Dutch Auctions in Australia

[TILT]

I want to auction my unit by dutch auction in Queensland where the auctioneer starts with a high price and reduces the price until sold.
If the property dosn't sell above the reserve the bidding continues downward until a bid is made and the final bidder gets the option to negotiate up.

Are there any auctioneers in Qld that do dutch auctions?
Are they being used in other states to sell property?

Clearly the realestate industry would hate such a transparent auction system
because it limits vendeor crunching and gets the highest possible price for the vendor. As Jenman says,traditional auctions only get one dollar above the second best price and leave the vendor wide open to vendor crunching

Has anyone had any dealings with reverse auctions .

 

[Bigtone]

Clearly the realestate industry would hate such a transparent auction system
because it limits vendeor crunching and gets the highest possible price for the vendor. As Jenman says,traditional auctions only get one dollar above the second best price and leave the vendor wide open to vendor crunching

i have seen a few dutch auctions in melb but only when vendor wanted to sell b4 auction and some buyers about or there were 2+ keen buyers on a private sale and the dutch auction system was used to sell the property, i have never seen one advertised upfront as the preferred method of sale.

I have seen lots of auctions but have never seen a bid increase of one dollar, so it might happen but it would be very rare the buyer pays one dollar more than the underbidder.

Not sure of the logic on why the real estate industry would hate any system that meant the vendor didn't need to be crunched and also achieved the highest price and of course the highest commission, maybe agents simply don't think it would work? It is your property , if you want to do a dutch auction choose an agent that will do it but of course don't let him crunch u if it passes in!

One last thing using Jenman's name to add credibility, well you lost me there.

 

[wylie]

I think your biggest problem would be getting people to attend. Many people HATE normal auctions and will not, or cannot, bid under auction conditions. They go to the auction hoping it will be passed in (which is highly likely these days) and they then negotiate with the usual terms (finance, building and pest).

To get these people to go to a dutch auction where they don't really understand the concept would be difficult. You might get some sticky beaks coming to watch a dutch auction, but I don't think you will do any better (probably much worse) than a normal auction.

Why not list it at a price that is slighly higher than you are prepared to sell for. That gives people a starting point and I believe you would do much better that way even than an auction, unless it is something pretty special.

My thought process is that at a normal auction I know that someone else (or possibly a tree ) wants the house as much as I do until the other bidders slowly reach their limit. I know I am paying not much more than someone else was prepared to pay.

With the dutch auction, say I love the house and jump in early so as not to miss it. I'll never know if I am $50K over what the other potential bidders think it is worth. I would NOT attend a dutch auction.

I also HATE tenders for the same reason. One property show in the UK saw a young couple pay 80 thousand pounds over the next lowest bid in a sealed bids situation. They didn't go ahead with the purchase. What a waste of everybody's time.

 

[TILT]

Some good points Wylie.Thanks
Dutch auctions work at the Sydney fish markets and in Holland at the tulip auctions but i suppose it is a matter of education and this might take time.
Why would people be more hesitant to purchase realestate through a dutch auction than fish?

I hate traditional auctions as they are just an exercise in vendor crunching and commiting vendors to a excessive marketing campaigns . They only achieve a bid slightly above the second best bid,which may be thousands below what the winning bidder was prepared to pay.

A sealed bid process is similar to a dutch auction in many ways and has proved popular in england but not in Australia.

 

[marg4000]

Why would people be more hesitant to purchase realestate through a dutch auction than fish?
.

Surely you are joking.

....aren't you?.....

Marg

 

[mrmonopoly]

Have to agree with the other posters in that I would personally never buy at a dutch auction, or sell for that matter.

Surely you would want to market to as broad a pool of buyers as possible in order to encourage competition?

I guess you can always fall back to private treaty if it fails. But why waste time and over complicate things in the first place?