A Californian-style bungalow on a 1139-square-metre site at 290 Koroit Street was snapped up for $815,000, well-above the reserve price of $750,000.

The auction opened at $700,000 and rose by $10,000 between two bidders, before increasing by increments of $2500.

In the end it was a couple from Melbourne with plans to start a business in Warrnambool who came out on top.

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Harris & Wood Real Estate agent Matthew Wood said the vendors were thrilled with the result, despite early nerves.

"The owners were ecstatic," Mr Wood said.

"We weren't sure where it was going to sit. They're just stoked with the result they've got.

"There was really strong bidding by both parties and it was nice to see a lovely new couple coming from Melbourne coming here to start a new business and buy a new house."

He said the property's lack of a garage or carport didn't play a factor in today's bidding.

"You would suggest most times people do have some sort of shedding in some way," he said.

"But in this case, it's on such a large parcel of land right in the CBD close to everything so I think that outweighed not having a garage."

The three-bedroom property also features a sunroom or study, two bathrooms and a large decked area.

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