Disappointing auction result

wobbycarly

wobbycarly

We are looking to upgrade our PPOR, having recently sold.

A few options around, we've had a couple of offers refused.

Thought we had a good chance today. Auction on a place that had only limited interest; only 2 Section 32's provided (us and another) and 1 building inspection (not us.)

Here's how the auction transpired:
  • Property listed at $510-$550k
  • Vendor bid at $490k
  • We bid at $500k
  • Nothing
  • Nothing
  • Nothing
  • "We will consult the vendor"
  • "You are now bidding for first right of refusal"
  • Nothing

So we go inside; the auctioneer talks to us, the assistant talks to the "other interested party" (I know, there's nothing concrete until the contract is signed).

REA advises that the reserve is $550k! WTF?! :eek:

So we counter with "split the difference - $525". (This was our Goldilocks offer - not too high, not too low) REA: "Nope, they won't budge - $550k" WTF?!? :eek:

So, here we have:
  • Auction 1 week before Xmas
  • only 2 interested parties, one of which doesn't bid, even after getting an inspection
  • Vendor not shifting on price, which was the upper limit of the advertised range - their reserve set @ $550k
  • House is worth low-$500s

I have no idea what's going on. "The market" has told the vendors that there is little interest, and certainly not at the price they want. Why go to auction if you don't want to listen to Mr. Market? Why go to auction a week before Xmas if you don't actually want to sell?

It wasn't our dream home, so we don't really care necessarily about this particular house, it's more the uncertainty about where and whether we rent, and for how long.

The 2 things I don't understand:
  • The vendor's motivation for auction, especially the timing
  • The other "competition" - why get a building inspection, and hang around after the auction without bidding? :confused:

Soooooo annoyed!! :mad: Leaves a bad taste. It's a mug's game!
 
I'm guessing the other party probably hoped to negotiate after it was passed in. Probably wanted to get it for $500K or $510K.
 
This Auction game is really ridiculous in the current market, wasting people time while setting unrealistic expectations.

Many sellers are convinced to go to Auction by the re agent. Auctions are convenient for the agent, as they can be used to pressure the seller to make a decision.
 
Last edited:
I think there are also a lot of unrealistic vendors out there too ... they think it's still 2010, the market is hot and rising.

Sorry folks. There are pocket of "hot" but only at realisitic prices.

Sometimes I think the agents talk vendors in to going to auction so that they can show unrealistic vendors what the market is really saying the property is worth.
 
You are right Lizzie, there ARE a lot of unreasonable vendors out there.

But there are also a lot of buyers who feel that any ridiculous offer they may made SHOULD be accepted, and with gratitude!!

If you feel the vendor is unrealistic, move on to another property.

We sold a property in Brisbane earliers this year, and everyone knows the Brisbane market is not exactly buoyant. We achieved around $10K less than we had listed, but $30K more than the offer from a prospective buyer who, apparently quite rudely, insisted it was worth as he had "researched the market" and "the vendors should come to their senses".

Well, we had made the decision to sell, researched the market and accepted reality. We listed the property at a fair price, knocked off $10K for a solid offer and sold within three weeks.

There are always tyre-kickers out there, both sellers and buyers.
Marg
 
lizzie said:
Sometimes I think the agents talk vendors in to going to auction so that they can show unrealistic vendors what the market is really saying the property is worth.
Click to expand...

No....it is so they can spend 2-3k of seller's money advertising their agency and then pressure the seller to sell (having already been financially committed to the transaction).
 
marg4000 said:
You are right Lizzie, there ARE a lot of unreasonable vendors out there.

But there are also a lot of buyers who feel that any ridiculous offer they may made SHOULD be accepted, and with gratitude!!

If you feel the vendor is unrealistic, move on to another property.

We sold a property in Brisbane earliers this year, and everyone knows the Brisbane market is not exactly buoyant. We achieved around $10K less than we had listed, but $30K more than the offer from a prospective buyer who, apparently quite rudely, insisted it was worth as he had "researched the market" and "the vendors should come to their senses".
Click to expand...
:eek: We did this recently; a place listed for $565, we offered $530. This was because of comparables in the area of around $500, and this one WAS a bit nicer/bigger block. Vendor wouldn't shift from $565.
Well, we had made the decision to sell, researched the market and accepted reality. We listed the property at a fair price, knocked off $10K for a solid offer and sold within three weeks.

There are always tyre-kickers out there, both sellers and buyers.
Marg
Click to expand...

This was us, too. We ended up dropping $14k from the listing price, but still achieved our 'happy with' price, and about $15k above the recent bank val.

Getting back to our failed auction, I intend to speak to the agent tomorrow, advise them that our offer is still available for a further 24hrs, after which they can get stuffed.

Interestingly, in the examples above, the first vendor was Dutch, the second German. Is this a European thing? Set the price, and not budge - just wait until someone pays it? They might be waiting a while...
 
