PHOTO: Who were the buyers? And did the auction order really matter? Photo: David Cook
There was plenty of action at this year’s auctions: quirky bids, nervous starts and unexpected results.
Let’s look more closely at some important factors that might have shaped the results.
Did the Fans teams redeem themselves?
Mitch Edwards and Mark McKie, and Ronnie and Georgia Caceres were pitted against three new couples on this year’s Hampton season, Fans v Faves.
Both returning fan favourite couples benefitted handsomely – the Caceres pocketed $296,000, and Mr Edwards and Mr McKie won the series with a total prize purse of $744,444.44.
Despite the size of Caceres’ winnings, the sum placed them last of the five teams this year, raking in the smallest amount over reserve at auction.
They endured a stressful auction in 2017 when they debuted on the Elsternwick season of the show. Their property failed to sell under the hammer, but a buyer later emerged, providing the couple with a profit of $161,000.
Their popularity with the audience that year compelled Nine to sign the Perth-based parents, who launched their own renovation and design advice show, Quick Room Flips with Ronnie and Georgia.
Their house, which was part of a chic overhaul of a derelict and seedy former backpackers’ hostel, was the most viewed listing online, but at auction, they won the least amount of money, taking home $384,000.
How can the reserves be so high?
Each of the properties had a reserve price – the minimum amount a seller will accept for the property – that is higher than the price guide given to interested buyers.
Houses 1, 2 and 3 had publicly advertised price guides of $2.8 million to $3 million, but each had a reserve of $3.4 million.
House 4 was listed with a price guide of $2.6 million to $2.8 million and also had a reserve of $3.4 million.
House 5, on by far the largest block of land on the show, had a price guide of $3.6 million to $3.8 million and a reserve of $4.1 million.
It is not uncommon in Melbourne’s real estate market for vendors to set a reserve higher than the price guide provided to buyers, and there is no law requiring a reserve to match the price guide. It is a situation that can leave underbidders confused.
It is also not evidence of underquoting for a reserve to be set higher than a price guide or for a property to sell well above its reserve due to unexpectedly strong interest on auction day.
Underquoting is very hard to prove. By definition, it can occur when a property is advertised at a price that is less than the estimated selling price, is less than the seller’s asking price, or has already been rejected by the seller.
This means a selling agent and vendor can discuss their reserve price only on the morning of an auction after receiving buyer feedback through the campaign and set it at a level that may be different to the price guide.
“We got given the reserve literally one minute before the auction,” said Ray White’s Kevin Chokshi, selling agent for House 4.
“It’s obviously all decided by Channel Nine, so we got given a price guide by Channel Nine and then we got given a reserve by Channel Nine, and we just followed instructions.
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