I went to a 'strange' auction today

[Sootygirl]

Hi all, a house not far from me, was going to auction today so I wandered up for a sticky beak {as you do}. There were about a dozen people and the auctioneer went through his speel and ask for bidders to hold up their number when making a bid. This, apart from the fact that the auction wouldnt have started, if there was only one registered bidder, right?, told me that there was at least two registered bidders.
The auctioneer called for a first bid and after more encourageing, a lady bid $100,000. That was it.....no more bids. The auctioneer was on the phone to the vendor who naturally said ''no way''. It was a decent 3 bedroom house on 600sq mtrs. The land value would be $180K. I heard the auctioneer tell someone that the reserve was $190K {a fair price by my estimate}.
What puzzles me, is assuming there were at least two bidders, why didnt the second one bid $105K? Was he/she expecting to get the house for under $100K?? Thats ridiculous, so why register if you dont intend to bid?
Its not as if the next door neighbour ran naked out onto the street, chasing his wife with an axe!

 

[steveadl]

Hoping to get it passed in so they can negotiate a private sale on more favourable terms to themselves.

 

[geoffw]

Hi all, a house not far from me, was going to auction today so I wandered up for a sticky beak {as you do}. There were about a dozen people and the auctioneer went through his speel and ask for bidders to hold up their number when making a bid. This, apart from the fact that the auction wouldnt have started, if there was only one registered bidder, right?, told me that there was at least two registered bidders.

It's possible that there was only one bidder. It may be that the number is a requirement under law in order to ensure that vendor bids are not sneaked in.

I'm sure there have been many auctions were trees and power polse have bid.

 

[marg4000]

I've been to a local auction with 5 registered bidders (or 5 people holding numbered paddles, I assume they were registered). There was one "bargain basement" bid then the property was passed in on a vendor bid.

Many people recommend that you don't bid at an auction until the property is "on the market".
Marg

 

[skater]

Sootygirl, that's not that unusual.

 

[HandyAndy888]

I would think a lot of people would be coerced by the auctioneer to register, as it looks good for them. I have registered for many auctions without any intention of ever bidding, basically on the false pretense that I was interested.....

 

[Bargain Hunter]

Sootygirl,

As skater says. Not that unusual. I would think that people register so that they gat the feel for what to do at auctions, if the person who did bid is experienced they are unlikely to make a bid against a vendor bid, and as Marge says many are of the belief they should not bid until the property is on the market.

Even though you see it on TV, the auctioneer often does not state that the property is on the market. They may use phrases that suggest that you are close to the money like, "don't let this property get away from you for the sake of $5,000" but often they don't evem say this.

Regards

Andrew

 

[evand]

Agents holding an auction in the current market (especially the central coast market) is ridiculous.

What is a run of the mill, non descript house? Which part of the central coast?

 

[Sootygirl]

http://www.realestate.com.au/cgi-bi...fmt=&header=&cc=&c=88327297&s=nsw&tm=12104849

Thinking about it now, I guess if there was only one registered bidder, the auction would go ahead regardless, incase that bidder put in an opening bid that met the reserve.

Agreed, that an auction for that house, in this climate is not a good idea given the costs involved, unless the vendor is willing to let it go for ANY price.
I knew the market was depressed, just didnt realize how much! Kanwal is a sort after area since its got the best primary school on the coast and there's rarely ever more than one or two houses up for rent. I guess Tuesdays budget have people nervous?

 

[House_Keeper]

In the current market, lots of auctions seem strange.

Without several keen bidders, an auction is a waste of time for everyone and money for the vendor.

Cheers,

 

[boomtown]

I've been to a local auction with 5 registered bidders (or 5 people holding numbered paddles, I assume they were registered). There was one "bargain basement" bid then the property was passed in on a vendor bid.

Many people recommend that you don't bid at an auction until the property is "on the market".
Marg

Bit of a noobie with auctions - how do you know the property is on the market? Does the auctioneer announce it?

 

[stumunro]

a property being auctioned is "on the market'. But if the property is passed in they tend to sell it by negotiation rather then have another auction. This is what marg is referring to. If bidders see that no one is bidding most tend to prefer to wait until auction is over, putting themselves in a stronger position to negotiate afterwards.

 

[wylie]

Bit of a noobie with auctions - how do you know the property is on the market? Does the auctioneer announce it?

Very often the auctioneer does announce that "the property is on the market" or "the property will be sold today" type of statements. If in doubt, ask the auctioneer. I have been to auctions where this has been asked.

Most auctions I have attended it has been made clear that the property has passed the reserve and is "on the market", but it is a while since I have been to one, so maybe auctioneers' tactics have changed.

