Interesting Auction in Melbourne

From: Phillip Jacovelli

This article is from todays AGE about an auction on the weekend - wish I was there.

Smells a bit fishy!!



Going, going, gone through the roof
By Deborah Gough
March 26 2002

The Real Estate Institute of Victoria says it will investigate the auction of an East Melbourne mansion that was advertised at "$4 million-plus" and passed in at the weekend for $7.1 million.

The institute's chief executive, Enzo Raimondo, has also conceded that new laws might be needed to regulate the real estate industry, which has favoured self-regulation.

His comments come just two weeks after a government-established taskforce, the Estate Agents Council, recommended a series of changes to the Estate Agents Act, including more stringent laws on underquoting to buyers and overquoting to vendors.

The property at the centre of the latest controversy, Amberley, at 188 George Street, East Melbourne, was eventually sold last night for $7.1 million - the price at which it was passed in at Saturday's auction.

Warwick Anderson, managing director of agents RT Edgar, told The Age this month that he expected Amberley to sell for between $4 million and $5 million.

When bidding for the property reached $4.5 million, auctioneer Jeremy Fox consulted the vendors, Krystyna and Harold Campbell-Pretty, then continued to take bids up to $7.1 million before passing the property in.

Mr Raimondo, speaking before the sale was concluded last night, questioned the gap between the advertised price and the price at which Amberley was passed in. "When someone says $5 million-plus, I expect that to mean under $6 million, not $7.5 million. That's just a bit ridiculous," Mr Raimondo said.

He said he had spoken to the agents and an investigation was needed. "There were a number of people booing, I believe, and a number of very surprised people in the crowd," Mr Raimondo said.

But Mr Anderson defended the process, saying the sale last night to the final bidder at Saturday's auction proved "it was not a dummy bid".

Mr Anderson said the emotion associated with selling a family home of 20 years had become too much for Mrs Campbell-Pretty. "Given that she was in an emotional state, as an agent I cannot force that issue . . . she just needed a little time and I can understand that," Mr Anderson said.

He said it had been nearly impossible to find comparable properties as a price guide because other recently sold Victorian mansions had been unrenovated.

He said no reserve was set before the auction, and a "kicker", or bonus, fee was payable to the agent if the sale price exceeded $6 million.

He was not concerned about the investigation. "I think it is really a case of all's well that ends well," Mr Anderson said. "There is nothing about dummy bidding, it was sold through a solicitor for a third party."

Mr Raimondo said the controversy had come at a bad time for the industry. "Sometimes you have to ask yourself if voluntary regulation is what is needed and that perhaps laws are what is needed to make them become more responsible," he said.

He said that under the REIV code of conduct, an agent must "act fairly and honestly and to the best of his or her knowledge and ability with all parties in a transaction".
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