But doesn't the vendor normally set the reserve on the day of the auction and the guide price is determined by the agent not the vendor?
I went to an auction that was quoted $900k-1.1m. At $1.08m, the agent declared the property was on the market.
The risk was on the vendor. It could very well have sold at $1.08m and nothing more.
In the end, people bidded it up to around $1.5m.
If you were a vendor, you don't go around "under quotting" to atract more people. You quote for the price you want to sell for, and hope people come bid. Seriously, would you quote your house at five dollars and set a reserve price at five dollars hoping people would actually see this as undervalued and bid it up to millions? What would you do if no one did that and all you got was five dollars? You selling your house still?