stupid auctions

We recently went to an auction where there were a dozen or so properties under the hammer.

We had put an offer in prior to the auction (on the property we were interested in), of $420k. The vendors declined and said they would like to go to auction. We discovered that they had actually paid $500k for the property in '07, so they clearly wanted to get closer to that mark.

The agent had been in constant contact with us up until the day of the auction, as he told us we were the only people interested and he told us he wasn't even expecting any other buyers to turn up at auction. Anyway, we discussed our limit before the auction and agreed that we wouldn't go past $450k. When the auction for our property began, i had decided to hold back and bid when we were close- i wanted to see if there were any other serious bidders. Before i even had a chance to bid, it was up to $460k, so my wife and i decided to just sit back and see what happened. What happened over the next half hour was what really confused me- during the auction we had 3 agents come up to us and kept hassling us about what our limit was and whether we could go to $470k- to which my response was- "the bid is already higher than what we are willing to pay- and why in the world would i tell you what our limit was??"
Anyway, the auction was put on pause at $470k and they went on to the next property. Once the next property went through the same process and was paused, they came back to the one we had been interested in. During this time, we had been paid 5 or 6 more visits by the agents! When the auction resumed, the auctioneer announced there had been an increased offer to $490k......this is where it ended and he announced "good luck with your post auction negotiations..."

All of this, til now, seemed very pushy and over the top, but i understood why everything was happening....then after the auction, the agent came to me and asked what we'd be willing to pay, to which i gave him the same response i'd given a dozen or so times before to him and his colleagues. He then said the most puzzling thing "I reckon you could still get it for $490k, possibly $480k or even $470k..."

???????????????????????? Can anyone tell me why he would say that after the highest bid was passed in at $490k???????

After this experience, i don't feel at all comfortable with the tactics which seem to be at play at these auctions.

Further to this, the whole event seemed to be a gala show which provided a forum for the agency to big-note themselves and build their name-brand (probably at the cost of the vendors of the properties at auction).

I might also point out that while there were over a dozen properties at auction for the night, only one small block of land sold, and every other property went through this long, drawn out process which just seemed to go nowhere!

By the way, the property is still advertised online over a week later!

Yes, stunner isn't he

I am super hot...

I haven't been paying attention to the housing market - but have things really got that expensive? Or is that just southerner talk?

My district still has stacks of houses that sell (normally or by auction) for under $400K. I would think that was expensive?

I've noticed more and more houses selling before they even go on the market officially - is it possible a lot of sales aren't even being fully reported?

J.

Well i was wondering how long it would take for someone to wake up.

Auctions, since time immemorial, mean one thing, and one thing only - desperation sale.

However, these days, agents talk it up as a "modern "way to sell........HORSESHIT. As soemone said, it takes one emotive buyer to go berko and pay too much. But most of the time, they are not to be seen at auctions. MOST auctions nowadays are all the same
- a farcial ceremony of hyped up agents with insincere/fake vendor bids
- a useless exercise for the vendor, but good for the agency because of exposure, and the auctioneers hefty fees, whom is employed in the agency quite often. An auction lines the agencies pocket, they make money out of the vendor whether he sells or not. This is the great con.
- auctions are mostly attended by people who are after a bargain. Most auctions are passed in (this does not apply to a hot market, only normal times)

If you are not desperate, and your house is marketable, and you want a decent price for your house, NEVER AUCTION!!!!

Similar thing happened in a street near me last week. The last $100,000 took over 20 minutes going up in 1 & 2k bids between 2 bidders (got rather boring to watch). Eventually sold for 1.34 mill. The house was an old weather board dump. $1 mill in the inner melb burbs doesn't really buy much these days.... really scary!

LOL @ Sharee!!

They also do it as it is great advertisement for their agency paid by the vendor.

There is also no cooling off period and cannot be subject to finance, so the sale cannot fall over.

Auctions will get lower prices than a private sale IMO. A GOOD agent will get a buyer to pay the highest amount they will pay. At an auction this buyer will only have to pay as high as someone else will pay.

eg. Buyer A is willing to $650k, Buyer B is willing to pay $600.

Buyer A will only have to pay $605k at an auction, but by private sale the agent should get them up to $650k.

Also a lot of buyers won't buy at auction.