Sold to lower bidder at auction -- HELP please

Hi,

Very new to Somersoft forums. Anyway, I had been for an auction last night to secure my first IP. I was the highest bidder amongst all but the property was passed in with a vendor bid of $500 more.
I then tried negotiating a sale price with the agent (who also happens to be vendor with 1/3 share in the property). I matched the vendor bid and the agent said he would get back to me the next morning and I came home.

Today I called him to find out that the property was "SOLD" to a bidder who had bid less than me. The agent said it was a "genuine" mistake from his side. Instead of calling me, he called the girl with the other bid and signed the contract of sale last night. I find this a bit hard to beleive since I had several conversations with the agent over 2 weeks and he definitely knew me and my number.

Still hard to digest the fact that I was negotiating with him after the auction in his house and he couldn't remember my offer. I really feel cheated and tricked. However, legally although I was the highest bidder, I do NOT have the right to claim the property as my bid was outbid with vendor bid by $500 but needless to say I feel so disappointed as I felt I was getting a very good deal. The agent apologised today and said he can't cancel the contract with the girl now as it is unethical. Bu I guess what he did to me (and his partner with whom he is separating is also unethical)

I know there are many experienced people here on the forum with ideas. Any ideas would be welcome and much appreciated.

Thanks
 
Wow that sucks.

I can only think of two real reason as to why that happened.

The agent really really didnt like you or didnt think you were able to front up the cash.
 
However, legally although I was the highest bidder, .......
Yeah, unfortunately there is no 'legal' about it. It is just one of those silly rules that REAs make up about the highest bidder being able to negotiate with the vendor, first.

I really feel cheated and tricked.
Bottom line is, after the auction he can sell to whomever he likes. He did not like you, so he did not sell to you. :( If he tells you the real (genuine) reason why he did not sell to you, then he can get in hot water - hence the pathetic excuses.
 
Thanks Propertunity. Well even if take on board that he didn't like me, the assurance he had given me before the auction is "this property won't be sold without you getting a chance to put in your best offer." Alas, I'm starting to realise that I shouldn't take anything that a REA says at face value.
 
the assurance he had given me before the auction is "this property won't be sold without you getting a chance to put in your best offer."

Being just a little bit cheeky here; but, wasn't the auction your chance to put in your best offer? :p

Beyond that, as others have suggested, it doesn't appear that anything illegal has happened here. Now that the dust has settled though, I'm sure that it will prove to be a valuable learning experience. Good luck with the next deal!
 
I can only think of two real reason as to why that happened.

The agent really really didnt like you or didnt think you were able to front up the cash.
I reckon the agent spent the evening chasing up all the other potential buyers to suss out whether there were any potential better offers out there before accepting MelInvest's bid this morning. I suspect that this "other bidder" surprised him by coming up with a pretty decent offer last night, and he just thought "heck, that sounds good, let's run with that". If he'd waited until this morning to get in contact with you, MelInvest, you may not have been willing to offer any more than this "other bidder" offered last night, and/or you may not have gotten to contract today anyway. If somebody else was prepared to sign an unconditional contract for "enough" last night, I'd say he just decided to take it while he could.

If the vendor bid was only $500 higher, and you were prepared to pay that much (as I assume you were since you matched it later anyway), why didn't you just make another bid at the auction and secure it?

Perhaps another lesson for you from this experience is to act boldly and decisively, when you think you've found the property you want.
 
Today I called him to find out that the property was "SOLD" to a bidder who had bid less than me.

Welcome to the forum.

Just out of curiosity, how do you know the other party's eventual offer was lower than yours? (i.e. could they have raised their offer above your last offer?)

The Y-man
 
Just out of curiosity, how do you know the other party's eventual offer was lower than yours?
I don't think MelInvest is asserting that; I think the point was that as the high bidder at the auction, MelInvest understood they had the right to "negotiate out".
 
Welcome to the forum.

Just out of curiosity, how do you know the other party's eventual offer was lower than yours? (i.e. could they have raised their offer above your last offer?)

The Y-man
Y-man,

When I called the agent, he said the property was sold for $341K when my offer was $342K. He did admit that it was his genuine mistake and he had lost money on this deal but it was too late to stop the contract.
I asked him if he could speak to the buyer that it was a genuine mistake on his part but he said that it was unlikely he could chaneg things now.

See, the only reason I feel a bit disappointed is that he knew very well who the highest bidder was as I was ready to sign the dotted line that night but he wanted to speak to his partner(vendor) to see it that is OK. He could have well gone ahead last night and finished it off with me as the highest bidder instead of giving it to a lwer bidder.
By the way the reserve was 350K and no one in the crowd agreed to bid for the reserve. The agent even asked me if he could call me at work to let me know the answer. But i think he goofed up and called someone else that same night (or was it intentional? ...i dont know)

Cheers
 
I reckon the agent spent the evening chasing up all the other potential buyers to suss out whether there were any potential better offers out there before accepting MelInvest's bid this morning. I suspect that this "other bidder" surprised him by coming up with a pretty decent offer last night, and he just thought "heck, that sounds good, let's run with that". If he'd waited until this morning to get in contact with you, MelInvest, you may not have been willing to offer any more than this "other bidder" offered last night, and/or you may not have gotten to contract today anyway. If somebody else was prepared to sign an unconditional contract for "enough" last night, I'd say he just decided to take it while he could.

