We’ve talked before about the success our real estate agents have had with an online bidding platform called Openn Negotiation.
And while COVID-19 certainly increased its appeal and was the impetus for many of us to give it a try, we’ve found it’s a sales method we will be holding onto beyond the pandemic for some properties.
Here’s a case study of a recent sale that demonstrates how this online bidding platform can benefit both sellers and buyers.
Meet Troy Reeves
Troy Reeves is a partner with Altitude and has over 20 years of experience in real estate. He’s an expert in negotiation and truly values communication and making the sales process smooth for his vendors and buyers. He also has a passion for real estate, and his depth of experience in our local market means that he’s willing to try something new and innovative for the right property. That’s why he chose an online auction for 46 Jones Avenue, Warners Bay.
46 Jones Avenue, Warners Bay, is one block back from the waterfront. It is a much-loved family home but the owner had made the tough decision to move on.
The 3 bedroom property is in need of repair, but it backs onto a creek reserve. The large 1231sqm block is in a blue-chip suburb, close to good schools and transport, and we knew it would hold a lot of lifestyle appeal to those with some vision. Jones Avenue is a quiet cul-de-sac, and you could literally push your boat out the back yard into the creek. Pretty spectacular.
But it isn’t without its challenges: a flood zone, and the fact that the house would be considered a knock-down rebuild by many buyers could have counted against it. So could the fact that it didn’t fall under complying development guidelines, and couldn’t be used to develop townhouses.
We knew a lot of people would fall in love with the location, but they may need some time to investigate the things that were not insurmountable, but not immediately straightforward either.
Comparable property sales in nearby streets suggested it was worth $800,000 to $900,000. We were confident that if we had used a typical sales method and given buyers a price range to buy it via private treaty we would have probably achieved over $900,000.
Had we chosen to proceed with a traditional sale we could have had the cooling-off period fall over.
But we believed that if we used Openn Negotiation, and ran an online auction it might spark more interest. It would give us more time on the market to allow buyers to do their research, and allow more buyers to become interested.
In addition, choosing an online auction allowed buyers into the mix who had pre-approval for finance as well as those who had unconditional approval for finance. It widened the pool.
Openn Negotiation runs online, over a period of time, different to a typical auction. It’s a bit more like eBay. Anyone who places an online bid is kept updated along the way. The bids are clear to see, and it offers complete transparency to both the buyers and the seller.
When someone makes a bid, it’s not automatically up and live in the system. The agent reviews it and sees if they need a finance clause. And the owner is kept informed all the way along.
Unlike a typical auction, the online bidding starts the day you hit the market. We received an opening bid of $450,000 on 22 January. Over the next 23 days, we had 40 bids, placed by 13 different qualified bidders. The auction ended up being won by a final bid of $1,145,000 on 10 February, smashing the $900,000 reserve.
What are the benefits of Openn Negotiation?
One of the advantages is the auction starts the day you hit the market. But it doesn’t have the fast-paced drama and intensity of a normal auction, where it all flashes past in a few very high pressure minutes. Instead, the bidding takes place over a longer period of time, but you have the option to sell at any time.
We were in constant communication with the owner as the bids came in, and kept all the other bidders in the loop.
Do buyers and sellers like this sales method?
In our experience they absolutely do. The seller of 46 Jones Avenue was delighted with the sale price and the smooth sales process.
It’s a very good platform for sellers who are worried by auctions. You haven’t got a crowd of people on your front lawn. There’s no high-pressure situation. There’s more time and there are no on the spot decisions. The beauty of it is that you also don’t have to wait for a certain date or time, you have the freedom to close earlier and bring the date forward.
The buyer feedback has been fantastic. They tell us that they hate the smoke and mirrors of best and final offers, and prefer the transparency of this method.
We feel that Openn Negotiation pulls all the positives out of both auctions and private treaty sales and combines them into the one platform. Buying or selling a house is a daunting experience for anyone. This method allows you to do it from anywhere, with full transparency and control.
Naturally, you need to choose the right sales method for each individual property. Online auctions are not a one-size-fits-all approach for all properties. But in the case of 46 Jones Avenue Warners Bay, we’re pretty sure an online auction with Openn Negotiation was the right decision.
If you’re interested in making Lake Macquarie, Maitland or Newcastle the location of your new home, contact our team today.