Crazy Auction Techniques

Did a search and couldn't find a good thread to post this in.

Went to the auction for this place yesterday just out of interest:

http://www.realestate.com.au/property-house-vic-brunswick-116474495

Pretty run down and probably needs 100k spent on it to make it a nice enough place to live in, but could be rented straight away to students. Quoted 670k-720k. Biggish crowd of 40 or so.

Anyway, auction was going along pretty steadily and the price was up to about 850k, felt like it was slowing down a few bidders dropped out, a lady was holding the bid when the auctioneer went through the calls again. This is when it got interesting.

A large, fairly imposing Caucasian man standing within about half a metre of the little Asian lady holding the bid put his hand up to go up a 1k (before this hadn't bid at all). The thing is though he then just kept his hand in the air. The auctioneer moved over and right in front of them went back and forth with the man just constantly holding his hand in the air, so each bid the lady put in it was automatically 1k more. This battle of egos continued until the lady obviously saw the ridiculousness of it and stopped with the man still holding his hand in the air at 911k.

I had never seen this kind of 'arrogance' used at an auction before. He was pretty much going to buy it for whatever and you could see some of the crowd wanting the lady to just keep pushing the price higher to bluff him at it.

Personally I believe they have way overpaid. But who knows, prices are crazy up around Brunswick at the moment, property going for much more than the inner south east such as South Yarra and Richmond way.
 
well, I have two opinions on the scenarios

Emotional purchase: let him have it! maybe he grew up in it, maybe his mother used to own it, maybe he had bid on 100 auctions in the area and missed out by $1k each time, good for him

Investor: LOSER! if it was $100k overpriced, the phrase "a fool and his money are parted" applies here, and he is not an investor, he is simply a loser, that is unless he thinks brunswick will boom tomorrow (which it might!) but if that was the case, you'd pay market price for next door, and not $100k+
 
Clearly he was employed as the front man for chinese investors as a diversion so the news media can stop frothing at the mouth over the yellow peril, and instead run with "property win for 'strayla against chinese money"
 
Personally I believe they have way overpaid. But who knows, prices are crazy up around Brunswick at the moment, property going for much more than the inner south east such as South Yarra and Richmond way.
Maybe the gentleman was just trying with his hand in the air to ask where the on-site toilet was,but when you have auction clearance rates at above 80%,gangbanger sales prices-all time low interest rates-and so much competition the person with the small hammer can play what ever game they want,till the tide turns as it always does..
 
If he had his had in the air at the end and got the property , was happy with the price he paid what's the problem What crazy ?

We've bought furniture and art through auctions over the last year . I've used this and had it used against me . On the receiving end , I was thinking , if they want it that much , they can have it ...

When I was doing it , you see the worried glances in your direction and the sense of resignation in the eyes of your opponents .......

I've found it quite effective and would happily use it in a property auction , once the property is " on the market " .

Cliff
 
This situation reminds me of an auction I went to December last year. It was for a 1 bedroom apartment in Edgecliff, Sydney, quote was over $500k. I went to the auction thinking that a reasonable price was somewhere in $560k-590k, my limit was at $580k.

At the start of the auction all was tense, nobody was willing to start it off. Then a large, physically imposing white guy (mid 30's) at the back of the room kicked it off at $480k. After a while this was raised buy a young, mid 20's first home buyer (probably). The guy would immediately raise $5k, before the girl took a while to respond. When the bidding was about $570k, the guy had just made another bid, and then walked up the room to near where the girl was sitting and said (I **** you not) "Look, don't even try me, I'm going to win this so don't test my limit" before heading back to the rear of the room. In the end the guy won the auction at $635k, and only those two made any bids.

At the end I was confused, wondering what that guy wanted the apartment for. His age and presentation suggested that he wasn't buying for himself (the place was a bit of a dump), and the price was way too high for an investor.

Two days after the auction, I got a call from the agent saying that the deposit cheque had bounced, and if I would like to make an offer in case the purchaser can't pay. I did, but later got a call saying that the new cheque from the purchaser had gone through.

The real kicker came 3 days ago when I received a call from the agent. The purchaser couldn't come through with finance, and as of this week (over 4 months from the auction) the property is back on the market. I feel bad for the vendor having to go through that, but on the other hand they just received $63.5k and will likely get a close price at auction again.
 
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