The PROPERTY DOCTORS, Sydney Australia Novak Properties
NOVAK PROPERTIES CREW and PROPERTY LEGENDS in the industry share their experiences and knowledge. Hacks and tips to make you a smarter property GURU :) Learn with exclusive content, advice, insider info and HOT real estate industry PRO SECRETS. For sale, for lease, residential, commercial, buying off the plan, finance, mortgages, interest rates, first home buyer, investments - all topics covered. The untold real estate info you've been waiting for.
The PROPERTY DOCTORS, Sydney Australia Novak Properties
EP. 1368 HOW DO YOU AUCTION?
Lisa Novak, our special guest, shares her auction expertise, providing fresh insights and strategies to navigate the world of bidding. While auctions might not be her go-to method given the recent stable market conditions, Lisa introduces us to the intriguing 'best and fairest' approach for handling multiple offers. This episode is packed with practical advice for sellers, agents, and buyers alike, ensuring you walk away with actionable tips to elevate your auction game.
We also spotlight an extraordinary upcoming auction that has everyone buzzing—a historic property on Marine Parade in Manly. This over 100-year-old building is not just a piece of real estate; it's a canvas with endless potential, from luxury residences to commercial ventures, all set against the breathtaking backdrop of the northern beaches. Lisa and I dissect what makes this property a standout contender and why it's capturing unprecedented interest. Tune in for a compelling conversation that blends auction know-how with real estate excitement, promising both insights and inspiration.
How do you auction? Thousands and thousands of things go into it from perspective of the seller, from perspective of the agent, from perspective of the buyer. We're going to cover some inside topics today. To make you better at an auction. Stay tuned, I'm the ringleader, so let's get up. Lisa Novak, hello, goodbye, hello, goodbye, hello, goodbye.
Speaker 2:Hello, goodbye. I've got my auction hat on Actually, I have another auction hat, but I don't have it with me at the moment and it says make auctions. Great again. I love it.
Speaker 1:It was sent from a very well-known auctioneer. The red Donald Trump hat. I love that hat.
Speaker 2:Yeah, yeah, I love it too. It actually sits on my desk, but I've got the hello goodbye B-U-I hat, which I felt was quite appropriate this morning especially. I haven't done my hair yet either, so it's perfect.
Speaker 1:You've jumped on last minute, to be honest.
Speaker 2:Yeah, yeah, Quickly, like flapped on a face and whacked on a heart and we're all good.
Speaker 1:You're the backup girl, yeah, backup singer. So, lisa auctions. Why did you want to talk about auctions today?
Speaker 2:You know it's quite a funny topic for me to talk about because I don't opt for my vendors to do a lot of auctions. I actually don't believe. Don't come at me, guys, this is just. You know, this is the way I run my campaigns and we pretty much do as an office. But it hasn't really been much of an auction market the last probably 18 months. You know it hasn't been a roaring hot market. The market's been very, very stable and we have had some phenomenal results out of running private treaty.
Speaker 2:And you know, with that, if we have had multiple offers come in, which we have at times, I run what's called a best and fairest. It used to be allowed to be called a silent auction but we can't call it that anymore. It's called a best and fairest. So you know, and that's what we call everyone's highest offers absolute walk away, best offers andst. So you know that's what we call everyone's highest offers absolute walk away, best offers and their terms and conditions to us, closed envelope via a text or whatever it may be, email and it's highly confidential by a cut-off time. Why auctions today? Mark, we have got a massive auction on Saturday down at no 5 Marine marine parade on manly ocean front. Um, you'd have to be hiding under a rock if you haven't seen this property. It's probably one of the most iconic properties on the northern beaches, would you agree?
Speaker 1:oh it is. It's magical, it's absolutely magical. And the inquiry rates on the property have been astonishing. The interest on the property has been astonishing. The location is on. The property has been astonishing. The location is astonishing. There's nothing about this place that's just not incredible. So it's really been a hot contender for people.
Speaker 2:It is. It is an amazing property, I agree so, and the building itself is over 100 years old. So it's down on what we call the Fairy Bower, right on that ocean front there in manly phenomenal. That's it there, right there.
Speaker 1:It's the one you can see go back on the roof there. So yeah, it's, it's the hottest part of of the northern beaches, it's north facing, it's manly, it's on the, on the ocean, on the beach. It's just, that is just. It's just, that is just, it's just magical it is.
