4 modern advantages of virtual home tours
Checking out a new house using your mobile or laptop before bidding at an auction will be the avant-garde way of house-h...
Did you watch The Block Glasshouse auction? If you were one of the millions on the edge of your seat on Sunday night, you were probably thinking “What the?”
Blogger: Bernadette Janson, The School of Renovating
While it is hard to take anything about reality TV renovating seriously, putting the celebrity effect aside for the moment there were three very solid lessons to be taken when we shine some perspective on the auction results.
Understand the value of what you are selling
The median unit price in Prahran is $545,000 for a unit and $1177,000 for a house. You don’t have to be Einstein to work out that achieving the reserve prices was going to be a challenge. The results of the sale of all the apartments were exceptional however the last three were seen as a tragedy when in reality they were very good prices for the suburb.
Supply and demand
The property market, just like any other market works on supply and demand. If you were to look at any suburb the proportion of sales at the top end would be small compared to overall sales for the year. To list five high-end properties at once is destined to test the market. I guess the hope was that the publicity hype would bring the high-end buyers out of the woodwork and it did.
Dr. Robert B. Cialdini who wrote the Influence: The Psychology of Persuasion quoted scarcity as one of the one of the principles that needs to be present to make a sale. Basically when something is perceived to be in short supply, buyers want it more! This would certainly account for the tremendous sale prices of the first two properties but unfortunately; there just weren’t enough buyers with deep enough pockets to maintain the momentum.
Doesn’t throw the baby out with the bath water
Let's assume for a minute that the last three properties were sold undervalue. Selling your renovation project below value at auction is not smart – if it is struggling to meet reserve, the other option is to pass the property in. Auctions can be hit and miss, depending on many variables including who turns up on the day. This takes us back to my first point: you must know the value of your property when making the decision to pass it in. Unfortunately is not as simple as knowing the median house price, property prices are influenced by many variables so that two similar houses in the same street can vary significantly in price. The only reliable way to understand the value of your property enough to make that call is through a thorough and systematic research process.
So The Block Glasshouse auction sale result, at 100 per cent clearance rate was not a disaster, but they do highlight how fickle the market can be. Sound research is the only way to equip yourself to make prudent decisions on auction day.