Was it overpriced? I don’t think so.
What did you think it would go for? I would have been happy with anything over $1.3 million and we nearly got $1.4 million. I was happy. The vendor was happy, too.
What was surprising about it?
They don’t ring a bell at top of the market, they don’t ring a bell when it’s the right time to sell. Sometimes opportunities pass. Things change and people pass on.
In 2018, the office I worked in at the time was working on a conjunctional sale with five vendors. There were five titles with a collective 1695 square metres and a 30-metre frontage to the north on Riversdale Road. There was big value there.
It’s better if you sell altogether due to the nature of the overlay, which is Residential Growth Zone. In Boroondara [council area], it is the most lenient overlay and zoning by way of dwellings per square metre.
It was all done off market, confidentially. Before COVID, the market was doing pretty well at that point. We had a few builders put forward offers and one stood out by value. The five vendors ended up accepting an offer around $5000 per square metre.
The deal went unconditional after due diligence. The builder paid the 10 per cent deposit and all the vendors benefited.
The builder was Stellar Constructions. This is one of a few pies they had in the oven. He couldn’t fulfil the contract. It was sold with a 12-month settlement. He had to forfeit his deposit and walk away.
The owners weren’t rapt that it had fallen over but that’s the reason people pay deposits.
Fast forward to 2021. I thought it would be a great outcome to get the owners back together and sell to a new builder. We ended up putting an offer together with a builder of greater value than what it was in 2019. It was a completely new contract. Everything was drawn up. This second offer was $5025 per square metre.
In this group of titles there were three villas in a row. One of the owners had renovated their villa with money they recovered from the deposit. That owner crossed their arms and said “mine’s a lot more than that” and wanted a separate deal.
We did all we could. There were lots of conversations, lots of meetings. But they’re very proud of their house. They’re probably just too old to move. That stopped that second deal from happening. The builder walked away.
The vendor of 386 was one of the lovely neighbours sitting patiently, waiting for those two deals to happen.
She could have sold 386 together with 384 – it was single fronted federation home – which would still give a builder a nice footprint of land. Then the vendor of 384 passed. It became a deceased estate. There were a few lawyers involved and we couldn’t get agreement to move forward.
I told my vendor that if you had sold together your value, at $5000 per square metre, would have been closer to $1.6 million to $1.65 million. If it sells by itself it mightn’t be as attractive to builders and developers.
My estimate was $1.2 million to $1.3 million. It was a bit compromised by location – it was opposite the tram terminal and close to a power substation.
We did the four-week campaign. On Saturday, I was lucky enough to have four bidders on the day. The clouds parted for me. It was magnificent.
We conducted the auction in the front yard while trams were zipping past. We opened at $1.2 million and it was a pretty slow start. I referred to my client at $1.25 million and she said: “Let it go.” I announced it was on the market and then the three to four bidders took off and came over the top of each other. It went through to $1.38 million.
The dollar-per-square-metre rate was $4120 but I had offers over $5000 per square metre twice, prior to the sale. The vendor was very much a realist. A lot of trust was built over those two years of working with her. She trusted our guidance and was happy with the result. Plus she benefited from the deposit of the first sale – a good $160,000.
What was surprising about it was the fact that in a funny market we can still attract four to five bidders at an auction for a compromised block of land on a main road. The drawcard was with the overlay.
Do you reckon we’ll see another result like this: a) next week b) next year c) next cycle d) never?
I’ve become very friendly with everyone in that little strip. We’ve been through ups and downs. Something will happen in the next month or two – 384 is going to hit the market soon. I’ll probably give the buyer of 386 the first right of refusal. He’s got a young family and indicated he’s looking to renovate and move in. But he obviously sees value in the overlay.