A waterfront bungalow on the Whitsunday Islands is set to be auctioned without a reserve price, and could potentially be sold for just $1.
Marketing agent for Ray White Whitsundays Steve Marks said it was not the first time he had auctioned a property without a reserve price.
“I did it about five years ago for a developer selling the last block in the estate, and it was pretty hair-raising. The first bid was $5,000 and everyone went quiet, and I nearly hit the floor but we ended up getting a good result that day,” he said.
“It’s no different to any other auction. It just removes the safety net. There’s a saying that water will find its natural level and this will find its value.
"We just don’t have the security of not hitting reserve, so it puts more responsibility on the agent.”
The bungalow is located on Long Island, which lies halfway between the Australian mainland and Hamilton Island in Queensland’s Whitsunday Island Group, and is close to pools and resort facilities.
For the past 10 years, Palm Bay was managed by Peppers Resort, but has recently changed management.
“It’s hard to put a price on it based on returns because it’s just getting a new energy and life. There haven’t been any pre-sales to base upon, so we couldn’t fairly put a reserve on it that will relay to the marketplace the urgency of the sale. The owners really want to sell it," Mr Marks said.
“The best way to do this was to be completely organic and let the market decide the price.”
For the successful buyer, the bungalow will serve as a holiday home and an investment property.
“People can get any income on the way through and for the rest of the time, they can use it for six weeks for holidays," he said.
Mr Marks said an auction with no reserve price was a risk, as the responsibility was entirely on the agent to achieve a strong result.
“It has to sell," he said. "The vendor cannot place bids on behalf of themselves, so really it’s the most organic way to find the price of a property. There are no shortcuts.
“It’s our job to get as many people to the property and see it as much as we can.”
Mr Marks’ advice for agents considering a no-reserve auction was to get a vendor who was highly motivated, aware of the risks, and confident in their ability to deliver a result.
“You can’t blame the market, or blame the marketing, or blame the vendor. It’s completely up to you to get the price. There are no excuses,” he said.
The auction will be held at Coral Sea Resort on Monday 18 November at 6pm.