Advice on Lowering Selling Price

[Crane]

Hello,
I listed my property for auction in November one month ago with a reasonable reserve price.
Our agent told us last week that the market is volatile and has changed considerably since we signed the property for auction and recommended that we drop the reserve price by at least $20,000.
The property is listed under $400,000 and we are unsure where to go with this advice.
I thought I would ask some more experience investors about the antics of agents and whether they would take this advice seriously or not. The agent said that we should make our house price lower that the market value to ensure a sale.
I'm naive but still sceptical.
Thankyou

 

[craigb]

yes the market has changed, and things seem to be sitting longer, i see this as very true.
The agent like most rely on auctions as they can have a better idea as to when they! will be getting paid, yes they are on comission, and the more they get for you the more they earn, all true, but things are getting tight for all, so if you reduce your reserve by 20k and on auction day this still comes under by 20k the mental barrier to accept 20k less than reserve will seem ok to you, but now your down 40k, and he is down 2k. so at the end of the day you must meet the market, if you need to sell. but thats why he has said that good luck, withthe auction.

 

[The Y-man]

Hello,
I listed my property for auction in November one month ago with a reasonable reserve price.
Our agent told us last week that the market is volatile and has changed considerably since we signed the property for auction and recommended that we drop the reserve price by at least $20,000.

We only disclose our reserve at the last minute prior to the auction (depending on turnout etc).

We then say to the auctioneer "We are feeling very optimistic today!" and set the reserve at a high price - but also say "...if the auction slows down, come back in and we'll talk"

I have one tomorrow.... but not holdong out much luck - only one contract gone out during campaign, so it's likely to be a vendor bid and finish

Cheers,

The Y-man

 

[boods99]

We only disclose our reserve at the last minute prior to the auction (depending on turnout etc).

We then say to the auctioneer "We are feeling very optimistic today!" and set the reserve at a high price - but also say "...if the auction slows down, come back in and we'll talk"

I have one tomorrow.... but not holdong out much luck - only one contract gone out during campaign, so it's likely to be a vendor bid and finish

Cheers,

The Y-man

Hey Y-Man,
How did your auction go, any good news??
Boods

 

[eastside]

Just curious whether you are in Sydney? I attended a couple of auctions yesterday, everything got passsed in. Also went to opens, and 4 properties had received offers during the week, which had been accepted; only for the buyers to not get finance approval and the property to go back on the market. Are the banks saying the properties are valued too highly and in that way covering themselves for a market drop (and also bringing it about that way)?
It seems odd that so many people can no longer get finance. Has anyone else been out there seeing what is going on?

 

[wylie]

I would tell the agent you set the reserve the morning of the auction. Unless you are having to sell at the lower price, I would set the reserve at that you are happy to take. Be strong, but flexible on the day if you want it sold.

My concern with dropping the reserve $20K now (and I don't know why they even know what your reserve is now?) is that once that limit is reached, the auctioneer might not try to push the price higher.

You can always relent on the day if need be. Plenty of houses are sold in that first week after auction.

 

[Ausprop]

with what has unfolded you should ask if you really want to sell now. real interest rates will become negative so inflation will pay your mortgage off for you.

 

[josko]

All good advice.

Don't disclose your reserve until Auction time. Now that you have I would wait until auction and see how it goes. If the rpoperty does not come"on the market" because your reserve is too high and the auction seems to be stalling, the agent will ask you then to drop your reserve.

Regards JO

 

[fatboy4]

I know you have disclosed your reserve to the agent, and I agree that one would advise them the afternoon before or even the morning of the auction but

if the agent is saying "lower your price by 20k" it makes me wonder what they are saying to potiential buyers.

Is he/she giving feedback based on buyer inspections?
Why not ask them to show you properties on the market/ under offer that are comparable in value (in their opinion) to yours.

The under offer ones are the key as they have sold (but may be subject to conditions such as finance) and should be recent enough to be valid.

Your job then is to try and be as objective as possible and look at your property and the others like a buyer would.

Good luck with the sale!

 

[The Y-man]

Hey Y-Man,
How did your auction go, any good news??
Boods

As expected nobody fronted (other than a guy who turned up to watch as his property was going to auction up the road an hour later!).

The agent recommended we withdraw the property (so REIV shows as WD rather than PI with VB - not sure of the tactics here) and place it back on private sale - which we did.

So it was another quick 15 minute nonauction! (second one this year )

Cheers,

The Y-man