Speaker 2:It is, it's what I call a unicorn. It's what I call a unicorn so it's the whole building. It's sitting on about a 310 metre squared block. So it's only a small block, but it is a commercial slash, residential zoning, so the mind just goes crazy with what you could actually do there. You know, is it apartments? Is it a hotel? You know, could you turn it into maybe some sort of a luxury home with a commercial element. We recognise it needs a lot of work. It is on church land. It's on Catholic church land, what we call leasehold. And actually throughout the campaign it's amazed me how many people actually don't understand what leasehold is. That's probably a topic for another Morning Minutes, I think. Leasehold versus freehold.
Speaker 1:That's a good one, yeah, so people are prepping for this auction. Today being Wednesday, they've got two days more to prep for the auction. Their solicitors buyers' solicitors are talking to the sellers solicitor. They're reviewing contracts. They're moving money around, getting money ready for their 10% deposit and their purchase. What are the tips, as an agent, that you're going to be giving buyers in the next two days? Like you're, you're obviously going to be that the people that are, um, that are keen, that are going to be bidding, you're going to be having some conversations. What sort of tips are you going to be giving them?
Speaker 2:well, someone came up to me yesterday. I was actually showing a, had a private appointment down there and someone came up to me yesterday and said what do you think it's going to go for? Really difficult answer from a real estate agent who's taking a property to auction. Because we receive from the vendor what's called a reserve price, which is a confidential price, and that's given to us in a hard copy format usually, just sometimes moments before the auction. You know, usually within 24 hours, but it's a confidential price. It's the minimum amount that a vendor will sell for on the day. So how did I respond to that lovely person who asked me that? I said I'm not really in the betting game, I'm in the real estate game. We've had an auction guide on the property of 10 to 11 million. So I'd be thinking if you've got that sort of money or more, you might want to come down and pop your hand up because if someone says what do you think?
Speaker 1:your, your, your thoughts are constructed with confidential information as well, so that's probably not something you could share in terms of a number, to be honest, because if you're discussing a reserve price, you have knowledge of reserve price and then you're giving your thoughts on what it's going to sell for as a seller, I wouldn't be happy you telling people what you think. No, no, so it's. You are a bit torn as a real estate agent and it really annoys buyers. It bloody annoys buyers. But I think you know you just have your buyer's guide, that's it, full stop.
Speaker 2:Aim in and that's exactly right. You know, you just have your buyer's guide, that's it, full stop, aim in. And that's exactly right. You know this one. We have had an auction guide of 10 to 11 million throughout the campaign. But you know we cannot be held responsible for what a property may sell for on the day.
Speaker 2:I mean, many of you guys will remember a property that I sold, number two Riddell Street in Manly. It was also one of the most iconic properties in Manly and that went to auction about two years ago now. It sat above the Surf Lifesaving Club in Manly. It actually broke the record per square metres. It was a 400-metre squared property and that sold at auction for $21.5 million. Now if I was to put a price guide on that which was really hard because there were no other houses around there and this faced right gun barrel looking down the beachfront I would have said you know, probably 16 to 17 mil, but the property sold for 21.5 million. So you know we can't control what the market does and you know not to say that that's the case on Saturday. We just don't know right. Saturday, we just don't know right, we just don't know. But that is a good, realistic guide 10 to 11 mil.
Speaker 2:So what? What should you be doing in the lead up to an auction? Now here we are, a few days out, the contract should be getting reviewed by your solicitor, any requested amendments to the contract which is a normal part of the process that should be taking place now and that gets done via your solicitor to the vendor's solicitor and any agreed amendments that all should be agreed upon in preparation for the auction. We then receive what those agreed amendments are so that we can correlate that contract for you. Everyone's requested amendments usually can differ, so we might have you know, hypothetically we might have three contenders, all with different agreed amendments, and so we need three different varieties of contracts, each one for those purchases. We never know who's going to be buying on the day.
Speaker 1:And also this is an opportunity where a buyer can get their terms and they can make the purchase more comfortable for themselves by these requests. So, you know, use a bit of engineering, ingenuity, a bit of smarts. If you're a buyer to, you know, get it in your favour.
Speaker 2:And you can ask whatever you want. Honestly, you know everything is agreeable by sorry. Everything is possible by mutual agreement. A lot of people don't realise that Settlement terms even if on the front page of a contract it says the standard settlement of 42 days, six weeks, you can request 12 months, right, the vendor can just turn around and say no, we won't do 12 months but we're open to doing a four-month settlement.
