Far out Friday: $1 reserve tactic pays off in virtual auction

by NZ Adviser03 Nov 2016
A Bay of Plenty four bedroom house has sold for $700,000 in a virtual auction on website PropFi.auction, after its $1 reserve generated the intended competitive interest among bidders the NZ Herald reports.

Ray White real estate agent Rodney Fong said the vendors were up for the $1 reserve to attract more bidders leading to more competition and ultimately a higher price, despite the risk that it could backfire and not meet their expectations. 

"They said let's give it a crack, bring it on," said Fong, adding it was the first time that the website had been used to sell a home. 

"It's an exciting twist to the process. People don't need to show up to an auction, they can bid from their couch on their computer."

Potential bidders on the house had to register on www.propfi.auction and were required to complete a strict compliance and identification process before being able to participate in the auction. 

According to Fairfax earlier estimates valued the property at $800,000, $100,000 more than what it sold for. 

Bayleys and Eves real estate chief executive Ross Stanway said, "The owners may either be extremely dissatisfied or pleased. Time will tell.

"The auction process is not one we will tamper with from a gimmick point of view, but if a vendor has chosen to do that, that's their choice and I hope it goes well for them.”

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