If the vendor bid was only $500 higher, and you were prepared to pay that much (as I assume you were since you matched it later anyway), why didn't you just make another bid at the auction and secure it?

Perhaps another lesson for you from this experience is to act boldly and decisively, when you think you've found the property you want.
No perp, the offer he accepted was a lower offer. He confirmed this with me today and said it was in error. The reason I feel let down is I lost because of his goof up and NOT because I hadn't put my best offer. I think my offer was the best and I was ready to sign the deal last night itself. Apparently he made me wait till this morning and sold the property to soemeone else same night. :(
 
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Being just a little bit cheeky here; but, wasn't the auction your chance to put in your best offer? :p

Beyond that, as others have suggested, it doesn't appear that anything illegal has happened here. Now that the dust has settled though, I'm sure that it will prove to be a valuable learning experience. Good luck with the next deal!
Thanks....I'm still learning this PI game. FYI... this was my first auction and I had read a lot on SS and sort of prepared myself for the event. Maybe there is something better in the pipeline.....:)
 
As much as you may want to tell guy a piece of your mind, just remember you still have not brought a property and may need this agency in the future.

Lesson learnt and a good one at that.

Cheer up. A few more weeks at looking at properties.:D
 
When I called the agent, he said the property was sold for $341K when my offer was $342K.
MelInvest said:
By the way the reserve was 350K and no one in the crowd agreed to bid for the reserve.
No perp, the offer he accepted was a lower offer. He confirmed this with me today and said it was in error. The reason I feel let down is I lost because of his goof up and NOT because I hadn't put my best offer. I think my offer was the best and I was ready to sign the deal last night itself. Apparently he made me wait till this morning and sold the property to soemeone else same night. :(
I hear what you're saying, and you're right, I had misunderstood. It's disappointing, but my point is that perhaps this may not have had the chance to happen if you'd been a little more aggressive. For example...

Did you submit a signed offer for $342K before leaving last night? I'm suspecting not. That would have made it a lot harder to "forget" or "ignore" you. ;)

And if $350K would have secured it for sure, why stop bidding at a point that's relatively close by? We're talking less than 2.5% short of reserve... weren't you at all tempted to bid higher to have the security of knowing that it's yours? Especially if you were down to $500 increments, I'd have been tempted to offer, say, $346K, as an attempted "knock out" bid.
 
I have a different theory - the other buyer was the agents new girlfriend. Therefore he sold it to her cheaper so his partner didn't get quite as much out of the deal. ( you did say breakup didn't you ?)

Synical - uh huh :D

( All tongue in cheek of course. I am sure there is something even better waiting for you ;) )
 
I hear what you're saying, and you're right, I had misunderstood. It's disappointing, but my point is that perhaps this may not have had the chance to happen if you'd been a little more aggressive. For example...

Did you submit a signed offer for $342K before leaving last night? I'm suspecting not. That would have made it a lot harder to "forget" or "ignore" you. ;)

And if $350K would have secured it for sure, why stop bidding at a point that's relatively close by? We're talking less than 2.5% short of reserve... weren't you at all tempted to bid higher to have the security of knowing that it's yours? Especially if you were down to $500 increments, I'd have been tempted to offer, say, $346K, as an attempted "knock out" bid.
Perp, my final offer would have been $345K as I had intended not to go further than that. When my offer of $342K was not accepted(I was ready to sign that very night) I was asked to wait till morning. There was no question of written offer (probably u r right I should hav done that just to make him remember who the highest bidder was).
Anyway his partner actually missed on the highest bid as I had kept 3K as the buffer for next morning negotiations when he was meant to call me.

But as a courtesy i thought he should have called me and given me a chance to better that offer. But in reality he accepted a lower offer.
So now I even doubt whether he presented my $342K offer to the vendor.

But as i said it was my first auction and am not that experienced negoatiator so i guess i'll pick up the broken pieces and move on....I've had my share of moan :)

Thanks for your feedback though. It's certainly some food for thought.
 
I have a different theory - the other buyer was the agents new girlfriend. Therefore he sold it to her cheaper so his partner didn't get quite as much out of the deal. ( you did say breakup didn't you ?)

Synical - uh huh :D

( All tongue in cheek of course. I am sure there is something even better waiting for you ;) )
Maybe ? Maybe not..... I'm new to this ball game.

As Propertunity says I might get a better deal but might have to wait till next year as missus and I are expecting our second bub in Nov. She'll be on maternity leave for 9 to 12 months. So i guess PI might have to wait till then.... or maybe something happens before she goes on leave......fingers crossed. :)
 
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