Artemio Requizo and wife Maribe were hoping to get top dollar for their Keysborough house when their neighbours’ homes sold above expectation in the hot Melbourne market earlier this year. But when the big day arrived on November 21, their property passed in for less than what they were anticipating, and what their neighbours achieved.
Mr Requizo ascribes the result to the major banks’ decision to raise interest rates, which he believes has deterred some buyers.
He and his wife were nervous about hearing about rate hikes, and worried about how it may affect house prices. But they were still expecting someone to at least meet their reserve.
‘But the day of the auction was quite disappointing because the highest bidder only bid $530,000,’ Mr Requizo said.
Their three-bedroom house at 10 Coolibah Place was then relisted for private sale for more than $560,000, and sold a fortnight later for $600,000.
The purchaser was a first-home buyer, who inspected the property days after the auction, and agreed for the couple to continue renting their home of 15 years until their new house in Keysborough’s Somerfield estate is built.
Listing agent Ben Nguyen, of Barry Plant, said passing the property in, and converting it into a private sale, resulted in a higher sale price and allowed the parties to negotiate on conditions.
He said passing the property in would also make sense if an agent had interested buyers who were willing to pay more, but don’t want to buy under auction conditions because they need a ‘subject to finance’ clause or want a building inspection report done.
Compared with a hotter market in autumn, where clearance rates soared above 80 per cent, one in three properties are now passing in at auctions.
In many cases the vendor’s expectations have exceeded what the market is willing to pay, so sellers either need to readjust the price or come up with a strategy.
Nelson Alexander sales director Arch Staver said there needed to be an ongoing discussion to do something new to spark interest.
‘Because otherwise we’re doing the nonsensical thing of just letting it sit there, do nothing different and expecting a different result,’ he said.
Sellers could ask for buyer feedback from their agent, and be prepared to change the colour scheme or the way a room is set up.
They could also try a different avenue to advertise their property.
Hocking Stuart Williamstown director Joanne Royston said if a sale wasn’t reached in about a week, their next plan was usually to set a new auction date.
‘When something is for private sale and it sits there for more than a week or two, the property can tend to become stale and buyers wonder why it hasn’t sold,’ she said.
‘It does make the process very, very difficult because there’s no real urgency for a buyer to actually make a commitment or an offer on the property.’
Setting a new auction date doesn’t necessarily mean it would run through to auction, she said, because the agent could be encouraging pre-auction offers.
Mr Staver recommends vendors leave their campaign board up after their property passes in.
‘The board is a silent salesperson standing out the front of the property, declaring that it’s here, open to business and ready to be purchased.
‘Having the board ripped down immediately is an act of emotion.
‘If you’re on the market, and you would like to sell the property, you need to be on the market, and part of that means having a board out in front of the property.’