Going, going, gone at $300,000 discount

[essence]

Oct 27, 2008

Colin Boot returned from a world trip on Saturday and saw the listing. He is now the new owner.

A new designer home in Browns Bay was sold for about two-thirds of its $1 million valuation after its owner put it up for auction with a $1 reserve.

The four-bedroom house at 7 Paterson Mews yesterday sold for $685,000. It had an independent valuation of $1.03 million.

One real estate agent said the downturn in the market was the worst he had seen.

The winner, Colin Boot, later told the Herald he had been prepared to go to $700,000.

IMHO, this again proves why one doesn't go to Auction - esp with a $1 reserve!!

Mr Beer thought the $1 reserve was effective in getting publicity, but it was probably not the best way to market the house to the right buyer.

Rest of the article here.

[spurner]

I'd never go down the auction route either.

But I doubt any of the bidders would have been attracted to the property if it was "PBN" or "Tender", and it would still be on the market.

[Stevegoodey]

True but having said that I wonder also if the buyer at $685,000 would have even looked at the auction if it had been a conventional undisclosed reserve.

[waxhead]

Auctioneer Alistair Beer said a reputable company had valued the house at $1.03 million within the past 12 months.
Quotable Value last month put the price at $840,000, but Mr Beer said QV figures and independent valuations always differed.
After eight minutes of bidding, the field of potential buyers was down to three.
The winner, Colin Boot, later told the Herald he had been prepared to go to $700,000

Interesting RV
$1.03m
QV $840K
Actual value $700K which is what he was prepared to pay

Just shows how far out RVs can be from Real value on the day

[Tucker]

I just think it's the auction process that doesn't work that well in todays market yet most agents are preaching auctions are the way to go. The only reason for that is because it's easy for them.

[Stevegoodey]

And becuase the agents get to dictate the terms of the sale in regards to Deposit and settlement.

They also get to condition the seller by having them pay fees upfront so that when it gets to the crunch and the vendor is asked to lower his reserve to allow the property to "Go on the market" most do.

It still boggles my mind that most buyers and sellers first auction is one they participate in.

You would think they would at least go along to a few auctions for practice?

[Green Fish]

I agree with Spurner. This vendor obviously wanted to get out, and he did, in a notoriously illiquid market. (Note that he appeared to be reasonably satisfied.)

Although I'm not suggesting that this occurred, the vendor can always give himself a bit of protection by using a 'plant' (and I'm not talking about a nice floral display at the entrance).

[revdev]

Although I'm not suggesting that this occurred, the vendor can always give himself a bit of protection by using a 'plant' (and I'm not talking about a nice floral display at the entrance).

Having a plant with no reserve would be a dangerous game to play. Your mate might end up owning it!

G

[princess]

Does anyone know what this house COST? If its on a section bought for $250k - its only a half site after all - and the house actually cost $350k to build (probably reasonable if it was built in the last year) then the builder has still made $85k profit, not bad in "the worst downturn ever seen" by the agent!

I'm pulling numbers out of the air, but if reality is even close, then everyone should be rather happy I would say!

[spurner]

Going going, GONE .... or is it?

$1 reserve house buyer can't find seller

The buyer of a North Shore house that was auctioned with a $1 reserve has been unable to find the vendor.

The designer home in Browns Bay was sold by auction at Labour weekend for $685,000, about two-thirds of its advertised $1.03 million independent valuation.

Colin Boot, who placed the winning bid, told the Weekend Herald yesterday that he had since tried to put a $69,800 deposit on the house but could not contact the owner.

"He won't take the deposit ... I was going to give him cash in a briefcase."

Mr Boot, from Christchurch, said he could not get hold of Jinjang Liu, also known as Jason Liu.

Just after he put in the winning bid, Mr Boot signed a document handed to him by Mr Liu. He was then distracted by media interviews. "I was swept away by the moment. By the time I turned around he'd gone."

Mr Boot is frustrated he does not have a copy of what he signed but has taken legal advice and placed a caveat on the property meaning no one can do anything with it in the meantime.

