Newport home with disclosed reserve sells for $220k more
A Newport home auctioned with its $630,000 reserve disclosed prior has sold for $220,000 above expectations.
129 Woods St, Newport, went under the hammer with the reserve disclosed.
But it’s raised an issue facing government plans to mandate reserve price disclosure ahead of auctions: buyers don’t understand the sales method yet.
After initially being listed with an $850,000 asking price, the deceased estate at 129 Woods St had its price reduced and disclosed well ahead of yesterday’s planned sale date.
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While the vendors were happy to sell at that level, the market had other ideas with four bidders competing for it under the hammer. Others, including a Sydney-based investor, never got the chance after a $680,000 opening bid.
Agents working on the sale said it was a positive sign for Victorian government plans to tackle underquoting by banning auctions, unless sellers disclose a reserve prior.
The two-bedroom house at 129 Woods St came with a 347sq m block in a part of the suburb near cafes, schools and public transport.
OBrien Seddon’s Mikhail Tipakov handled inquiries for the property and said with both of the top bidders planning to bring in the bulldozers, it took a reserve at less than half the suburb’s $1.37m median house price to get buyers engaging with it.
The home’s interiors are still much the same as they were when the home last sold more than 60 years ago.
Classic home features such as sliding glass doors are still present.
“The vendors wanted to let it go to a new owner, and they wanted it sold on this day,” Mr Tipakov said.
Agency director Peter Gindy said the 12 minute sale was one of the quickest auctions he’d ever seen, and the disclosed reserve was a big part of that.
“It got rid of all the games … it was straight to the ‘on the market’ price,” Mr Gindy said.
However, he said many buyers were unsure about the method, suggesting wider use under the government’s proposal will need to come with some education.
“But it will be a great thing to put in place … as it puts transparency in place,” Mr Gindy said.
“I think the agents who learn to do it properly will do well, but it will put a lot of cowboys out of business.”
The 347sq m block has plenty of space left over behind the two-bedroom house.
The kitchen features glass-walled cabinets, timber joinery and an adjoining meals space.
Consumer Affairs minister Nick Staikos announced the disclosed reserve proposal in November, with a suggestion vendors disclose seven days ahead of the planned sale date.
They are expected to make further announcements soon, before a potential May launch, but are looking at the policy as a way to further reduce underquoting in the market.
The Real Estate Institute of Victoria has sought to have the timeline reduced to three days.
“There will be ongoing consultation with stakeholders … between now and when the bill is introduced,” Mr Staikos said, last year.
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