Setting a Reserve
A regular question I am asked is- What is a ‘Reserve Price’ and who sets it?
The Reserve Price is a dollar figure which the Home Owner sets prior to auction. It prevents an auctioneer from selling a home at a lower figure. This price is often only given to the auctioneer just minutes before the auction begins. This way, the home owner has 100% control over what that figure is.
The home owner comes to this figure through consultation with their real estate agent, of course. The figure can be a moving target throughout the campaign to sell their home. A sensible reserve price is based on market feedback from buyers who have inspected the home, plus comparable sales in the area in the past few weeks.
I can understand the frustrations of a buyer who wants to know what the reserve price is well before the auction so they can decide if they will buy, if they have the money and if they will turn up. But rest assured, when you speak to a real estate agent and they tell you the figure hasn’t been set yet, they are telling you the truth and not just trying to get you out on a Saturday to make up the numbers.
What I can assure you, as a buyer, is that people who take their home to auction are pretty much genuine sellers. Of course they want the best price for their home. Unlike many people we call ‘unmotivated sellers’ who put unrealistic figures on their homes to sell privately, those who take their home to market are more likely to listen to the market.
I hope this was helpful for you. If you have any more questions, you can call me, David, on 0411 655 611, or your preferred iTRAK real estate agent by following this link: www.itrakrealestate.com.au