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We're auctioning our old house on Saturday.
We're pretty confident that we will make our reserve but FIL says we should set our reserve higher than we want and higher than market value so that we can negotiate with the winning bidder for more.
If anyone has any expertise or insights I would really appreciate your thoughts.
I have to disagree with your FIL.
Our place is also up for auction on Sat and we've been in the market seriously for about 12 months.
In my view the reserve is what you want to get. So many places have not been selling at auction in the last few weeks you risk the property passing in if you set the reserve too high. If it doesn't sell at the auction you lose the momentum of the campaign and the buyers then have to be chased up individually.
Just me but I'd set the reserve balancing what you want and where the market is at the moment in your area.
Good luck with the auction!!
Thanks Fiona.
My concern is that once the property passes in you don't really have a strong hand to bargain with and as you say the clearance rate has really dropped off over the last few weeks.
I was really comfortable with our reserve because it was a reasonable price for the house but at the same time a sizable profit for us. I was also hoping that we would go over our reserve at auction because once the house is on the market bidding seems to pick up a bit.
bump.
I think you've answered your own question. If reserves are too high it usually stalls bidding which isn't good, most times once the property is "on the market" (aka reserve has been met) there's a little boost to the bidding.:
For us we've always set a price we're happy with, it may not be the absolute most we might want for it but something we would be content with so that if we get more it's a nice bonus.
Best of luck for Saturday I hope the bidders go crazy!