I went to an auction 2 weeks ago. Agent said price guide over 1mil, you should have it for well under 1.1mil. Vendors reluctantly sold for under their reserve at a little over 1.21mil. Most of the bidders got pest and building done yet the majority were never in the running at the real reserve.
Underquoting and jaded buyers
- Thread starter Jacque
- Start date
pet hate............
I have conditioned most of my pre approved buyers to this sort of immoral rubbish.
ta
rolf
How did you know the vendors reserve?
Underquoting + dodgy auction can be recipe for disaster for purchaser.
I went to an auction few months ago in western Sydney. Agent listed/marketed property $450K+ and had about 8-10 registered bidder.
So here is what happened.
Auctioneer started bidding from $500K
Bidder A placed a bid for $525K
Bidder B placed a bid for $530K
Bidder A, $540K
Bidder B, $541K
Bidder A, $545K
Auctioneer waited for Bidder B to place a bid,
Then announced that they will seek instruction from vendor and comes back after couple of minutes,
informs crowd that Property will be PI if they cant get any further bid
Bidder A bids $550k
Auctioneer waited for Bidder B to place a bid again,
Bidder B smelt the rats and told agent that he is not going to bid anymore as he doesn't think Bidder A is genuine bidder.
Auctioneer/agent talks to vendor and property was passed in.
In normal case, Bidder A will discuss or show interest to try and negotiate with vendor/agent to secure the property that he was really really interested.
nahh...no way.... as soon as property passed in, Bidder A didn't wait and quickly left property.
I thought Auction was rigged and Bidder A was installed for shell bidding.
Most investors know rough price guide before they attend auction, but first home buyers and Owner occupied buyers get stung by such practice and loose lot of money.
I went to an auction few months ago in western Sydney. Agent listed/marketed property $450K+ and had about 8-10 registered bidder.
So here is what happened.
Auctioneer started bidding from $500K
Bidder A placed a bid for $525K
Bidder B placed a bid for $530K
Bidder A, $540K
Bidder B, $541K
Bidder A, $545K
Auctioneer waited for Bidder B to place a bid,
Then announced that they will seek instruction from vendor and comes back after couple of minutes,
informs crowd that Property will be PI if they cant get any further bid
Bidder A bids $550k
Auctioneer waited for Bidder B to place a bid again,
Bidder B smelt the rats and told agent that he is not going to bid anymore as he doesn't think Bidder A is genuine bidder.
Auctioneer/agent talks to vendor and property was passed in.
In normal case, Bidder A will discuss or show interest to try and negotiate with vendor/agent to secure the property that he was really really interested.
nahh...no way.... as soon as property passed in, Bidder A didn't wait and quickly left property.
I thought Auction was rigged and Bidder A was installed for shell bidding.
Most investors know rough price guide before they attend auction, but first home buyers and Owner occupied buyers get stung by such practice and loose lot of money.
I wonder if the agent burst a foofer valve sprinting after Bidder B as he/she headed for their car to leave after the auction?
Been reading this thread with interest... and got slightly bitten by the auction bug recently.
Saw a unit that was advertised for auction but the agent said the vendor would consider offers beforehand. Within my price range, somewhat decent condition. So I requested a building inspection and went to view the place a second time. This time agent said the basic interest was at the higher end of the listed range, and the vendor would go for auction unless a really good offer was submitted.
I think that is code for 'add $50k on top'
Saw a unit that was advertised for auction but the agent said the vendor would consider offers beforehand. Within my price range, somewhat decent condition. So I requested a building inspection and went to view the place a second time. This time agent said the basic interest was at the higher end of the listed range, and the vendor would go for auction unless a really good offer was submitted.
I think that is code for 'add $50k on top'
We had the kids with us and kept them occupied in the room next to the vendors and with every new bid the agent would run into their room and we kept hearing them saying they weren't at reserve and wouldn't be selling at that price.
And it continues.....
Three recent examples:
1. Agent told me and my client $950K+ sold for $1.32m
2. Agent told everyone $750K+ and sold for $1.011m
3. Agent disclosed guide of "around $1.5m" + sold for $1.8m
I like EPS's idea of publishing reserve one week out- no strategy is perfect but this one at least provides some transparency with time to spare..
http://www.change.org/petitions/the...s-to-stamp-out-underquoting-and-dummy-bidding
Three recent examples:
1. Agent told me and my client $950K+ sold for $1.32m
2. Agent told everyone $750K+ and sold for $1.011m
3. Agent disclosed guide of "around $1.5m" + sold for $1.8m
I like EPS's idea of publishing reserve one week out- no strategy is perfect but this one at least provides some transparency with time to spare..
http://www.change.org/petitions/the...s-to-stamp-out-underquoting-and-dummy-bidding
.....and some more.
