Auction Fliping ?

7DD4

7DD4

Went to an auction just before xmas on a property that had been reposed buy the proceeds of crime police. The property was sold under hammer for $380,000 with10% deposit and a 45 day settlement.

The purchaser was a real-estate agent.

A week later the property is back on realestate.com for $410,000

Taken all the buying and holding cost involved (stamp duty, interest on loans) I cant see how they were able to do it ??

Any ideas of the technique used ?

http://www.realestate.com.au/property-house-wa-padbury-112441659
 
7DD4 said:
Went to an auction just before xmas on a property that had been reposed buy the proceeds of crime police. The property was sold under hammer for $380,000 with10% deposit and a 45 day settlement.

The purchaser was a real-estate agent.

A week later the property is back on realestate.com for $410,000

Taken all the buying and holding cost involved (stamp duty, interest on loans) I cant see how they were able to do it ??

Any ideas of the technique used ?

http://www.realestate.com.au/property-house-wa-padbury-112441659
Click to expand...

Dummy bidding gone wrong?
 
The auction started off with me making the opening bid from behind the auctioneer. I was stood in the shade to protect my bald head from the sun then getting into an argument with him about were I could stand :eek:

There was about 8 of us bidding on the property, some guy had the final bid the auctioneer asked me for another bid told him not just yet wait till its on the market, he made a quick phone call to the bank house on the market asked me for another bid.

Told him I had changed my mind.

Hope it was dummy bidding gone wrong.:D
 
As I am in then same network as the listing agent, I sent him an email with a link to this thread. he rang me quite quickly. He told me that the property was not bought by an agent. As he is not a member, he cannot reply, however I offered posting his reply, if he would like to send it to me. If your curiosity cannot wait, give him a call. Phew, Chinese whispers .....
 
Peterw said:
As I am in then same network as the listing agent, I sent him an email with a link to this thread. he rang me quite quickly. He told me that the property was not bought by an agent. As he is not a member, he cannot reply, however I offered posting his reply, if he would like to send it to me. If your curiosity cannot wait, give him a call. Phew, Chinese whispers .....
Click to expand...

I just received a reply from Jeff Stephensen. As he is not a member, he asked if I would post his clarification of events. Here they are:-

“The property went to public auction on behalf of the CBA. The audience was told prior to the auction that the bank had given clear instructions that there would be no vendor bidding.

There were plenty of spirited bids to $390,000 which needed then a phone call to the bank to get the property onto the market, which consequentially sold at that price as there were no further bids.

Unfortunately, the highest bidder needed FIRB approval, which we only found out when he was about to sign the contract.

He couldn’t legally sign the deal on the Bank's contract, and we were unable get in contact with the under bidder.

As it was right on Xmas, it was difficult to deal direct with the bank or obtain further legal advice.

In 32 years of being in Real estate, I never had anything like this happen, nor heard of it happening to anyone else.

Our instructions from the bank was to place the property on the market at $410,000 (the original reserve price)

We wrote 2 offers last Wednesday, which the bank have now accepted a cash unconditional offer.

The process was 100% legal and totally above board.”
 
Just seems a bit too circumstantial to me. Reserve was $390,000 at auction. Then afterwards it is $410,000 and is mysteriously sold for that price when no one wanted to go $1 above $390,000 on the actual auction when it was advertised as a mortgagee sale? Perhaps it could happen since it was over Christmas but you never know...
 
cu@thetop said:
Should have signed the buyer up, took their deposit and if they didn't get FIRB approval then tough titties to them.
Click to expand...

I think that is what 99.999% of agents would have done, that's why the story is a little strange. The bank might be upset with the agent for not signing up a suitable buyer but I don't think that would be the agents fault.
 
This story is plausible.

Let me tell you something about auctions as I do heaps of mortgagee sales. In most cases we cannot advertise the property:

(i) With a price range/indication
(ii) As a mortgagee sale

I always find that during the auction campaign enquiry is average. If the property gets passed in and we get to wack a price on the property, the phone rings off the hook. Clearly buyers prefer a price and many won’t make the initial enquiry if they do not know a price range. Other buyers simply don’t like auctions.

So for the property to sell above the auction day price is no surprise to me. Simply said, once the property was advertised for a price, it would have created more enquiry and interest.
 
Peterw said:
We wrote 2 offers last Wednesday, which the bank have now accepted a cash unconditional offer.
Click to expand...

Question, isn't an auction sale the equivalent of buying unconditional? Or is this different from state to state? I thought this was at least the case in Vic.
 
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