number of reasons, notwithstanding the fact that it didn’t sell.
Marquette Turner Luxury Homes have a wonderful property for sale in Merewether at the moment which is one of the finest in the city and our interest in the result of the other property being auctioned was understandable. We were lucky enough to have a representative (Person Y) at the auction that was able to summarize the experience.
Person Y was stunned by the number of neighbours who walked to the house just before the auction – it was obvious that none of them were likely buyers and if Person Y was a serious bidder “stalking” the crowd to find who may be a competitor then the game would almost certainly be up for Agency X. Person Y didn’t see anyone holding an auction number and also didn’t see anyone register for the auction. Person Y felt certain that the crowd contained no bidders and that neighbours were out to see what was happening.
Person Y wasn’t a fan of the location of the property and found it a little hard to locate. Person Y also thought it would be a very specific buyer as the home didn’t have broad appeal and more importantly had a price expectation in the vicinity of $2million.
In 2007 in all of Australia only 3.65 % of residential property sold for more than $1 million. In other words the target market for a home of that value in Newcastle is extremely small and the likelihood of several competing parties after a short 4 week campaign was always going to be low in even the best of markets.
Given that the property has now passed in and a vendor bid has been placed at $1.9 million we have to ask why that strategy was chosen? Auctions in Newcastle are statistically unreliable so very little data is available and given that buyers are looking for reasons to offer less and buy a bargain surely this plays into their hands? Can it be concluded that the home is overpriced, undesirable or that something may be wrong with it? Was auction really the right thing to do?
Using a specialist Luxury Agency is vital to achieve the best possible price and has never been more important than now.
Michael Marquette and Person Y
MORE INFORMATION: Read other articles regarding auctions