AUCTION TIPS - Relevance Of A Reserve
"I know when I have a meeting to set a reserve price in the week prior to auction, there is always concern as to whether the sellers have been taking on board the feedback we have passed on from prospective buyers.
This begs the question.....what is the relevance of a reserve anyway?
Obviously a reserve is important in protecting the seller's interests; however it is usually nothing more than a "wish price" for the seller. In reality, it should indeed be the price they believe the market will pay for the property. If that's not the case, then it's too high.
As long as the agent and the auctioneer have a true understanding as to why the sellers are selling, then typically we can establish how much flexibility there may be in the offical reserve.
At the end of the day, it is about achieving the best possible price and understanding the seller's motivation; it has nothing to do with the reserve.
Article Courtesy of Bruce Allom - Raine & Horne Auction Services QLD