Agent quoted "over $800K, maybe as much as $850K". We purchased for $963K at auction with strong competition (but we were expecting $950K minimum anyway)
1brm Inner West unit advertised as "Price Guide over $380K", sold for $461K (not to us)
Agent quoted "over $800K, maybe as much as $850K". We purchased for $963K at auction with strong competition (but we were expecting $950K minimum anyway)
1brm Inner West unit advertised as "Price Guide over $380K", sold for $461K (not to us
)Jacque, I assume the $1.011 was Glanmire Rd? The 'recommended price' was very under quoted when 48 Glanmire, being a terrible triangle corner block, sold for $850K a few weeks ago.
The agent called us this morning chest thumping, and trying to entice us to sell. If someone wants to pay such a ridiculous sum, who am i to stand in the way.
The agent called us this morning chest thumping, and trying to entice us to sell. If someone wants to pay such a ridiculous sum, who am i to stand in the way.
Sorry BayView don't agree. The vendor should have the opportunity to sell by any means that they choose. If it is by auction, so be it. What might make it fairer is the vendor disclosing the "Reserve" 3 days prior to auction. That way if it reaches reserve or exceeds it they win. In this situation the people who really want the property (and can afford it) will win out. A win, win situation.
I refuse to buy at auction. It's not because I'm scared of overbidding or anything but rather because I don't think it's fair on those people who don't have a clear strategy and plenty of experience.
I actually quite prefer auction, as you can see what other buyers are interested and how much they are bidding.
Private sale you blind to what other interest is there.
Both have their own positive and negatives.
The simple solution is to SELL at auction: no passing in, property gets sold to highest bidder. If the vendor wants to set a reserve then that price should be published before the auction, and before potential buyers spend their money on b&p reports.
So a campaign could be 2 or 3 weeks of "pre-auction" open houses, at which time the vendor gets an idea of the market value, then another 2 or 3 weeks under "auction" conditions, at which point the reserve is locked-in and announced, and interested parties can choose to spend money on b&p reports safe in the knowledge that they are only bidding against other buyers and not the vendor's unreasonable expectations.
This seems way too logical for the Property Market.
I agree that Vendors expectations at times are too high. This may be a result of emotional attachment, especially, if property is their PPOR.
lets see what this sells at
http://www.domain.com.au/property/for-sale/apartment-unit-flat/nsw/bexley/?adid=2011290535&sp=2
my guess starts with a 6
ta
rolf
http://www.domain.com.au/property/for-sale/apartment-unit-flat/nsw/bexley/?adid=2011290535&sp=2
my guess starts with a 6
ta
rolf
A while ago there was an extremely bad condition workers cottage in the valley for sale next to a train line with marks in the hallway from where the previous owner had died and sat there for a while, termite damage in the house, toilet in the backyard with a dirt floor, etc... So a lovely place.
A larger fully renovated workers cottage in a better position on the same street was currently on the market for $580k at the time.
The realestate agent advertised the house for auction and was telling everyone to expect it to go for $400k or less. So I was interested in the potential.
Got a call the night before the auction from the realestate agent saying the owners just accepted $600k for the property "against" his "recommendations" as he felt the property would go for above $600k at auction...
So he tells the owners to expect more than $600k and he tells the potential buyers to expect less than $400k... so a 33% difference in price.
That was annoying. At least the auction was cancelled so I didn't waste yet another trip out to the house.
A larger fully renovated workers cottage in a better position on the same street was currently on the market for $580k at the time.
The realestate agent advertised the house for auction and was telling everyone to expect it to go for $400k or less. So I was interested in the potential.
Got a call the night before the auction from the realestate agent saying the owners just accepted $600k for the property "against" his "recommendations" as he felt the property would go for above $600k at auction...
So he tells the owners to expect more than $600k and he tells the potential buyers to expect less than $400k... so a 33% difference in price.
That was annoying. At least the auction was cancelled so I didn't waste yet another trip out to the house.
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