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Any one experienced such auction

Discussion in 'Real Estate' started by russoz, 9th Apr, 2008.

  1. russoz

    russoz New Member

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    The auction was on 6 April in South-East Melbourne. Before the auction, agent told the interested parties that the couple vendor might not sign the contract as they are divorcing. But only the highest bidder had chance to negotiate with vendor after auction and on Monday. The auction was conducted as normal and said the property had the reserve as such. The result turned out as what the agent said previously. The property was passed in and the highest bidder went in to negotiate and came out in 15 minutes. Then the agent spoke to the interested parties outside that the reserve price wasn’t out yet. The highest bidder had priority to negotiate with vendors on Monday. Tuesday the agent rang that they still hadn’t got the reserve or one fixed asking price. The agent asked the interested parties to go to the office to give the best offer and the agent also said that the highest bidder is willing to add at least $10,000 more above the highest biding price of the auction $655,000 .

    My questions are:
    1. Is any regulation on this kind of auction as it doesn’t protect any buyer’s interest at all?
    2. Should I believe what the agent said that the highest bidder is till in the game and will add?
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Standard negotiating techniques I suspect.

    There is nothing wrong with passing in a property at auction and then negotiating afterwards with one or more of the highest bidders. At the end of the day - the agent is working for the seller, and it is their job to get the best price for the property.

    If anyone has been mislead or the property has been mis-represented, then their might be grounds for a complaint - but it does look like that to me on the surface.

    PS. the buyer has no "interest" in a property until a contract is signed.

    The question you have to ask yourself is - how much do you want the property?

    Is it a PPOR or an IP ?
    If a PPOR - is this "the one" ? (if so - you need to pay).
    If an IP - is this a fantastic deal ? (if not - just walk away).
     
  3. myarhidia

    myarhidia Member

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    The way I understand auctions (could be flawed) is that the highest bidder has the first right to negotiate, if the negotiation fails then it's open slather to all interested parties to submit their offers and negotiate, just like a normal sale.

    What SIM said:

    is a great piece of advise.
     
  4. russoz

    russoz New Member

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    Thanks very much for your prompt response.
     
  5. nitro-nige

    nitro-nige Well-Known Member

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    Sounds like another dodgey agent (aren't they all).
    Why would you auction a property if they vendor wasn't going to sell?
    It sounds like in the end the normal process applied as it got passed in.

    I agree with the other comments, if it's not a good deal walk away.
    They say the deal of a lifetime comes by every week!
     
  6. jamin

    jamin Member

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    i read in a book (i think it was real estate riches by robert kiyosaki and dolf de roos- one of his advisors)
    there is a rule. its the 100:10:3:1 rule.
    from memory it goes a little like this (correct me if im wrong) look at 100 properties, of those 100, 10 will need further looking into, of those 10 you put offers on the 3 best ones, of the 3 you will get one of them.

    has anyone ever heard of this? and i totally agree with nitro
    "the deal of a lifetime comes once a week".

    some people believe whatever they want to believe that will make them feel better about their lack of a good financial life.
    and then they see others succeeding they say "he/she was lucky. i never get that kind of luck."

    to quote another phrase from a book (from the title i've forgotten) "the harder you work the luckier you get." i would also like to add "the smarter you work the luckier you get."
     
  7. Leandro

    Leandro Well-Known Member

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    I have read that book, it was by dolf de roos. ;-)

    I think it might be?;

    view 100
    place 10 offers
    3 offers will get accepted
    choose 1

    But i guess it doesn't matter, you get the point, view lots and 1 will appear as the winner.
     
  8. tropic

    tropic Well-Known Member

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    But if 3 offers got accepted you are obliged to buy all of them? Is this another dodgey tactic?
     
  9. tailcat

    tailcat Well-Known Member

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    You make all three subject to finance.

    You then get the finance for the one you want and not for the others.....

    If the bank will finance all three then take them all!!! (The 100-10-3 rule is supposed to deliver 3 beneficial properties/deals.) I did this and ended up buying my first two properties on the same day. Both of them have done very well for me......

    Tailcat
     
  10. Leandro

    Leandro Well-Known Member

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    tailcat is right.

    I looked it up, the theory basically is; If you look at 100 properties, put offers in on 10, and try to arrange financing for 3, you may end up buying 1.
     
  11. Jacque

    Jacque Team InvestEd

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    This is a tactic suggested for those who don't know an area well, as viewing this many properties provides an excellent basis for garnering knowledge of local prices as well as specific data on a particular suburb/area/postcode.

    Making more than one offer is fine, and it's best to let each agent know that this is what you're doing, as it usually creates urgency on the part of the vendor, if they know that you're waiting for the first one (or two, three) to come to the party on price.