trabonita Posted January 15, 2014 Share Posted January 15, 2014 Hi, Anyone bought a house at auction? I was wondering if the guide price they give is usually around what the house is sold for? Thanks Link to comment Share on other sites More sharing options...
Xenon4017 Posted January 15, 2014 Share Posted January 15, 2014 Hi, Anyone bought a house at auction? I was wondering if the guide price they give is usually around what the house is sold for? Thanks I think the answer is "almost never". But it can work both ways. When you're starting a RE thread you really need to give an indication where you're looking. Sydney defies gravity, Gold Coast is observing Newtonian physics. There are several reasons why someone goes to auction. It could be a deceased estate and they just want rid. It could be a hot market and the agent thinks an auction would generate a lot of competing interest in buyers. It could be that the house has problems that might not be picked up in a hurried appraisal. And it can be that the agent doesn't really expect to sell on the day, but to be able to go back to the owner with a better indication of what price would be attainable and hopefully the phone numbers of those willing to pay. There are sqillions of threads about how agents (esp in VIC, NSW) have underquoted just to pump up interest, only for the bidders to be miffed that the end price was much higher. The (generally young Gen Y) buyers get really ratty that they weren't able to pick up a bargain. On the other hand, auction clearance rates in QLD in 2010-2012 were on the floor. You'd be lucky to get one bidder to turn up; embarrassing. Personally, I'd stay away from auctions unless the house is really special. Go along for entertainment and to get wise about the REA sharp practices, but keep your hands in your pockets. Link to comment Share on other sites More sharing options...
TheEscapePlan Posted January 15, 2014 Share Posted January 15, 2014 Not in Sydney - there you should add another $100k+. A friend of mine just bought a house with a guide price of $700k but it sold at $870k, apparently that is normal. Link to comment Share on other sites More sharing options...
northshorepom Posted January 15, 2014 Share Posted January 15, 2014 Almost everything in the more expensive parts of Sydney goes to auction, or someone buys it during the auction campaign. Everyone says to add 10-20% in current market to the guide price (depending how the REA has priced it) which seems to match up with my observations. We looked at a house that was "guide over $900K" in December and would have gone to $1.05m for it. But it went for $1.125m......another one we looked at that was "guide $950K" we almost bid on but didn't, we probably would have gone to the same sort of money ($1.05m). That went for $1.03m, so we could have had it I guess. But have now upped our price point anyway, or perhaps lowered our expectations?? Ain't no bargains on the Sydney property market at present! Link to comment Share on other sites More sharing options...
Guest Posted January 16, 2014 Share Posted January 16, 2014 Auctions are pretty uncommon here (Brisbane) which is good as we bought at auction (was deceased estate) and got it for less than other stuff on the market was going for. Only had 1 other bidder at the auction. Totally different in Sydney/ Melbourne Link to comment Share on other sites More sharing options...
wolvesaussie Posted January 16, 2014 Share Posted January 16, 2014 I think its the opposite in Melbourne, virtually everything sells at Auction if you see one FOR SALE, you think, hmmm wonder whats wrong with that . I would hate to buy at Auction, really dont like it.... under quoting of guide price is often in the papers as a problem, they under quote in a hope of drawing a bigger crowd and hope people will pay more than they wanted. Good thing about Auction as I think it gets rid of those silly uk chains... you commit to buy on the day and thats it, no finance falling through, no survey finding a problem, no changing your mind.... Link to comment Share on other sites More sharing options...
northshorepom Posted January 16, 2014 Share Posted January 16, 2014 Good thing about Auction as I think it gets rid of those silly uk chains... you commit to buy on the day and thats it, no finance falling through, no survey finding a problem, no changing your mind.... That's not got very much to do with the means of setting the price though. It is more to do with the way conveyancing contracts are written here, whether you sell by auction or not Link to comment Share on other sites More sharing options...
Guest Posted January 16, 2014 Share Posted January 16, 2014 Also no messing around negotiating with agents, your competition is right there in front of you. Link to comment Share on other sites More sharing options...
northshorepom Posted January 16, 2014 Share Posted January 16, 2014 True. It's the theatre I can't stand though, the way agents try and whip it up (like by pretending to go and "get instructions from the vendors" as if reserve hasn't been reached, to try and make people think they're getting a bargain.....or by the planted "first bidder" ruse.....or, well, pretty much their whole demeanour really) Link to comment Share on other sites More sharing options...
Xenon4017 Posted January 16, 2014 Share Posted January 16, 2014 True. It's the theatre I can't stand though, the way agents try and whip it up (like by pretending to go and "get instructions from the vendors" as if reserve hasn't been reached, to try and make people think they're getting a bargain.....or by the planted "first bidder" ruse.....or, well, pretty much their whole demeanour really) Well, they do have a reputation to keep, and it is just like you say, an act that everyone expects. You wouldn't go to a kids magic show and reveal what's behind the curtain, would you? If you buy some white goods from the Good Guys, and hear the old line "I'll just have a word with the manager for a discount", you surely don't follow them into the back, watch them silently take a slug of tea then come out all smiles, do you? There's lots of hypocracy and deceit in the world. At least REA are brazen enough to put it on display. Link to comment Share on other sites More sharing options...
Paul1Perth Posted January 16, 2014 Share Posted January 16, 2014 Luckily the auction thing has never really taken off in Perth, except for a few of the really expensive suburbs. I watch the location, location show a bit and it amazes me that people can be so dumb to get in a sort of feeding frenzy on price sometimes. Then, when some poor sucker has paid $100,000+ too much, everyone claps as if he has got a bargain (unless they are clapping thinking thank god I dropped out when I did). I would hate an auction. Link to comment Share on other sites More sharing options...
Guest Posted January 16, 2014 Share Posted January 16, 2014 Yeah never got the clapping thing when you've just paid a fortune above the so called asking price. Saying that had a nosey at an auction a couple of weeks ago with no bids. Great seeing the auctioneer carry on and on and still no bids. Link to comment Share on other sites More sharing options...
Xenon4017 Posted January 16, 2014 Share Posted January 16, 2014 Yeah never got the clapping thing when you've just paid a fortune above the so called asking price. Saying that had a nosey at an auction a couple of weeks ago with no bids. Great seeing the auctioneer carry on and on and still no bids. Exactly, it's like watching the worst karaoke to the long version of Stairway to Heaven. And then he goes back inside to try to get the vendor to bend a bit. Auctions for houses are really quite a high pressure environment. I guess REAs like them because traditionally they've tended to shake out a sale. It might have been one thing when you're talking 20k for a shack on a block of weeds, but laying out a million bucks with limited access for inspections is a real gamble. Having said that, from talking to people who've built their own home, that route isn't completely without its' problems either. Does anyone know of a house build that was completed within budget? Link to comment Share on other sites More sharing options...
trabonita Posted January 16, 2014 Author Share Posted January 16, 2014 Thanks for the replies. It was a house on the Central Coast NSW I had spotted on realestate.com. So if the guide price is $450,000 what price does the auctioneer usually start from? I did wonder why it was up for auction, looked like a really nice house in good condition, just wondered if auction was a way of picking up a good deal but it appears probably not! Link to comment Share on other sites More sharing options...
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