I had an opportunity to attend an auction for a family member in Northbridge yesterday, which turned out to be a great exercise in understanding how buyers are feeling and what they are doing in the current market. The price guide was $3,300,000 to $3,600,000. There would have been 30 people registered to bid and the property finally sold at $4,530,000. Yes $1,000,000 over the guide. They did not buy the home and were not too disappointed as they had done their research. They felt the property was realistically worth $4.2million to $4.4million.
With some advice they took several astute steps in preparing for the auction. It really helped them get a feel for pricing and to gauge what buyer demand would be. My tips for active buyers would be:
- Go to as many open for inspections as possible of surrounding homes in the week or two before auction, even if they are in a slightly different price range. Sales from two months ago are not comparable as the market is moving quickly.
- At those other open for inspections ask for recent sales data, as it is not always published. Ask those agents what they think the one you like is worth.
- Look at past sales data on the real estate buyer portals like domain.com.au and realestate.com.au.
- Ask a trusted agent for their thoughts on pricing and auction strategy. Also ask a trusted agent to visit your home in the lead up to the auction as the value of your home is changing too. This will generally mean you have more to spend, and the changeover dollar value will be relatively similar to where it was six months ago.
- Do your research if you are looking at renovating or rebuilding. In the above case they also spoke to a builder about renovation costs and spoke to the local council town planners about zoning and also what could be changed at the property.
The tips helped them as not all agents adjust their pricing levels as the interest in the property increases. Many less prepared buyers would have left the auction very disappointed.
It is still a great market to be transacting in – you just need to be really well prepared. Please reach out to me if you have any questions on buying or would like an updated opinion on price for your own property.