Three-bedroom Haberfield home sells for $600,000 more than reserve, for $5.8 million, in down market

Was it too expensive? No.

What did you think it would go to? About $5.2 million.

How was that surprising?

He went $600,000 above reserve – sellers would have taken $200,000 below reserve. They were ready to accept $5 million. They had a stash of $5.2 million and it sold for $5.8 million.

Nice home, but only three bedrooms: Sellers were cautious about how buyers would react to their smaller-than-usual family home.

It was really strange. The offers amounted to $5.65 million. Everything seemed done. The auctioneer said “Are you done?” and a bidder said, “Did you ask me if I made my best bid yet?”

I said to the auctioneer “Ask him.”

The auctioneer said, “Did I get your best offer?”

It went from $5.65 million to $5.8 million. The final raise was $150,000. The previous bid was an increase of $50,000. We had an expatriate Aussie who flew in – he was the underbid – and someone who had been missing something for over a year in the area and thought, “I’m not missing anything anymore”.

Why didn’t it increase by $50,000?

It was to say “I have more to do, I am strong. Don’t go against me now.

Normally, that scares people away. As you tiptoe in, it gives the bidder time to think “Should I go back?” This is a knockout auction.

Why were sellers so cautious about pricing?

There was no fourth bedroom. The house was configured as a three bedroom house which made it difficult to compare with other three bedroom houses. It’s hard to find many three-bedroom homes in the $5 million bracket.

Despite the falling market, bidders were ready to fight for a property that had potential and a good position on a good street.

If the house had been bigger, there would have been no problem, but it was an exceptionally good price. But this guy could see what he could do with the house.

How much will it cost to add an extra bedroom?

About $250,000. It is a heritage conservation area, so when renovating you must preserve heritage features and renovate in heritage style.

Buyers are looking for more value. They are looking to protect their purchase by making sure they get as much value as possible. This property had a bigger block, it is on a premium street and had a view of the city.

It just goes to show that people value land and value premium views and streets…even in a downturn. Position, position, position counts for everything.

Do you think we will see another outcome like this: a) next week b) next year c) next cycle d) never?

b) Maybe next year, as the market seems to be stabilizing now.

Results like this may be based on the shopper who purchased having been searching for over 12 months. New buyers arriving may have a different level of purchase criteria or a higher level of caution.

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