In This Week’s How’s The Market | Edition 172
The Reserve Price Isn’t the Final Price
A Distinguished Address in the Heart of Camberwell
Melbourne’s auction market is about to go through one of the biggest changes we have seen in years.
From October, vendors will need to publicly disclose their reserve price at least 7 days before auction.
On the surface, this sounds like a great change for buyers and something that should make underquoting significantly harder.
However, after looking further into the legislation, there are some pretty big catches that buyers need to be aware of.
The biggest one is that the published reserve is not necessarily the price the property needs to sell for.
Let’s say the reserve is published at $1.1m.
If bidding gets to $1m and stops, the auctioneer can speak to the vendor and the vendor can decide that they are happy to sell for $1m.
The property can then be put on the market and sold under the hammer.
This is really important.
If you are bidding below reserve hoping the property passes in to you so that you can negotiate afterwards and add conditions like finance or building and pest, you could suddenly find yourself buying the property unconditionally.
If you make a bid at auction, you need to be prepared to buy the property for that price.
But strangely, the opposite is also true.
If the published reserve is $1.1m and bidding gets to $1.15m, the vendor is still not necessarily forced to sell.
This is why I don’t think the new rules completely solve the underquoting problem.
They give buyers more transparency, which I think is a good thing, but the reserve still isn’t a guarantee of what the vendor will ultimately accept.
There are a number of other changes coming in as well, including changes to boardroom auctions, fixed-date sales, pre-auction offers and the new Property Price Statement.
I’ve done a detailed breakdown of all of this on this week’s episode of Buying Melbourne, including what I think the changes will mean for buyers, vendors and the way agents run auction campaigns.
If you’re planning on buying or selling at auction in Victoria over the next 12 months, I’d definitely give this one a listen.
Happy Buying!
The Wow Factor!
8 The Grove, Camberwell, Vic 3124
A Distinguished Address in the Heart of Camberwell
Why it WOWs:
- French Provincial grandeur
- 3m ceilings and ornate details
- Designer Miele kitchen
- 4 bedrooms, all with ensuites
- Stained-glass skylight
- European-style courtyard
- Outdoor kitchen and pergola
- Private wine cellar
- Cinema and entertainment room
- Double garage and secure parking
Price: $5,300,000 – $5,800,000
Final Thoughts
More information is a good thing but remember, the published reserve is a guide, not a guaranteed sale price.
If you would like to see if the numbers could work for you, feel free to book a call, and we can discuss whether we can help.
Thanks for reading this far!
We value feedback and if you have any suggestions on what you would like covered in the future please email me at [email protected]
Happy Buying!
Note: This is general advice and does not take into consideration your objectives, situations or needs. Please consider if this advice is suitable for you and your circumstances and speak to a professional before making any financial decisions.
