If you wanna know why I love what I do so much here’s a good reason…
On Saturday morning, in between mowing the lawn and hedging, I took a scheduled phone call from a real estate agent for an auction that I had registered to bid at on behalf of one of our investors.
PROPERTYOLOGY generally don’t get involved with auctions – we don’t need to. Outside of Sydney and Melbourne (markets which we feel don’t have as good long-term potential as others) an overwhelming majority of properties are sold via private treaty, especially meat-and-potato investment properties.
We made an exception for this property because the strong regional city which it is located in is already buoyant and PROPERTYOLOGY’s research suggests that the future is very exciting. Finding the right property at the right price is tough and this particular property did tick all of our boxes.
The property was going to auction because it was a mortgagee sale. I fancied our chances of buying the property for a tad less than what we would expect to pay as a private treaty sale.
Prior to today’s auction, we had appraised the property for our client for $420,000-$435,000. We had completed all of our due diligence and had developed a game plan for a variety of scenarios which may have unfolded at the auction.
There were a handful of registered bidders at the auction although it became apparent that they were reluctant to bid under auction terms (they obviously weren’t as prepared as us). I wanted to avoid the property getting passed in because all of the other buyers would be back in the game under the standard private treaty sale process and it would be anyone’s guess how much the property sold for.
So I participated in a bidding battle with the auctioneer, knowing that the auctioneer could continue to make vendor bids until the reserve had been reached. At $380,000 the auctioneer declared the property “on the market”. The other buyers remained too nervous to participate. We got it!
When I rang our lucky clients with the good news I said “…how long would it take you to save $55,000?…[$435k appraisal less $380k auction price].
He replied “…I wont have to, Simon. I’ll just save enough for your fee and get you to buy more for me…”.
While the price that we paid for this property is very pleasing what’s even more exciting is the outlook for the market where we’ve invested.
That feeling of knowing that you’ve helped someone and made a tangible difference in their life is a wonderful feeling. I’ll never tire of it!