Keep finding similar properties, keep offering low amounts and you will eventually get one good offer you think is a bargain.

Today I did my usual few hours of trolling the internet for deals - ones which I don't really want unless they are absolute bargains - I offered ridiculously low amounts on around 30 properties - I expect to hear back from 5 of them saying 'this is too low' - the rest I won't hear back from as I have probably insulted the agents. Hopefully one or two will 'negotiate' with me.

One agent - having offered 95k on a 120k property (which was listed for around 150k a few months ago and I have liked since it was listed - and in my opinion worth 140ish) - the agent emailed saying that he 'can definitely get it for 100k for you'.

I told him I was firm on 95k as I needed some money for renovations - and we are playing the waiting game. It will rent for $190 p/w and is in a great area poised for growth - and with a granny flat at the back in the future when I save up the money.

Hoping I can get it and will pay $100k if I have to.

Moral - some vendors may be unrealistic at the start but their blood will be sucked out after a while and they will surrender to the first realistic bid that comes their way (or unrealistic in my case!)
 
JWR said:
Keep finding similar properties, keep offering low amounts and you will eventually get one good offer you think is a bargain.
*snip*
Click to expand...
We're not necessarily looking for a bargain, as it's our PPOR - bargain would be a bonus. We are content to pay 'fair value' for the house that suits our requirements. Right area (for particular school), right size, etc.
Piston Broke said:
As long as your there there is buyer interest, after 500 you should have walked.
Click to expand...

LOL - we settle the sale of our own place on 20th Jan - with 2 weeks of hols thrown in. Getting a definite result would have eased the uncertainty... looks like we'll be renting for a while.
 
I tried selling my house earlier this year via an auction which fizzled out and then it remained on the market without any offers for 3 months. We reluctantly took it off the market because I was about to have a baby.

Two weeks ago we relisted with another agent, and sold for the price we wanted. We had 4 reasonable offers.

What changed so much in 5 months? Did buyers not want to deal with my first real estate agent? If anything, being so close to Christmas plus all this doom and gloom talk, made me think that we would have the house on the market for ages.

I think there are no rules in real estate. None of this try to sell in Spring business etc. There will always be buyers out there - therefore even though you and another person grabbed the S.32 - the vendor is still holding out hope that a third party will waltz in and buy at their price. And it may happen? Or in 5 months time when noone has come along, he might jump at your offer?

I agree there is nothing more frustrating when you're the highest bidder and it's not on the market. This happened with the site of my new PPOR. Lots of to-ing and fro-ing and we paid more than we would have liked. Emotional attachment argh...

Good luck to you though finding your PPOR.
 
lizzie said:
I think there are also a lot of unrealistic vendors out there too ... they think it's still 2010, the market is hot and rising.

Sorry folks. There are pocket of "hot" but only at realisitic prices.

Sometimes I think the agents talk vendors in to going to auction so that they can show unrealistic vendors what the market is really saying the property is worth.
Click to expand...

well put

spot on the money IMHO
 
Warrioress,

Did you change pictures or blurb the second time round?

Were there less houses in your price range on the market the second time?

Why do you think it sold so easily the second time?

ps - sorry for all the q's :D
 
Hi JWR

It's really strange because the pictures were exactly the same - we got the cd of the pics from the first agent. The blurb was changed but both times we had it on www.realestate.com.au and advertised in the local paper here in Geelong.

The only difference really was that we initially had an advertising campaign leading to an auction - and then when it passed it, it remained on the market for 3 months with lots of people attending the open houses.

Second time round we had a range so I don't know if this helped? Not as many people were coming through, however we received 4 offers.

There seems to still be lots of houses for sale in this suburb, so I'm left scratching my head.









JWR said:
Warrioress,

Did you change pictures or blurb the second time round?

Were there less houses in your price range on the market the second time?

Why do you think it sold so easily the second time?

ps - sorry for all the q's :D
Click to expand...
 
Its not mystical. Someone just turned up that liked your house and wanted to buy it.

warrioress said:
Hi JWR

It's really strange because the pictures were exactly the same - we got the cd of the pics from the first agent. The blurb was changed but both times we had it on www.realestate.com.au and advertised in the local paper here in Geelong.

The only difference really was that we initially had an advertising campaign leading to an auction - and then when it passed it, it remained on the market for 3 months with lots of people attending the open houses.

Second time round we had a range so I don't know if this helped? Not as many people were coming through, however we received 4 offers.

There seems to still be lots of houses for sale in this suburb, so I'm left scratching my head.
Click to expand...
 
Warrioress, was it in Geelong South? Houses are not staying on the market very long at all, it's mental.

I think people's feelings are still hurting that they're not getting the same for their places as they would two years ago, and only time in the market will help them to adjust.
 
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