Discouraging ghost bidders at auction

[Piston Broke]

The laws depend on state, the rules are made up by the REAs.
I think I know more about negotiating than the legalities of auctions.
And I learnt the "other" side as I've grown more mellow (can you imagine that!) and a little wiser when REAs quietly strated saying to me "I really don't wanna deal with that "supawanka", offer the same price if you want it and it's yours".

The auction process is there so buyers can fight amonsgt themselves, so who do you want on your side? The dude with the hammer! (real or symbolic lol).
Your antagonising the person you need to charm and turn agains the others.
My attitude is simple: either I get a bargain or you won't.

I attended an auction for a friend who ended up buying a place 30k under reserve, 50k less than he thought it was worth (REAs had him lol), and 8mths later got a bank valuation of 45k more than the price. Almost 10% increase.
Needless to say he was happy and thankyou was sufficient for me.

Please don't take offense WW, I read everytyhing you post for I have great respect for your contributions to this forum.
But we can't agree on everything lol

 

[WinstonWolfe]

Winston,in QLD,from my understanding the highest bidder has the exclusive right to negotiate until the end of the Auction,or any other time specified by the auctioneer,it's legally binding once the property is on the market and you are the final bidder,but it does not always work out that way from my experience,imho..willair..

will, I'll be talking to a soli before the next auction, and he may accompany me.

When I started reading into the law surrounding auctions, I was even moer insensed. The bluff and intimidation of bidders is even less justified than I thought.

PB, you are an abrasive bugger when you want to be. But generally play fair, so no offense taken.

 

[Amadio]

Not sure if this is helpful for bidders in QLD auctions but when I was in Melbourne a lot of gray areas were being exposed.

One auction I attended was all done and dusted when another bid came in after the hammer had gone down and buyers were doing the huggypie-kissypoo rubbish, and they lost out to the post-auction bidder. The guy was so furious he now turns up, or sends friends, to bid "successfully", then goes to his car to supposedly get his cheque book and drives off.

Another guy changed his mind after bidding on a house and it was found that the REA couldn't hold him to it because auctioning wasn't actually a valid form of sale. The state had to re-write the law so that it was clearer. (link below).

http://www.lawyersconveyancing.com.au/news/auctions_exposed.asp
http://www.premier.vic.gov.au/component/content/article/2993.html

 

[WinstonWolfe]

Amadio, yes I had read these recommendations and am all for the mocktion process to be cleaned up.

• Contracts would be made available well before the auction.
• Terms and conditions would be negotiated before the auction, to determine eligibility of participants.
• Contracts would be signed before the auction.
• Purchasers and vendors would be contractually bound at the fall of the hammer, without the need to sign another contract.

 

[cu@thetop]

One of the terms of bidding at auction is that you appoint the auctioneer as your agent- which includes signing on your behalf if you refuse to do so.

I drove by an auction 4 months ago for a house in Sherwood. Pulled in to do an inspection (thinking it was an open house only) and hung around to watch.

The highest and only bid was $410k from a pair of giggling yuppies. I thought the house was worth$430-440k (it sold for 460k post auction). As the auctioneer went over to the now very smug bidders during a pause in bidding I went up to the principal of the agency and told him that if the vendors were stupid enough to let it go for that that I would inspect it on monday and me or my client would probably make a better offer. Principal goes to auctioneer and whispers to him- discussion breaks off with smug and smugger, vendor bid of $450k and passed in.

Relisted at $509k. Inspected but not interested at the time. Property sells 6 weeks later.

Footnote- was a good buy at $460 in retrospect, although not a steal.

 

[WinstonWolfe]

Some lawyer websites are stating that after the hammer falls, if someone can gets in the ear of the vendor and offers 20k more, the vendor can accept that and not the knock down price.



CU, conversely, I attended an auction that didn't make reserve but one bid had been placed.

Tried to approach the vendor inside the house, as the only bidder was being sheparded inside to negotiate. The auctioneer shut the front door square in my face, wouldn't let me anywhere near the vendor nor listen to an offer from me.

Anyway, didn't let that stop me. I went away and had a coffee and came back later. Knocked on the door and spoke directly with the vendor, who said nothing had been signed yet, but offer was at $n, so said I'd offer 5k more.

They said, great, but wanted me to make the offer via the REA.
When I rang 8am on Monday morning, the REA said the contract was already signed.

Methinks the REA and buyer were in cahoots. As I found out later, the buyer does a lot of cheap renos and flicks them back to the market via the REA.

 

[cu@thetop]

If the owner is stupid enough to entertain the other offer when knowing there was 2 interested parties then there is not much you can do.

