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Buying Property at an auction

Buying Property at an auction

Old Jan 26th 2005, 3:04 pm
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Default Buying Property at an auction

I have noticed that quite a few houses are sold by auction on site... has anyone done this or been along watch?

Just wondered how it compares to the UK

Thanks
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Old Jan 26th 2005, 3:24 pm
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Default Re: Buying Property at an auction

Originally Posted by JJJHM
I have noticed that quite a few houses are sold by auction on site... has anyone done this or been along watch?

Just wondered how it compares to the UK

Thanks
The best way to see how an auction works in Australia is to watch Sky Channel 250 (Real Estate TV). Every day they show 2 Australian programs called Hot Auctions/Hot Property (they have 2 series) and Location, Location (not to be confused with the thrice named Ch 4 program). Hot Auctions is on every 3 hours each day (same program) and Location, Location likewise. HA is on at 6.00 am, 9.00 am, 12.00 noon etc and L,L is on 1 1/2 hrs later. It's fair to say both programs have a Sydney/Melbourne bias but Brissie features quite often on both. Enjoy and sorry if you don't have Sky digital satellite (check other cable and sat providers for Real Estate TV).

They also have a NZ program called Property Rescue. Now that NZ has been taken off this forum it is OK for me to say that NZ homes look a lot different from Aussie ones. I can just guess who might come in with how much different Aussie ones look to UK ones.

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Old Jan 26th 2005, 8:50 pm
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Default Re: Buying Property at an auction

They seem to show onsite auctions which seem to get a bit emotional. A lot of auctions are held in RSLs, hotels etc in room where only a couple of people turn up. They seem to turn into a negotiating session rather than an auction. The last clearance rate I saw ws %40. A lot of properties are sold prior to auction or just after auction. I will observe but not buy in an auction. Once you have bought you are committed. The biggest hassle is you have to do the searches and checks before you bid.

The agents love auctions and manipulate them. It is quicker and simpler to sell at auction rather wait for subject to blah blahs to come through or fall through. They are good for sellers in a rising market.

Observing an auction can help a buyer figure out what the vendor wants.

I won't bid at an auction.
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Old Jan 26th 2005, 10:17 pm
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Default Re: Buying Property at an auction

BP is correct. The clearance rate at auction is very low. There is new legislation to stop the auction scams but I am told that the fine is $24k and tha agents aren't caught that often so just build the fines in as an operating expense!

You still find dummy biding, agents purporting to be on the phone to outside bidders when they are just holding a dead phone, etc. And as BP says, if you are in the chair when the hammer falls, you are committed.

I have seen agents walking between one or two bidders, urging them to up their bids way beyond what they are obviously happy with - you can see the relief when the auction closes below the reserve!

Just because a place is to go to auction does not mean you can't negotiate a buy before or after. The property market is pretty dead at the moment and a sensible seller will accommodate you.
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Old Jan 27th 2005, 5:24 am
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Default Re: Buying Property at an auction

Originally Posted by JJJHM
I have noticed that quite a few houses are sold by auction on site... has anyone done this or been along watch?

Just wondered how it compares to the UK

Thanks
We have bought and sold at auction. As everyone says, Real Estate Agents love them and they are good (for sellers) in a rising market.

There have been times when the clearance rate has been up in the 80's- but not right now (not in Sydney anyway).

From a Sellers perspective, they're great if you have multiple, prospective buyers who all desperately want your property and have lots of money to spend. From a Buyers perspective, they are dreadful, stress-laden occasions.

As long as you have no vested interest, auctions can be great to watch and some are very exciting. I always check out any that are on in my area - just for the entertainment value (and the opportunity to sticky-beak!).
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Old Jan 27th 2005, 6:24 am
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Default Re: Buying Property at an auction

It's simple - set your price and make that your last bid.
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Old Jan 27th 2005, 11:36 am
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Default Re: Buying Property at an auction

Originally Posted by bondipom
They seem to show onsite auctions which seem to get a bit emotional. A lot of auctions are held in RSLs, hotels etc in room where only a couple of people turn up. They seem to turn into a negotiating session rather than an auction. The last clearance rate I saw ws %40. A lot of properties are sold prior to auction or just after auction. I will observe but not buy in an auction. Once you have bought you are committed. The biggest hassle is you have to do the searches and checks before you bid.

The agents love auctions and manipulate them. It is quicker and simpler to sell at auction rather wait for subject to blah blahs to come through or fall through. They are good for sellers in a rising market.

Observing an auction can help a buyer figure out what the vendor wants.

I won't bid at an auction.
Off site auctions seem to be a NSW phenomena, Victorian auctions are predominantly on-site. As Quins suggests use your head at an auction and don't be frightened to ask questions such as show me who just bid $x if it is against you (to try to flush out dummy bids). Auctions might be good for vendors in a rising market but auctions can be good for buyers in a sluggish market (i.e. now generally speaking). Desperate sellers are more likely to sell for below their reserve in such circumstances

If you wish to sell by auction, study the record of the local agents on domain.com.au or realestate.com.au to see who has the best record. If you don't trust estate agents/auctioneers, or yourself, then don't bother - but they are also involved in private sales, unless you do your own advertising, conveyancing etc.

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Last edited by OzTennis; Jan 27th 2005 at 11:44 am.
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Old Jan 27th 2005, 11:42 am
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Default Re: Buying Property at an auction

Originally Posted by Quinkana
It's simple - set your price and make that your last bid.
Should add, if there is another bid above your price, turn and walk away - you are out.
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Old Jan 27th 2005, 11:53 am
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Default Re: Buying Property at an auction

And wouldn't it be more exciting if property was sold by a descending price or 'Dutch auction'* system. The price starts extremely high, it comes down gradually on an electronic screen and the first person to buzz in gets the property.

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*Tulips were auctioned this way from the 17th Century
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Old Jan 27th 2005, 11:02 pm
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Default Re: Buying Property at an auction

Not many people know that!

I didn't, anyway. You learn something every day.......
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