Underquoting

I attended an open house on Thursday 18th of February in Cumberland Ave, Balwyn North. The house was being sold by Hocking Stuart and was advertised for $770,000- $830,000. I rang the Balwyn office to confirm inspection times and at the same time I asked the Property Manager if the price being quoted was really "the price". I was getting tired of going to open houses only to see the house sell for $100,000 over the quoting price at auction. I didn't want to waste my time nor did I want to waste the agents or vendors time. The agent reassured me that the quoted price was correct and that although he could not control what bidders did on the day of the auction, the reserve was set between the $770,000 and $830,000.

The house was set in a nice leafy street, it was on an elevated block of land 668sqm and it was reasonably close to Greythorn Primary School, Westfield Shopping Centre and Elgar Park. The house for sale required renovation. It had an old green "funky" kitchen, large front windows and creaky floors. Pantry was covered by curtains and the bedrooms were dark and in need of attention. Laundry was awkwardly placed in the center of the home. Based on the homes state, the price quoted was reasonable for the area but still a little on the high side, considering the fact that the house required a lot of renovation (by my standards anyway).

The auction was set for the 27 of February 2010. A very busy day for auctions. I did not attend the auction simply because I did not believe the house was going to sell for the quoted price, and I was right. Guess how much the house sold for? $1,080,000.