chris the property man

Interesting. I've been away for over six years so I have lost touch with it. Thanks for the update.

chris the property man

Once you understand how they work, there's nothing to be scared off.

The main thing is to set an upper limit and stick to it..don't get carried away and end up overpaying.

When you are ready to go to one, PM me and I will try to give you a few tips. A good idea is to go to a number of auctions from various agencies and see them in action. Anyone can go - it is a 'public' auction. Once you have been to 4 or 5 you will start to see a pattern of what is happening and start to see how things are working. They are actually good fun when you are just there as a n onlooker. Obviously, a different story when you are there to bid. But as long as you understand the process, have done your checks and set your limit, there is really no need to stress too much.

Synky

Chris you are a credit to your profession

MrsFychan

sorry being really stupid here but is a "vendors bid" the seller bidding on their own property?

Synky

It seems to be, which they can do up to the reserve price. Which begs the question, why it just start at the reserve since it is a bit of a lie up to that point.

chris the property man

Much apprciated.

Snap Shot

BTW don't fall for any nonsense about, 'everyone buys houses at auction these days, it's the way it's done in Auckland'. SIL tried to tell us that and ended up buying her house in the normal manner.

chris the property man

Not quite...it is actually when the auctioneer places a bid on behalf of the vendor. The reason he does this is to keep the whole thing moving. If the bidding stops well below the reserve it does not necessarily mean that nobody wants to pay any more for the property. It can be just that bidders are being cagey or reluctant to show their hand - there's a lot of psychology in action at most auctions.

So, the auctioneer places a vendor bid, having announced it as such so that all bidders are aware (they now know that the reserve has not yet been met) and he sees if anybody wants to better it.

If somebody does then the bidding will often continue again, or maybe the auctioneer will submit another vendor bid.

If the bidding stops and no one betters the last vendor bid then the property is then either 'passed in' - the auction has ended or the auctioneer will go and seek instructions from the vendor. This could result in the reserve being lowered. If it is he can then restart the auction and will announce if and when the reserve has been met.

If it gets passed in the auction ends and the interested parties can the have the chance to negotiate with the vendor, via the auctioneer, in private. A lot of properties are sold this way - after the auction has ended. Offers can also now be accepted with conditions, unlike at the auction where all offers are unconditional, hence the real need to have done all your due dilligence and checks first.

It can be a bit confusing, especially with all of the jargon..pre auction offers, vendor bids, passed in, reserve etc, and that is why it is highly recommended that you go to several auctions as a bystander before ever going to one as a bidder.

I often accompany my customers looking to bid at an auction and give them tips and advice on what the process is, when to bid etc. This does require a good level of trust between them and me and that can only be earned by showing them that I am there to help them, not push them into overpaying or buying a property that they are not 100% sure about.

I hope that explains the term 'vendor bid' adequately for you, MrsFychan.

chris the property man

Fair point. Auckland and a few other main cities are mainly auction based - mainly due to the fact that the markets there are a sellers market and auctions will always benefit the seller more. You can still buy in "the normal way" in Auckland but the amount of properties advertised that way are very limited. Auctions are not everyone's cup of tea and I can see why, but it's the way it is at the moment.

I will be glad once things are on a more even keel as far as supply and demand goes and we have the full range of sale methods being used rather than 75% auction.

chris the property man

Good point. The thing is, if the reserve is common knowledge then who is going to pay much more for it than that?

The whole point of an auction with a reserve is to get the vendor the most that anybody is willing to pay for the property. Whether that is more than the reserve, the same or less only time will tell.

Whilst it is vendors paying real estate agents to sell their house by auction, they will always act in the best interest of that client. The buyers/bidders are not paying (directly, at any rate) for the services of a real estate agent. We are legally (and I am morally) bound to treat them honestly, with respect and with a duty of care, but it is the vendor that we act for. Vendor bids are there to aid the whole auction process run and do benefit the vendor in that way. But an auction that ends prematurely is no good to anyone, including a potential buyer.

If I accompany a buyer to an auction then I am there working purely for them - it is the listing agent working for the vendor. As such, this evens things up a bit as far as having a professional working for you in your corner.

Robbie2010

Yes! Its market manipulation!

http://www.google.co.nz/url?sa=t&rct...0adGIM5XoxIK_Q

Bo-Jangles

How long have you been here? I have been here for a good seven years and in my experience it has been no different in all that time - it's certainly not a quirk of the current market conditions. For some reason Kiwi sellers just prefer auctions in the hope that they can squeeze a few more dollars out of the place.

Like many posters here, we simply won't bother to view anything that does not have a price on it and in talking to various people over the years we're far from alone in this. I think ultimately old skool Kiwis are total suckers when it comes to money and financial matters and always like to drive a hard bargain for an extra dollar. Reality being that they're likely being ripped off in the first place with inflated prices, but if they 'think' they saved or made an extra dollar then all is good in the world.

Why else would Farmers have a 50% off sale every week?

Bo-Jangles

There was something on TV recently about auctioneers taking bids 'off the wall' i.e. some ficticious person standing behind you. Advice was to stand at the back of the crowd so that you can at least have half a chance to see where those bids are coming from.

Jan n Neil

I really have to hand it to you for sticking around but i,m sorry brother you just wont convince me. I have bought and sold a few over the years and i,m yet to meet an agent who isn,t reading of a script and telling me exactly what i want to hear. We work hard we do live in a very expensive house but why should i be penalised by some grabbing git who wants a percentage of all my and my wifes hard graft especially as houses are selling themselves round here at the mo

It,s not an honest and transparent process, we where 10 grand of the asking price on a 800 K property when we first got here 3 years ago and the agent told us the offer was insulting, when i bought the house across the road she caved in like a sack of shit promising me all kinds of money of the first one and she was telling me all kinds of ways i could get out of my unconditional offer that i had signed on the new place

You might be different, the ones i have met/dealt with are slimey little toads

just my opinion

neil

chris the property man

With that experience, I can see why you are not a fan of real estate agents. She sounds like the type that gets the industry its bad name.

I'm not going to try to convince you otherwise, you are obviously a man of principles and of strong convictions. Similar to myself.

Cheers.