 

[geoffw]

But if the property is passed in they tend to sell it by negotiation rather then have another auction.

The high bidder has the right to negotiate with the vendor.

I sold my flock of bats a while back, and this is what happened. It took up to 48 hours of negotiations before agreement was reached.

I went to an auction of a commercial property in the ACT two weeks ago, and the auctioneer stated, at the start, that the right of the highest bidder to negotiate lapses when the high bidder leaves the premises. So a purchasr cannot go away to consult with an accountant etc, and then come back to negotiate.

 

[marg4000]

I saw an auction on TV, not sure which state, property passed in and negotiations commenced with the highest bidder.

Another bidder approached another of the agency personnel and said he/she was interested in the property. That person was also whisked away and entered into negotiations also.

TV show said all was completely legal - agents had the duty to get the highest price possible.

Again, I can't remember which state this was in.
Marg

 

[Dazz]

Many people recommend that you don't bid at an auction until the property is "on the market".

No point really bidding on any item that isn't "officially" 'For sale' really....cannot possibly buy something that isn't For Sale....by definition.

Of course, that's where auctions stink to high heaven, cos only the vendor and Auctioneer know the "reserve".....which isn't written down anywhere of course so the prospective bidders can never legally hold them to account.....dodgy brother games can thrive in a contractual environment where only one party to the contract can see what is going on.

In terms of putting your hand up, bidding blithely, golden gavels coming down on the 'final' call, and the whole charade of theatrics created by the podium and the big purple frilly signs etc is of course a complete furphy......simply swan up to the Vendor before the "winning" bidder signs anything and offer 1, 2 or 5K more than the winning bid......and you SHOULD be welcomed with open arms by the Vendor.....he has every right to accept your bid above the bloke who had it knocked down to him.

The golden rule of auctions is exactly the same as for private treaty sales......until both the Purchaser and the Vendor both sign off in writing on a contract, she's all still up for grabs.

As I said before, all of the brouhaha outside with hand waving, shouting and gavels is a complete and utter circus and none of it means a jot contractually / legally for purchasing real estate.

I hope that doesn't blow anyone's bubble.

 

[Bushy]

simply swan up to the Vendor before the "winning" bidder signs anything and offer 1, 2 or 5K more than the winning bid......and you SHOULD be welcomed with open arms by the Vendor.....he has every right to accept your bid above the bloke who had it knocked down to him.


Interesting ploy Dazz, have you ever done it or seen it and if so were the gazzumpers successful.

Regards Bushy

 

[wish-ga]

Could the 2nd registered bidder be known to the sellers? Didn't want to be stuck as highest bidder because they weren't genuine. But in the case of numerous bidders they could have entered the fray and driven it up a few thou. Or just kept it rolling along.

Just a thought. Since auctioneers can't take bids from trees any more. Or telegraph poles.

No point really bidding on any item that isn't "officially" 'For sale' really....cannot possibly buy something that isn't For Sale....by definition.

True but a roll of bids is the only thing that will drive it high enough for it to be officially on the market. ie in the neighbourhood the vendors are asking.

Feel sorry for the vendors who have the costs of the auction and now will probably sell it at some future point by private treaty.

 

[boomtown]

No point really bidding on any item that isn't "officially" 'For sale' really....cannot possibly buy something that isn't For Sale....by definition.

Of course, that's where auctions stink to high heaven, cos only the vendor and Auctioneer know the "reserve".....which isn't written down anywhere of course so the prospective bidders can never legally hold them to account.....dodgy brother games can thrive in a contractual environment where only one party to the contract can see what is going on.

In terms of putting your hand up, bidding blithely, golden gavels coming down on the 'final' call, and the whole charade of theatrics created by the podium and the big purple frilly signs etc is of course a complete furphy......simply swan up to the Vendor before the "winning" bidder signs anything and offer 1, 2 or 5K more than the winning bid......and you SHOULD be welcomed with open arms by the Vendor.....he has every right to accept your bid above the bloke who had it knocked down to him.

The golden rule of auctions is exactly the same as for private treaty sales......until both the Purchaser and the Vendor both sign off in writing on a contract, she's all still up for grabs.

As I said before, all of the brouhaha outside with hand waving, shouting and gavels is a complete and utter circus and none of it means a jot contractually / legally for purchasing real estate.

I hope that doesn't blow anyone's bubble.

Dazzling - has anyone mentioned to you today that you are a champion? Very nice.

 

[duckster]

I went to an auction around the corner from me and there was one bidder. The opening bid was below the reserve so the auctioner asked the one bidder to increase the bid to put it on the market. The bidder refused and was asked by the auctioner why and he said he wasn't going to bid against himself. The property was sold by private negotiation after the auction was passed in.