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The Property Advocate

Bid to sell homes in giant auctions

Monday, June 22nd, 2009

 

Author: Marika Dobbin 

Medical worker Anne Lawrie wanted to buy any one of three apartments auctioned yesterday in the same Doncaster building in which she already lives.

But instead of heading downstairs to a traditional auction on the building’s lawn, she and partner Michael Leonard drove to the CBD’s Sofitel hotel to cast their bids.

The couple took part in a mega-auction of 21 residences over about three hours in the hotel’s reception room, a method of selling residential real estate that is new to Victoria.

In-room auctions are common in Melbourne for art and antiques, and have been conducted to sell Sydney and Brisbane real estate for years.

Agency Ray White, a high-volume seller that has its headquarters in Sydney, has imported the idea to Melbourne with mixed success.

For its second Melbourne “auction spectacular”, more than 60 homes from Ascot Vale to Rosebud went under the hammer in a series of events this week.

The Age attended the Sofitel auction yesterday where 11 properties sold and 10 were passed in. The 52.3 per cent clearance rate was well below Melbourne’s overall clearance rate of 86 per cent in the past week, which was the best result in 18 months, according to the Real Estate Institute of Victoria.

Ms Lawrie and Mr Leonard, who paid $392,000 for a two-bedroom apartment yesterday, said they preferred the experience of buying off site.

“It takes some of the emotion out of it because you’re not standing in front of the property,” Mr Leonard said. “We had a visit (to the apartment) yesterday and today it’s easier to stick to your budget plan.”

Buyers’ advocate Christopher Koren said other large agencies, such as LJ Hooker, may adopt the in-room model in Melbourne for outer-suburban sales, but he doubted it would become popular for mid to high-end real estate where there was less volume.

“It’s more of a production-line way of selling houses. The advantages really are for the real estate agents, not the vendors or the purchasers, I don’t think,” he said.

“For the agent, it’s cheaper, it centralises everything; you only have to hire and train one auctioneer and it’s a controlled situation.

“But vendors like spontaneity because it can often bring higher prices.

“Quite often people have bought properties unplanned by going along to the auction on the day.”

However, vendors Martin and Christina Baillache of Vermont South said they were ecstatic with the price their Wantirna investment house fetched yesterday, which was $28,000 more than their reserve.

Mr Baillache said he chose to auction the house that way, despite it costing an extra $500, because he was curious.

“Compared to other properties today, ours had more interest. I think it depends on how good your agent is. Our (agent) got five or six interested parties to show up.”

General manager of Ray White Victoria, Marcus Williams, said it was not generally cheaper for vendors to sell at in-room auctions but there were several advantages, such as underbidders having a chance to win their second choice. “You find they attract genuine buyers rather than a majority of curious neighbours,” he said. “You also don’t have to cope with cold winds and rain … It’s a more comfortable environment.”


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