Speaker 1:So you know it's all by mutual agreement.
Speaker 2:The other thing is you need to make sure that you've got your 10% ready or any other amount that has been previously agreed upon. We see a lot of 5% deposits these days that must be agreed upon in preparation for auction day. That needs to go through your solicitor as well.
Speaker 1:In writing.
Speaker 2:Has to be in writing. Yes, must be in writing. There's no point coming. You know, on the day you put your hand up, the hammer falls in your favour and you're like I've only got $10,000. You put your hand up, the hammer falls in your favour and you're like I've only got $10,000, there's not a huge amount. We can do about it at that time. Right, just on that. If the hammer does fall and you are the highest bidder and you are the successful purchaser, you need to be signing that contract immediately. Okay, it is an unconditional sale. There is no calling off period and you need to make sure your deposit's ready.
Speaker 1:Just to note on that, we're one of the only countries in the world that does this.
Speaker 2:Correct.
Speaker 1:So that process of you bid to buy and you can't back out, not subject to finance, not subject to building, not subject to selling your property, not subject to anything. We're one of the only countries in the world that do that. I think we're one of three.
Speaker 2:Wow, we must chat, gpt that and find out. So you know, you do need to have your deposit ready on the day. A lot of people forget to lift their bank balances. They're like, oh, I've got a $20,000 limit and I won't be able to transfer the rest until the next day. No good, you need to make sure you've got your deposit ready. Usually these days most agencies have got obviously EFT electronic funds transfer direct into a trust account. It goes into a sales trust account. Or we've got debt payment these days which is a direct payment through to the nominated bank account sales trust account and the limits are much, much higher.
Speaker 1:Lise, before we go, is there any other quick tips for auctions you can give buyers, sellers or agents?
Speaker 2:Yes, if you are looking to bid on behalf of someone or to phone bid, there is documentation that is required around that you need to let your agent know. It's absolutely fine, but there is a document that does need to be filled out in preparation for that. And also, you've just got to remember guys like have fun, just you know, you've got to enjoy the process. I see people coming into auctions sometimes and they're just sometimes and they're just, you know, a nervous wreck. I get it. Sellers, um, you know, buyers, the agent is there, the auctioneer is there to help you. Guys, you can speak to the auctioneer prior if you want to. Um, as a seller, and that's gold. Actually, vick larusso's our auctioneer that we use 99.99 of the time. He's always available to take a phone call um to chat with a nervous seller, if required do you know what my best advice is?
Speaker 2:um tell me mark, what's your best?
Speaker 1:advice. Buying or selling um through an auction is belly to belly. Make, make a auction meeting. Make an auction meeting with your agent in their office, free. Turn up for 5, 10, 15, 20 minutes and ask the agent a million questions, belly to belly, eyeball to eyeball, and have a good old-fashioned chat. If you need it, do it, it's free. And I've got to say I suggest that even for people when they're making an offer to buy a property in general, you'll get so much more out of a one-on-one with a human than doing it over a phone call or an sms or an email or through a lawyer. So a good old-fashioned ability, belly. If someone called you up today, lisa, and said I want to buy this 10 or 11 million dollar property, have you got five minutes, 10 minutes, for me to pop in the office and have a chat? Give me some tips for the auction, you'd say 120%.
Speaker 2:We've got all the answers. The only answer we don't have is what the property is going to sell for on the day. We don't know that. We don't know. Yeah, it'd be much easier if we had the crystal ball, but we don't.
Speaker 1:We don't. We don't, lisa, thank you. Anything else you want to hello, goodbye yeah, hello, hello, goodbye.
Speaker 2:Um, just finally, because I know everyone is talking about I know we did at coffee this morning mark for our breakfast coffee. Um, interest rates. You know now the last, the final of the four banks are saying they're going to come down next week. Let's wait and see what happens. I heard that NAB have already dropped their rate by 0.25.
Speaker 1:I'm sick of hearing about it. I'm sick of hearing about it. It's everywhere and it's like, okay, I get it, I get it, I know, but it's like it's so consuming.
Speaker 2:It is. It is. But you know, I think you know there's some excitement out there. There's definitely some excitement out there. Hopefully it will give a bit of relief to people, much-needed relief to people. So let's wait and see what they do next Tuesday at the RBA meeting. Let's wait and see.
Speaker 1:Big time. Have a great day.
Speaker 2:I've got to get ready for open.
Speaker 1:See you guys hey guys, cheers bye.