How to have an Auction without having an Auction

[Collector]

I came across these 2 properties yesterday while surfing re.com, very interesting way to market a property.

1. Both new listings - only uploaded yesterday (same agent)
2. Inspection only via open house this Saturday
3. Price range guides
4. All offers must be submitted in writing this Saturday afternoon

http://www.realestate.com.au/cgi-bin/rsearch?a=o&id=105543308&f=0&p=30&t=res&ty=&fmt=&header=&cc=&c=14720426&s=nsw&snf=ras&tm=1234825938

http://www.realestate.com.au/cgi-bin/rsearch?a=o&id=105544169&f=0&p=30&t=res&ty=&fmt=&header=&cc=&c=14720426&s=nsw&snf=ras&tm=1234825938

 

[Propertunity]

Perhaps the vendors don't want to fork out $'s for an auction campaign?? and the agent is expecting plenty of enquiry in those price brackets.....

 

[Perp]

I think it's a good idea, provided you're confident of getting offers.

The big advantage over an auction from my perspective is that I know that I won't buy at auction, and there are probably many other buyers who feel similarly. So this kind of marketing - effectively a tender - allows you to create the time pressure of an auction, but still attracts buyers who won't buy under auction conditions. Buyers can submit offers with conditions such as "subject to finance", and then the vendor can decide for themselves whether an offer of $240K subject to finance or a $220K cash offer is preferable.

The big potential downside is that if you don't get any offers, people who are watching the market and see it listed again after the 21st of February are going to know that it's already been rejected by the market. You therefore appear to be a distressed vendor and lose some negotiating power.

As a vendor, I'd certainly consider selling in this manner, though I'd allow a bit longer before for prospective buyers to become aware of the property's existence and do some research, say 2-3 weeks.

I'm wondering if the same vendor owns both of these properties and needs an urgent sale to avoid foreclosure.

 

[buzzlightyear]

Maybe this selling technique suits the market and the area. I doubt this techique would be as effective as in Melbourne (auction capital of the world). Personally, nopt knowing who I am bidding against and seeing the whites of other people's eyes in an auction, I find open to more manipulation and scullduggery.

Ultimately, you shouldn't pay more for an auction than you do selling through private sale. There aren't any additional costs (except maybe for the auction board).

Whether you sell by this method, set sale, auction, private sale, any property that is on the market for a while will get stale. And how many people know (and I don't mean the smart ones on SS) if they are looking at a property for the first time on the net, if this was previously auctioned or offerred for tender?

 

[Queen Bee]

Wouldn't that be called a "tender". Although they're usually a bit longer, but lots of properties in NZ are advertised as "tender" either open or closed. I personally hate them, and submitted a couple of times to see what happened. I just thought it was a lazy way out.

Cheers
QB