Tauranga house goes to online auction with $1 reserve

Real estate agent Rodney Fong is selling a house through online auction with a $1 reserve. PHOTO/ANDREW WARNER

A Bethlehem home is up for online action with a $1 reserve.

The four-bedroom two-bath house on Orchard Way will go under the virtual hammer this month on website PropFi.auction.

Ray White real estate agent Rodney Fong said the $1 reserve was to generate strong interest in the house.

The strategy was to generate more interest and therefore more bidders. The more bidders, the more competition which would potentially fetch a higher price for the home, Mr Fong said.

Mr Fong said the vendors were on board with the tactic despite the obvious risk of the house selling for a price that did not meet their expectations.

"They said let's give it a crack, bring it on."

He said it was the first time the website had been used to sell a property.

"It's an exciting twist to the process. People don't need to show up to an auction, they can bid from their couch on their computer," Mr Fong said.

Buyers could register on www.propfi.auction where they would undergo a strict compliance and identification process and then be able to bid for properties online.

"I believe it's another tool agents can use to sell property. As an auctioneer myself I think there is still a place for auctions on site and in rooms but this gives us another option to sell a property."

He said it would bring in more buyers, which was the aim.

Ross Stanway, chief executive of Bayleys and Eves real estate, said putting a $1 reserve on the home was an interesting tactic.

"The owners may either be extremely dissatisfied or pleased. Time will tell."

He said the auction process had stood the test of time for centuries and the hundreds of auctions run by Eves and Bayleys had statistically achieved good results for vendors and buyers.

"The auction process is not one we will tamper with from a gimmick point of view, but if a vendor has chosen to do that, that's their choice and I hope it goes well for them," Mr Stanway said.

Anton Jones, owner of First National Mount Maunganui, Tauranga and Omokoroa, said there was always risk when going to auction, but in a market like this where there were always people on the lookout for a house, the risk was reduced.

He said if the house passed all its pre-purchase checks, he could not see why it would not reach its market value.

"I suspect in this market it will get a pretty good result."

14 Orchard Way
- The house will go under virtual hammer on October 24.
- Visit www.propfi.auction to learn more and register to bid.