floss

Has anyone in Melbourne bought their house at an auction, or at least been to a property auction?

I am trying to get a feel for whether the prices they advertise bear any resemblance to the price the houses actually sell for.... I guess it will vary with the area, but a friend who went back from the UK said that at the auctions she went to bidding often started much higher than even the top of the advertised guide price. Is this common - or are real estate agents more scrupulous than here

So, how do you gauge the real market, other than sitting in on lots of auctions getting very depressed at what you can't afford..... There seem to be more houses going through normal selling agents (?) than when I first started looking, but still too many being auctioned to be scared off!

Thanks

Storini

This is a good question (which I'd also like to see answered). In the past, agents quoted estimated prices at auction. However, these figures were often low to induce people to take an interest. So, those potential buyers spent real $$$ on mortgage applications, surveyors fees etc, in the expectation that they stood a chance of getting the property. What happened then was the property went for well over the estimate (which in fact the agent and seller expected) and all the disappointed buyers had blown all the surveyors' fees etc.

So, I believe some laws were introduced obliging the agents to quote accurate expected prices (if they quoted any price). What seems to have happened is the agents now won't quote _any_ price in writing or on the web etc. They may give a (deniable) verbal opinion.

Properties in the same street may range from $400k- $4M so it's not easy to get a handle on what's going to happen in any particular case.

Opinions very welcome!

NickyC

I've bought and sold at auction here in Sydney.

You are 100% correct in describing agent's estimates of the houses value. They would bump it up for the sellers and drop it down for the buyers (to suck them in). The rules that were recently brought in were supposed to stop all that nonsense but haven't really had an effect.

The only way to get a realistic idea of a house's value is to do your own homework. You have to go to open houses, check them out and then follow up on what they actually sold for at auction. Auction results are always available online or in the press and the agents are only too keen to publicise them. We regularly get letter box drops detailing the prices sold in our area.

It doesn't take long to get an idea of what the house will go for. As long as there's enough activity on similar properties - only takes a few weeks.

floss

I'm sure this is right - makes it difficult to judge from my computer here in UK though!

Amy thoughts from Melbourne?

fraser

I think you'll find the more central you look the moer auctions we've been looking at outer suburbs and there aren't that many. We spoke to an estate agent and he said the price is the same as here and you make an offer although most will get their asking price

floss

Morning Fraser - hope things are still going smoothly with the move...

re: house asking prices.... what happens when it says $xxx+ or even $xxx-$xxx.... if you make an offer is it blind like in Scotland, or like here where you can just keep going..... I know I'm jumping the gun a bit as I'm still here & recent events might make the move a little trickier, but it's good to dream...

fraser

I'm not quite sure, I think plus probably means auction and the other one probably privete bids, but I'm just guessing. Rachel actually phoned an estae agent who's number was on one of the houses on www.realestate.com.au and he was very freindly and said it was no problem to phone him whenever.


I'm sure if you phone one they'll be only too pleased to advise you

OzSheila

We were told that the situation in Melbourne (unlike Sydney and elsewhere) is that the realised price at auction is actually up to 10% more than the guide price. We have been watching the market for about 6 months and this does appear to be the case.

bondipom

Is there a vendor's bid in Vic as there is in NSW? Does Vic record the IDs of all bidders to prevent artificial bid inflation?

floss

THis is exactly the sort of thing I was thinking of - advertising an unrealistic guide price to get people interested, and then starting the bidding with a much higher price because of a vendor's bid! It seems a scary and stressful way to do it - to go through all the agro, heartache and expense of deciding that a particular house is for you and then lose it at the auction.... guess it tend to drive the bids up, just hope I have the nerve for it....

But as I hope to be looking in the outer areas of Melbuourne, hopefully there'll be more straight offers!

linnie2003

Floss
here are a couple of sites that might give you more info:
http://www.reiv.com.au - Victorian real estate institute (for prices in Melbourne & info on suburbs & regulations)
http://www.jenman.com.au/BS_Auctions.php#Auction2 (for tips on how to buy at auction)
We've been to a couple of auctions recently and it strikes me that there is a fair amount of psychology involved...watched other bidders crumble at an auction recently as a smart looking businessman stepped out the shadows, & started to up his bids without hesitation! Felt sorry for the two young couples who had been stood there for the last half hour, putting in bids with $500 increments - don't think they ever stood a chance!!

floss

Brilliant sites, thanks... but my god, I thought house-buying in UK was stressful!!

OzTennis

BP

To the best of my knowledge there isn't bidder ID in Vic as there is in NSW and the law was changed a little while back so that there is only one vendor bid permitted. 'Dummy' bids are also now outlawed but they can be difficult to prove.

I would agree with the 10% above quoted figure as a very rough rule of thumb for Melbourne.

It is a common thing in business to make prices look lower than they end up being so why should houses be any different? e.g. air fares are quoted from £499 to Australia, you ring up and that is the fare to Perth, from the 16th to the 18th of one month, if you fly from London.

OzTennis

Pomster

we bought a year ago privately.

The house market boom has dropped and we look at auction results in something like Sunday's Herald Sun- most auctions are now either sold before /sold after/private sale. Auctions are really only booming in high demand (expensive) areas, or in a boom market.

Most sellers are happy to accept an offer before auction if the price is right- it also saves them the cost of an auctioneer!

We have bought and sold in Uk and here it is so much easier. We agreed settlement terms (ie when we wanted to move in!) asked for a survey to be part of the agreement, paid deposit there and then (refundable if survey failed) and appointed a conveyancer.
Compared to UK process it was simple and caused far fewer grey hairs!!!

OzTennis

And you can't be 'gazumped' (unless come from Scotland where they have sensible laws)

OzTennis