Wol

My golfing partner today had a phone call from his daughter in Adelaide: she had just bought the house she was angling for.

Don't quote me on the figures, but at auction there were three bidders: the daughter dropped out and the hammer went down at $1.9m to someone else.

Half an hour later, the auctioneer came up and said that because of a "domestic" the winners were no longer buying: she then got the house for $1.8m.

This seems to me to be a straightforward scam: at auction (unless SA is even more different that I thought) once the hammer goes down you are legally obligated to buy at the hammer price. To my mind, there was a ringer driving up the bids and, due to a miscalculation ended up with the winning bid.

Difficult to prove, but surely the auctioneer - whether implicated or not - was committing an offence?

Any other explanation?

moneypenny20

Is $1.8m a good price or was the 'winner' the one pushing the price up? Up here it's the as Vic, you prove funds, register as a bidder, the hammer goes down and you're locked in subject to whatever contracts agreed.

Wol

That's what is universally the case. I wonder if the "true" price if there is such a thing - should have been say $1.5m if two "genuine" bidders had been playing.

I've been to enough auctions in Australia to be sickened by the games they play, and this seems to be one of them.

Tramps_mate

She should tell them where to stick it.

irishbloo

How did they come up with the $1.8.Was that her last bid.

Wol

I don't know - I was just chatting to her father after he'd spoken to her on the phone, and just got the gist of the story.

If the facts are as I understood, it stinks.

Kim67

Same thing happened to us in Brisbane years ago. We were the second last bidders and could tell that the last bidder was a dummy to push us up one more bid. We dropped out. Got a phone call the next day to say it had all fallen through and we could come in and sign a contract. My husband told them we were not longer interested and they lost our sale. She should do the same.

Kiwikaye

At the risk of getting myself into trouble, here, I used to work in real estate in Victoria. Back then having dummy bidders was legal, if not strictly ethical. Its not now, end of story. Even after I stopped working for them, I did some weekend dummy bidding for my old boss, on very strict terms. That stopped when the laws changed. TBH I would be surprised if any agent these days thought they could get away with that obvious a con, but it sounds like they tried. I think, from the info you've given and obviously without having all the facts, that your interpretation is probably right - the "dummy" pushed the price too far - and got into a mess.

Whether your friend's daughter buys the house is obviously up to her and whether she thinks its a good price to pay. Personally, I don't like endorsing that kind of behaviour. (And I realise that may sound a little hypocritical, but there you are).

Hope she finds another lovely house

Jan n Neil

Happens over here as well we where only 10K of the asking price of the first one we wanted to buy 3 years ago and as we where fresh of the boat and Poms and the sellers and our estate agent where mates they wouldn,t budge

I bought the section across the road instead and the agents caved in like a sack of shite bending over backwards on the first property, I told them to get stuffed

lapin_windstar

Maybe the seller decided to let them off.

Wol

Hey look: pigs flying across the sky

irishbloo

What, turn down $1.9 for $1.8.I don't think so.

lapin_windstar

If they won't pay, you'll have to sue them. It's contract law, not criminal law (correct me if I'm wrong). Maybe they just didn't want to spend the next two years litigating against people that might not have any cash anyway. Maybe the agent cajoled them into it so s/he could get the commission now instead of next century. Maybe they needed the money to complete on their next purchase immediately.

In any case, even if they did decide to sue, the seller also has a duty to mitigate their losses eg by selling for $1.8 and suing for the "lost" $100,000 rather than refusing to sell to anyone and trying to claw back the whole lot.

I'm just saying there are other possible explanations apart from the auctioneer being bent. Which is correct, I have no idea.

Wol

My money's on "bent". Just on the statistics of bent 'uns.

asprilla

Surely everyone knows (or should know) that auctions are really just a bit of a legalised scam to try and force a sale.

If you can create a situation where the seller is slightly more likely to sell at a lower price, and the buyer is slightly more likely to pay more $$$ than he/she really wants to.... well, it all adds up to a higher probability of a favourable result for your friendly real estate agent.

Have a read through this.

http://www.lawyersconveyancing.com.au/auctions.asp#1