He now fears the auction may not have been above board. "No real estate agent was involved, no advertising company," he said. "It was only listed on Trade Me ... and a poster outside the house and about 100 flyers ... It's embarrassing to everybody."

The Weekend Herald repeatedly rang Mr Liu's cellphone yesterday but the calls went straight to a voice message, and he did not reply to a message to contact the newspaper.

The four-bedroom house with sea views at 7 Paterson Mews attracted huge attention, with 46 registered bidders and even more onlookers. The $1 reserve implied the house had to sell.

Auctioneer Alastair Beer told the Herald yesterday that his job was only to run the auction on the day.

He confirmed it had been a private sale, with no real-estate agency involved, but did not want to comment on the outcome.

Mr Beer had earlier told the Herald a reputable company had valued the house at $1.03 million within the past 12 months. Quotable Value last month put the price at $840,000, but Mr Beer had said QV figures and independent valuations always differed.

At time of sale Mr Liu, who had not wanted to be named or photographed, told the Herald he was satisfied with the price although it was "a bit low".

Bob Eades, an Auckland property lawyer, said if the document signed by Mr Boot was a standard sales form it would be a binding contract. But Mr Eades said even if it wasn't a set form it could still be binding if it included the property description, the price and a settlement date.

He said it was possible the price was too low to meet debts on the property and the vendor's bank had pulled the plug on the sale. While the vendor could be sued by the would-be purchaser, there was no point if he had no money.

article

[Marc]

$1 reserve house buyer can't find seller

Hello all,

Wasn't this auction advertised on PT?

The buyer of a North Shore house that was auctioned with a $1 reserve has been unable to find the vendor.

The designer home in Browns Bay was sold by auction at Labour weekend for $685,000, about two-thirds of its advertised $1.03 million independent valuation.

Colin Boot, who placed the winning bid, told the Weekend Herald yesterday that he had since tried to put a $69,800 deposit on the house but could not contact the owner.

"He won't take the deposit ... I was going to give him cash in a briefcase."

Mr Boot, from Christchurch, said he could not get hold of Jinjang Liu, also known as Jason Liu.

Just after he put in the winning bid, Mr Boot signed a document handed to him by Mr Liu. He was then distracted by media interviews. "I was swept away by the moment. By the time I turned around he'd gone."

Mr Boot is frustrated he does not have a copy of what he signed but has taken legal advice and placed a caveat on the property meaning no one can do anything with it in the meantime.

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He now fears the auction may not have been above board. "No real estate agent was involved, no advertising company," he said. "It was only listed on Trade Me ... and a poster outside the house and about 100 flyers ... It's embarrassing to everybody."

The Weekend Herald repeatedly rang Mr Liu's cellphone yesterday but the calls went straight to a voice message, and he did not reply to a message to contact the newspaper.

The four-bedroom house with sea views at 7 Paterson Mews attracted huge attention, with 46 registered bidders and even more onlookers. The $1 reserve implied the house had to sell.

Auctioneer Alastair Beer told the Herald yesterday that his job was only to run the auction on the day.

He confirmed it had been a private sale, with no real-estate agency involved, but did not want to comment on the outcome.

Mr Beer had earlier told the Herald a reputable company had valued the house at $1.03 million within the past 12 months. Quotable Value last month put the price at $840,000, but Mr Beer had said QV figures and independent valuations always differed.

At time of sale Mr Liu, who had not wanted to be named or photographed, told the Herald he was satisfied with the price although it was "a bit low".

Bob Eades, an Auckland property lawyer, said if the document signed by Mr Boot was a standard sales form it would be a binding contract. But Mr Eades said even if it wasn't a set form it could still be binding if it included the property description, the price and a settlement date.

He said it was possible the price was too low to meet debts on the property and the vendor's bank had pulled the plug on the sale. While the vendor could be sued by the would-be purchaser, there was no point if he had no money.

Source...

Cheers

Marc

[essence]

See this thread.

[Marc]

okay - I would be surprised if its a dodgy deal with all the media attention they received.

Cheers

marc

[Dean@Massiveaction]

I wouldn't, no agents and no proper documentation??

[Marc]

True...
Maybe my faith in people is a little naive.

Cheers

Marc