Oh how I hate auctions.

The reserve is lowest $ amount the seller will settle for, and the seller decides this amount. The seller need not even tell the auctioneer what that amount is until during the auction.

The real estate agent is in a catch 22 about telling prospective buyers what the expected sale price is, although if they set the sellers expectations correctly they they can generally give a pretty good price guide.

The auctioneer in this case may not have known what the seller wanted (aka reserve), which is why the price guide was so far out.

If the seller decides not to sell then the top bidder gets first right of negotiation.

Beersy said...

I was at a home auction today,
The price for Auction was listed as $600,000 to $660,000.
But At $700,000 we were told bidding had not reached the reserve.

Is there not a rule that says the high end price of an Auction should have to be the reserve?

And if not, Why not?

Why Quote a price at all if it's not going to be accepted?

yes absolute crap!! liars and cheats R E A,s

next time you go to an auction ,stand next to the auctioneer and watch the bidders . If there are any !!

700,000 for a house...?

puc me, I could have bought my house three times over for that amount and still have had enough for a not too old ferrari

there are houses and then there are houses I guess.

maybe its a priority thing

^^^ Mate you should try house prices in Sydney on for size!

In NSW you have to register before an auction, but I bet that doesn't stop the rorting of dummy bidders... the ones to watch out for are the folks still bidding at the end who don't have someone from the real estate in their ear.

One auctioneer (who was a kiter) once told me that the way to get the best result at an auction as a seller was:
- Work out your minimum sell price and stick to it
- Tell the real estate exactly what that number is
- At the start of the auction, the first bid should be your vendor bid at this amount, which allows the auctioneer to declare the property on the market
- Profit!!!!

I think he may have also said the way to get the best result at an auction as a buyer was make sure no-one else interested in buying turns up...

Beersy said...

I was at a home auction today,
The price for Auction was listed as $600,000 to $660,000.
But At $700,000 we were told bidding had not reached the reserve.

Is there not a rule that says the high end price of an Auction should have to be the reserve?

And if not, Why not?

Why Quote a price at all if it's not going to be accepted?

The agent is working for the seller...if the place is listed as you mentioned and the agent has managed to get the bids up to $100k over it, I'd be very happy for that agent to sell my house, plus it's another $2-3k in their commission, so why not? The agent would have an idea when the bidding slows & would advise the buyers to sell...otherwise he doesn't get paid.

Those figures show that the bubble isn't ready to burst yet!?

I think that's illegal in NSW. Dogy agents don't care if you fork out $600 for a building inspection only to find out it was never near he price. Shame on the agent, you can never trust them

GalahOnTheBay said...

^^^ Hmm I disagree.

It's the agent's job to know what my place should expect to sell for plus or minus.

If the agent sets the expectation low with the seller then they don't need to work as hard, then anything over that amount is win in the sellers mind.

Sounds to me like the agent lowballed the price guide to get more people to the auction, but was saying a completely different number to the seller. Either that or the seller was just being unreasonable in the first place...

True, or the property had a couple of keen buyers that were prepared to buy for more than it was worth & the owners got greedy...either way, it sounds dodgy (as the seller, I'd be happy to have bids that far above the advertised price & would be sayin "SELL-SELL!!!")

Slightly off-topic - unfortunately the 'Vendor's bid' has killed auctions (here in Vic), I've been to a few where the agent has thrown a bid equal to the reserve in at the start, followed by grumbles & silence...within 5mins, the agent is packing up & going home.

Prawnhead said...

I realise competition is intense in sydney and maybe sometimes that's the only way to get into the market ,but when someone outbids everybody else, and everyone applauds them on hot property, or whatever show it is ....... i can't be alone in thinking to myself
..Hello di*k head...!

Yes. The undeniable fact is, when your bid is declared the winning price it means everybody else at the auction thinks you paid too much for it.
If even one person thought it was worth more then they would have bid more.
I don't think they're a duckheed but I do wonder why they look so pleased with themselves.

^^^ Glad to see I'm not alone in this line of reasoning.

There is a big difference between value and price.

hotballs said...

what rot, its a way of congratulating people on their new purchase, which is a massive thing when its a house.
dont be so miserable

yeah sorry .. i didn't mean to give it a negative vibe....


that should of read "Congratulations" d%ckhead......... not "hello"........

cheers