Yes, typical agent behaviour and people trust them (because usually they are quite slick).

Only remedy is to bad mouth the agent to the vendor which wont help you in future dealings.

I get some satisfaction when I get clients looking to sell. When I do the leagals on the buy I stress to them when they sell that I need to adjust the agency agreement before they sign. Agents hate it but if they want the listing the learn to suck it up.

If an agent bugs me or is dishonest I will truthfully relate my past experience to the client and get them to list with someone else. A few agents have lost a few commissions and are none the wiser. As I don't accept work from agents they have no leverage over me so I can happily step on a few toes along the way

 

[BayView]

We're looking at buying a particular property via auction in the near future.
I am always weary of ghosts, trees, and vendor friends sticking their hand up.

It occurred to me tonight to have a friend conspicuously video the gathered crowd. I thought it might spook naughty people into not putting their finger up and the auctioneer to not take bids from trees.

Does anyone know if doing so is illegal, or that an auctioneer has any right to stop the videoing, or ask the video-er to be removed from the vendor's property?

The problem is non existent; you bid what you think it is worth - not a cent more - and only when they are about to slam the form guide against their well manicured palm for the 3rd time as they scream "are you all done?"

This is assuming the bidding is remotely near your limit, and not mega-over the advertised price range, but mega under the reserve price - as usual.

Otherwise, why waste a Saturday doing that cr@p?

Just go to the pub and get p.i.s.s.e.d while you study the ads for the private sale properties.

 

[Piston Broke]

They said, great, but wanted me to make the offer via the REA.
When I rang 8am on Monday morning, the REA said the contract was already signed.
Methinks the REA and buyer were in cahoots. As I found out later, the buyer does a lot of cheap renos and flicks them back to the market via the REA.

lol WW maybe you need to mellow your auction tactics and read my post again.

PB, you are an abrasive bugger when you want to be. But generally play fair, so no offense taken.

Not as harsh as the markets can be though, and thnx for the "fair".

Generally speaking:
There are times when you have to be diplomatic, times when you have to be arrogant, times to be humble and times to be king poo.
One thing always needed thou is confidence in what your doing, and the ability to adapt and improvise given the current situation.
It don't always turn out good, but that's part of the learning experience.
Though the most important part of the negotiating game imo is never be predictable.
When they expect you to be brash, be quiet & docile.
When they think your a quiet one, a short burst, then go quiet.
And never let them know what your thinking, not a word should be spoken as "I" or "me".
It's all about them, and the IP. The only reason you talk to them is to gather info (or ammo) about them, the property, other bidders, the vendor etc to be used later on them as a boomerang.
As i posted before, never ever ever suggest anything unethical of anybody you do biz with. Ever!
You can't help what an agent may do, or info they may offer you which may not be ethical or legal.
And they do do this often, but imo it's their problem as I never asked for it.
Truth is most REAs will say just about anything to get a sale, they are not as slick as you may think. Very few actually are.
Know their game, and beatem at it.

Listening, as always is the main game even at auctions. Walk around the auction and listen to what people are saying. If you find yourself talking, stop!
Most of all don't ever play "the expert", you know the type "yeah I think it's worth xxx, that place is beta and I.... and my....and I....blah blah blah" and whoopy doo. STFU and listen, and watch like a tiger watches it's prey on animal planet. Yeah easy to say I know...
Got some smug bidders you want to really put the pressure on? Stand behind them slight to a side so the auctioneer can see you.
I know all the books say you supposed to stand next to the auctioneer blah blah, but nothing makes anybody more uncomfortable than a competitor (in any game) standing behind them.
If they drop and you want to unsettle someone else, move around to the next contender...quietly like the stalking tiger. Of course you can step away, send a txt on the phone and move back to your desired position.
Bids from behind shmucks can be fun (and torture for them) when the bids go $1k at a time.
Once again, the game is let them play "mine's bigger than yours" and see what they got without ever showing yours.
Generally i always aim for win-win and everybody happy, but the auction process was just not made with that in mind.

darn that's enuff spilling my beans round here...

 

[WinstonWolfe]

lol WW maybe you need to mellow your auction tactics and read my post again.
.

nah, the auctioneer had tickets on himself. a tall goose with a grey handlebar moustache and a fedora hat from Redcliffe Peninsula.

I didn't do anything I've talked about above that day.

I only read about it in the Sat paper the morning of the auction, an 809 splitter with a rentable house out at Mango Hill beside North Lakes..... had 30 minutes to get there and look around.....went for 221k back in 2007. actually, reminds me I should look it up now that I've got rpdata access again.