When a family’s dreams hinge on auction day…

The weekend before a long weekend will always be a busy auction period, and our little office was humming with activity last week in preparation for seven auctions.

Coordinating our bidding schedule between three of us was no mean feat with our auction bidding falling between 11.30 and 2.30 in mixed locations. From Newport to Brunswick, Thornbury to Seddon, and everywhere in between, we had our work cut out for us.

Interestingly, six of our seven assignments all had one thing in common. We were bidding for them for their family homes.

One of the hardest balances we have to strike is how we give advice when determining our bidding limit figure. Our role is to help our clients secure the right property at the right price. Yet in an upwards moving market, we have to accept that each sale in an area may be setting a new record. We can’t just rely on comparable sales, however recent they may be. Taking into account the popularity of a campaign, the mainstream appeal of the property and the current market conditions is paramount to determining a budget which gives our clients a good chance at auction success.

Some clients are more emotionally engaged in the process than others. Yesterday was one of those days.

Our comparable sales analysis and intel we’d gleaned was only the first part of the process. Selecting a sensible stretch budget was the next task. In all cases, our clients actually asked us “how much of a stretch is not too much?” And our answers were consistent; for investors we’d typically e
ndorse a 3% stretch above where we feel market value sits for the property. For home buyers we’d suggest anything up to a 5% stretch. For some of our clients, we actually recommended pairing back their proposed upper limit.

The important question we ask ourselves is “at this level, could we find you a better alternative property?”

If the answer is yes, then we need to reassess the bidding strategy. Occasionally the property we are bidding on is so unique or so specifically suited to our client though, that we can’t just ‘find another.’ For three of our clients yesterday, this was indeed the case.

Armed with carefully thought out budgets, action plans and our client files in our brief cases, Amy, Pete and I headed out to our auctions.

The auction clearance rate of above 70% was evident at the coal face, particularly in the inner-ring areas we were active in.

The first auction of the day was at 11.30am in Durkin St, Newport. Our buyers were in the US and anxiously awaiting the phone call with news. Five other bidders and an advocate in the crowd didn’t phase us, but sadly I had to report that we’d been outbid by two determined down-sizers, and the final figure was in fact their upper limit.

The next auction at midday was just as frenzied and energy-fuelled. Two other advocates were there to buy, but our campaign intel was valuable and our clients had applied a sensible stretch in an effort to buy. With merely a couple of thousand dollars remaining, we secured this gorgeous property in Footscray for our ecstatic clients.

Amy and I had scheduled a tag-team effort to make sure that our coverage at every auction was guaranteed. Handing the client file over like a baton, Amy headed to Thornbury and I turned back to Newport.

Croker St Newport was an interesting auction. Quoted at $530K-570K and with an “on the market” call when bidding reached $600,000, we were dubious all along about the quote. Period houses in this suburb are tightly held, highly contested and generally attract a large crowd. This house was no exception and this time round, I didn’t even get to put up my hand. The hammer fell on the final bid of $716,000 from a determined parent who was bidding for his excited daughter.

One family’s dream came true at 1.30pm, but others unfortunately didn’t.

At 2pm our day got interesting. We had three auctions at the one time.  Amy covered 22 Gooch St Thornbury but in a sea of Eastern suburbs advocates, our upper limit was miles away from the final figure. And it was at this property that our question became quite important about value. Our clients could appreciate that this kind of budget could afford them a more suitable property elsewhere.

While Amy commiserated with our lovely clients, we had an exciting auction win on our final, upper limit figure of $681,000 in Yarraville for our investor duo, and Pete helped make one family’s dreams come true at 16 Margaret St Seddon when he secured this three bedroom Victorian beauty for $965,000.

Interestingly, our budget had been firmed up over coffee at 7.30am that morning. Their decision on our advice to increase their stretch budget from $962K to $967K absolutely paid off.

We never lose sign of the fact that auctions can be devastating for under-bidders, and we are mindful that in those final seconds, our quick decisions, fast-bids and tactics can sometimes make or break the final result.

Yesterday was exciting, exhausting and of mixed emotion for us.

It’s always sad for our clients to get so close, to prepare so diligently and to ride the wave of the auction process. But keeping their chins up and getting back out there on the search is what we immediately do afterwards.

For our happy families who secured their homes, we were proud to play a special role.