30 Morris St, Woodend, went under the hammer and its reserve was published just days after plans were announced to force sellers to do so.
Two days after the Victorian government announced plans to force home sellers to reveal their reserve price before auction, a Woodend house has proven it works.
Consumer Affairs Minister Nick Staikos on Thursday announced plans for legislation to be introduced next year that will effectively ban home sellers from auctioning or selling homes on a fixed date unless they publish their reserve price seven days before the scheduled sale day.
It was met with significant concern and opposition from much of the property industry, as well as positive feedback from estate agents, professional buyers and a public tired of seeing dodgy operators get away with underquoting.
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Yesterday, John Keating of Keatings Real Estate held the first auction with a public reserve since the announcement, the only one of the 1,351 up for auction in the state this week.
PropTrack data shows that 65 percent of the 936 results reported as of 6 p.m. yesterday had been sold.
30 Morris Rd, Woodend, was one of these, having been advertised from the start of the campaign with a disclosed reserve price of $675,000.
When Mr Keating put the three-bedroom house under the hammer, it attracted three bidders and was set to sell for $783,000 – exceeding the reserve of the first bid.
“It definitely proves that you don’t have to underquote to get a strong result, and the market is the market at the end of the day,” he said.
The estate agent, who has battled under-quotes for decades and first started releasing reserves for auctions in the 1980s, said the house sold yesterday was not even the type he would normally put under the hammer. He only did this because it was effectively managed by proxy and greater transparency suited the situation.
![30 Morris Rd, Woodend - for Herald Sun Real Estate](data:image/svg+xml,%3Csvg xmlns="http://www.w3.org/2000/svg" viewBox="0 0 1280 720"%3E%3C/svg%3E)
30 Morris Rd, Woodend, was listed with a reserve price of $675,000.
The house is not the type of home Mr. Keating normally auctions, but the process suited several parties interested in the sale.
“It was a textbook example of how auctions should be done properly,” Keating said.
He added that he believed that after the legislation passed, more homes would go to auction as buyers would prefer the transparency it provides on sales prices.
“But the underquoting won’t stop in the first three weeks after the sale,” he says.
Most interested parties were looking for a home and all said they had appreciated the certainty of the price – with each of the three groups offering at least $725,000 despite the reserve price.
Chris Freelance led the sale of the house on behalf of his grandfather and said that while he had received negative feedback from some about making the reserve public, Thursday’s announcement was an important confirmation that he had made the right choice.
“I grinned when I saw the story,” Freelance said.
“And I think a result like this suggests that publishing the minimum price doesn’t restrict you. It just ensures that everyone goes in with the same understanding.”
With the house selling well above everyone’s expectations, he said it would make a “big difference” to his grandfather, Barry, who is going into aged care.
The Morris Rd property attracted several bidders and sold well above expectations.
Woodend estate agent John Keating has been organizing public auctions since the 1980s.
Shane Le Fevre and his partner were one of two parties to miss the house, and while it was disappointing to miss the house, said it felt fair and transparent.
“It gave us confidence going in and knowing that it was almost guaranteed to sell today, and that there was a reasonable reserve price and once that was covered it would come to market,” Mr Le Fevre said.
“I would like to see that at every sale or auction.”
Having recently sold their own home, the couple had listed the address with a price range with their reserve price right in the middle – although they ended up selling for about $30,000 more than they could have accepted, and they were confident they would have no problem disclosing a reserve price when selling.
“I feel happy to walk away knowing that the process was transparent, clear and felt simple, so it was a fun auction to go to with a lesser unknown,” said Mr Le Fevre.
Next weekend Victoria will have its second public reserve sale since the government’s announcement when Graeme Jarvie declares the sale of 13 Booth St, Morwell.
Early predictions indicate this will be one of more than 1,800 across the state.
He has had the house listed for sale with an indicative price of $210,000, and in advertisements stating “reserve price under $210,000.”
13 Booth St, Morwell, will be auctioned on November 29, with the reserve listed as “under $210,000”.
Mr Jarvie has been selling houses in the area for decades and said it was “the only fair way to do it”.
“I’ve been involved in real estate for years, and there are a lot of scrappy real estate agents around,” he said.
In support of the government’s announcement on Thursday, the agent said making reserves public was the only fair thing for buyers.
“The sellers were all fine with it… most of the sales were… and the buyers know what they are looking at,” Mr Jarvie said.
“The only time I don’t do it is when I make the occasional mortgage sale – and the bank doesn’t agree to it.”
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