Auction Ettiquite

From: Gidget .


Hi everyone!

My husband and I are new to PI and before we buy, have been going around to auctions to get an idea of how auctions work and what property prices are like in various areas. We've been doing a bit of home-work regarding how we go about accessing our equity to buy. We've learned about deposit bonds, but I'm not sure how these work in an auction situation. If you're planning to use a deposit bond and/or if you want to put down a deposit other than 10%, do you have to let the auctioneer know before the auction?

Any comments would be appreciated.

Gidget.
 
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Reply: 1
From: See Change


Hi Gidget

not sure on the legalistic answer to this question , however we went to an Auction two weeks ago and in his preamble the auctioneer said he had been asked if Deposit bonds were acceptable as a deposit. He said that the vendors were prepared to accept a deposit bond. From the way he phrased it I came away with the feeling that the vendor wasn't under any obligation to accept it.

happy investing see change
 
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Reply: 2
From: Paul Zagoridis


Deposit bonds at auctions are easy. I just fax the agent before the auction stating I intend to use a deposit bond (I make it a condition of my bidding so include all other conditions). The agent normally gets them cleared (or not) from the vendor or vendors solicitor.

On the day of the auction I hand the auctioneer my bidding conditions (as accepted by the vendor).

Reducing deposits below 10% is tricky. Most agents will fight it and the vendors solicitors hate it. I've only gotten that accepted once and didn't win the auction.

Remember there is no requirement for the vendor to accept any special conditions from you. If you don't like their terms don't bid.

Paul Zag
Dreamspinner
Oz Film Biz is at
http://www.healey.com.au/~paulz
 
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Reply: 2.1
From: Gidget .


Thanks for the advice Paul. I didn't know you could get special conditions approved prior to the auction (sounds like I still have a lot to learn!). Thanks for your help.

Gidget.
 
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Reply: 2.1.1
From: Paul Zagoridis


Oops I forgot a very important point...

In most cases the Vendor will say No to your conditions.

But it doesn't hurt to ask.

Actually Peter Spann recommends being friendly with the auctioneer (and treating the agents as they deserve). I used to be quite nasty to auctioneers - asking "is that a genuine bid?" and equally confronting questions.

Given Spanny is richer than me, I'm changing my strategy. It's still hard to picture the sleazy, lying auctioneer as my friend though.

Paul Zag
Dreamspinner
Oz Film Biz is at
http://www.healey.com.au/~paulz
 
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Reply: 2.1.1.1
From: Jude H


Paul,

What is wrong with asking is that a genuine bid? I realise it will put noses out of joint but I'd rather that than let them play their games.

Jude

~ Never take no for an answer from someone not empowered to say yes ~
 
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Reply: 2.1.1.1.1
From: Paul Zagoridis


Jude,

There is nothing wrong with confirming the bona fides of a bid. If asked I believe the auctioneer must disclose it (if he knows). They definitely must answer questions about vendor bids.

It really upsets auctioneers though. Actually "upsets" is an understatement. The reaction is more like questioning their virility. Not a way to win friends and influence people.

So it takes a certain reckless flair to do it.

Paul Zag
Dreamspinner
Oz Film Biz is at
http://www.healey.com.au/~paulz
 
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A

Anonymous

Guest
Reply: 2.1.1.1.1.1
From: Anonymous


They are there to use all the tricks to squeeze every dollar out of you. Oh, and they do work for the vendor.
I say, stuf 'em. Auctions are war! If nothing else, such questions will only unsettle your opposition.
Each to their own.

Every one should go out and buy "Confessions of a Real Estate Agwnt".
Sam
 
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Reply: 2.1.1.1.2
From: GoAnna !


Hi Jude

I have done this at an auction and been successful. We were bidding on behalf of a friend who had no experience or confidence at auctions.

I developed an awful feeling that we were bidding against a lamp post. Demanded to know who we were bidding against. People either looked around at each other or stared at their shoes. I asked one man (who i thought was the dummy) staring at his shoes if he was bidding. He refused to say. There were no more bids. The property passed in well under reserve.

When inside the agents tried to pressure my friend to pay the asking price. She refused because she was more scared of us than the agents and she bought it for our final bid but only after the vendor has agreed to give her unrestricted access to paint, recarpet etc during settlement period.

So yes, question the bids but don't expect them to love you for it. It was not an area I was intending to buy in any time soon so i had nothing to lose.


GoAnna !
Why not go out on a limb, that's where all the fruit is. (Mark Twain)
 
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W

WebBoard

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Reply: 2.1.1.1.2.1
From: Andrew Pennisi


Have a look at jenmans 7 rules for buying at auction.The most important rule at an auction is NEVER BID UNTIL THE PROPERTY REACHES RESERVE. I use these technics all the time. The last 2 home I purchased on behalf of clients where $40,000 AND $15750
under what they where happy to pay and this was in the hot melbourne market, 1 in Essendon the other in Collingwood
http://www.jenman.com.au/REM_pg38.php
 
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