Ashwood Buy - $500,000 UNDER Reserve Price

This recent purchase in inner City Melbourne suburb of Ashwood for a client is worth mentioning. When we negotiate, we always aim to get the best possible price for our clients. How much better? Try $500,000 under reserve! Yes, half a million dollars off the auction reserve price! This client enjoyed a whopping 25 times return-on-investment (ROI) on the buyers advocates fees they paid! Here's the story.

The double storey newish house had been on the market for about a month. It was passed in at an auction, with a highest bid of $2,750,000, short of the "close to $3million" reserve. Naturally, it did not sell.

It was subsequently relisted for $2,550,000. Weeks later, we negotiated a further $100,000 off the list price for our first home buyer.

Here are the purchase numbers in summary:

Auction highest bid: $$2,750,000

Auction reserve: ~ $3,000,000

Relisted at $2,550,000

Bought for ~$2,450,000 (exact price withheld at client's request)

We attended the public inspection, and felt it suits what our clients are looking for. The asking price is however on the "high" side, which would make this a bad deal. We let the sales agent know we are buyers advocates and our client might be interested. We organised the inspections, and due diligence, attended the auction, but decided to walk away as the auction price was insane.

This property got passed in at the auction and relisted a week later. And we decided to packaged an offer. Subsequent prolonged negotiations concluded with us buying this property for $2.45M. Whichever way you look at it, it was a massive saving:

• $500,000 less than the auction reserve price of "almost $3million" (as revealed by the agent subsequently); or

• $300,000 cheaper than the highest auction bid; or

• $90,000 savings from the post-auction list price.

Ie, had we not walked away from the initial auction and had pursued to be successful at the auction, we will be paying well over $3million for it. Post auction negotiations need not mean prices will be higher than our auction bid either. We bought it post auction for over $500,000 less.

It is critical to know the value of a property

Knowing the value of the property is critical to ensuring you do not end up overpaying for the property. Having an accurate independent appraisal of the property value requires a good understanding of the property, its potentials, plus, a good appreciation of property market in the area. Something which automated systems, even with its most advanced AI are unable to do accurately.

Included in our complete buying service, is the property appraisal service (value $165 per property), which gives buyers a good idea of what the property will sell for. We are so confident with our experienced assessor that we guarantee our assessment. If, within 30 days of assessment, the property is sold for more than 15% different, we offer a full money back guarantee.

Congratulations to our excited first home buyer couple.

If you need help purchasing your home or investment property, get in touch with our office here.

* location and photos anonymised at the request of our client.