No reserve auction: House sells for $1.45 million

[PTWhatAGreatForum]

A million-dollar Auckland home auctioned at no reserve by the owner to avoid up to $50,000 of agency fees sold far below expectation today.
The six-bedroom, three-bathroom house in Henderson sold for $1.45 million at a poolside auction - just $220,000 above its CV.
Owner Leon Laugalis said he was disappointed, with just 24 people turning up despite his TradeMe listing having over 39,000 views.
"I'm not happy. It sold well below its value. I was told it was likely to get between $1.8 million and $2.4 million," he said.
"A property developer has bought it and he knows he is buying it well below what it could sell for."

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11553103

So it sells for $220k above CV, close to 3x what he paid for it, and he has a whinge and sook because it wasn't enough. I wonder how many more like him are in for a big wake up - https://en.wikipedia.org/wiki/Tulip_mania

[Courham]

I see he turned down $1.8m and $1.9m offers before the auction.

A lesson learned me thinks- something about a bird in the hand being worth two in the bush perhaps.

Can't see there being much sympathy for him.

Craig

[Damap]

He was stupid enough to go no reserve this close to Christmas. There will be more to the story.

[PTWhatAGreatForum]

Some further quotes:

"When the auction has no reserve the vultures turn up, they were wanting to take it for peanuts...."

Vultures ay? Clearly the irony of buying a property for $525k and expecting to get over $2 million a few years later is lost on him....

"This is a very, very valuable place and I would think there would be 100 people here trying to buy it. Especially with the so-called shortage of houses, this is a fabulous big home it's a crime to sell it for what I sold it for."

It's so valuable 100 buyers would be competing to have the immense privilege of buying the castle from Sir King Knight Royal Highness Leon Laugalis? Clearly, the marketplace didn't have such a bizzare sense of reality.

Can't see there being much sympathy for him.

My sympathy is in negative territory.

[Wayne]

I love the article.
I wonder if he was a successful Investment Banker in his day?

"it's a crime to sell it for what I sold it for"
What is a crime is that stupid people are allowed to get column inches!
He obviously didn't have the skills to market the place and then moans.
BooHoo.

[PTILoveYou]

Hope he learnt his lesson.

If he stayed in touch with what is going on in the market, ie foreign non-local chinese buyers waiting for their IRD numbers, he could have removed the no reserve, or simply delayed the auction to a later date till the market gets hot again.

There is no sympathy at this level really, all his fault.

[Damap]

Obviously he thought that the novelty value of a no reserve would bring out hundreds of bidders. It may have gone well for him I think his timing sucked.

[PTILoveYou]

Obviously he thought that the novelty value of a no reserve would bring out hundreds of bidders. It may have gone well for him I think his timing sucked.

I think he underestimated the IQ of people who have $2mil to spend.

No reserve and any other fancy selling strategies only works on those are either ill informed or financially illiterate.

[Wayne]

I think it is the funniest story I have read for a while.

[elguapo]

I love the article.
I wonder if he was a successful Investment Banker in his day?

"it's a crime to sell it for what I sold it for"
What is a crime is that stupid people are allowed to get column inches!
He obviously didn't have the skills to market the place and then moans.
BooHoo.

He was advertising how much of a fool he is, after all he was the one who choose to sell at a no-reserve auction. If he really got those pre-auction offers, why didn't he set that as the reserve price? That's the usual way of dealing with it.

The story doesn't pass a sniff test IMO, something else going on here.

[ivanp]

I wonder why did the vendor not withdraw the property from market after achieving such a low result?
I suppose the vendor can do pretty much anything he wants until a sale and purchase agreement is signed?

NB: I haven't sold any properties, so not sure how auctions work for vendor from legal perspective.

[PTWhatAGreatForum]

I wonder why did the vendor not withdraw the property from market after achieving such a low result?
I suppose the vendor can do pretty much anything he wants until a sale and purchase agreement is signed?

NB: I haven't sold any properties, so not sure how auctions work for vendor from legal perspective.

In an auction - once it hits reserve (In this case reserve = $1) the seller and successful bidder have a legally binding contract.

[Damap]

He can't have it both ways. No reserve is binding in NZ.

[PTILoveYou]

It's ok, a friend of mine reckons he got market value.

[PTWhatAGreatForum]

It's ok, a friend of mine reckons he got market value.

He sure did. What he got was what the market was willing to pay that day.