As an auctioneer, I see too often the frustration of real estate agents when they get handed the vendors’ reserve instructions 10 minutes before the event.
It’s generally;
“What have they been smoking, they haven’t listened to a word I’ve said!!”
but sometimes it’s;
“If I had known they would set this reserve, I would have quoted a more realistic price and we would have some bidders”.
Another incredible feature we offer agents on the SoldOnline platform is our “Decision Pending Price (DPP).
If an agent is confronted with an unrealistic reserve price, the DPP function can be used to still generate a sale.
The DPP is a figure below the reserve price which is at a level that the vendors may consider.
For example:
- Your market feedback is that the property is worth $3.6mil
- The vendors instruct a reserve at $3.8mil
- You give the owners the option to consider any offers above $3.6mil
- You set the Decision Pending Price (DPP) to $3.6mil
When the bidding reaches the DPP price of $3.6mil, our system switches off the instant notification that the reserve HAS NOT BEEN MET for 2.5 minutes.
This gives the agent and vendor time to discuss the situation and the opportunity for the owners to accept the current bid. If they accept;
- The reserve can instantly be dropped
- the property is declared ‘on the market’
- and often, further competition is created
We witnessed this tactic being employed brilliantly last week at an auction in inner-city Sydney. The agents were given an inflated reserve. They convinced the owners to allow the implementation of a Decision Pending Price which they ended up accepting. It was amazing to see the bidding take off and push the price a further $105,000 beyond the DPP.
