Did anyone really think that the property recently sold in Hamilton at a no reserve auction was really going to be sold at a knock down price of $5 or $25,000 or even $100,000? That was the question posed when the first article appeared in the NZ Herald on the 3rd September as the real estate agent who owned the house was quoted as saying "it doesn't owe me much so that's why it doesn't really matter what I get for it."
Sure he said that to the journalist; but he knew full well that if he generated enough interest through advertising to create some competitive bidding the property would sell for what the property was really worth and the fact that the reserve was $1 as opposed to the CV of $240,000. Property is sold for what a willing buyer is prepared to pay and a willing seller is prepared to accept. Ensure the property is well marketed and you will create the right environment for a true sale - that is what happened this time.
The owner of the property (the real estate agent) has not opened up a new way of selling. Auctions are a part of the real estate industry. All he did was take advantage of the uniqueness and media interest in the marketing tactic (not a new concept) of having a no reserve auction to generate interest - and interest he did generate as the coverage in the NZ Herald gave him massive free advertising ensuring everyone would be keen to see what it sold for and ensure the property was made known to prospective buyers.
The property sold for $232,000 - it was a successful sale, the result of a thorough marketing campaign that used a arresting component - that is what was the factor in the success - no reserve auctions only work when they stand out. It is very unlikely that we will see many more as the risk of a lower than acceptable sale price rises the more of these type of auctions are undertaken as the novelty factor lessens.