Guys we are starting to look into an investment property however we are not serious at buying as yet. I was curious how auctions are being played out today as I havent been to one for 5 years. So we headed off to some auctions in northcote on the weekend. We accidently came across an open house and auction and thought we would see the outcome. This was a single front home. There were proably a dozen people there at most. The auctioneer opened up the bidding (it was 370+). No one was bidding. Finally some guy bidded 370. Then there were no bids so the vendor counter bidded the 370. Then the same guy bidded low 380’s. Thats where it stayed and the vendor went back to discuss the result. Came back and said the property wont sell at that price and the vendor counterbidded it again. Finally the same guy bidded one more time before the property was passed in. Am I stupid or is this crazy? One guy counterbidding bids that arent even real! I found this rather funny and absolutely ridiculous. Just didnt make sense to me. Thought Id share it.
Cheers stifla.Do you think maybe that guy was a dummy bidder. Did you look in the Sunday papers to see what it was passed in at? Did you see the guy walk in and make a later offer?
stifla – the exact same thing happened at an auction i attended in northcote 6 months ago. infact this auction was on hot auctions about 1 month ago. i dont know if you remember the RENO sisters.
anyway the guy that bought it was the only bidder and he countered 4 times against vendor bids. the house was still past in at 500k and then we find out he bought it for 515k. unbelievable – and it still holds as a record for a single fronted 3 bedroom in the area.
how much did i wanna go and call him a goose!!!!
I saw the guy walk up to him but thats all I remember. Its not on domain.com.au as yet and i didnt get the chance to check the papers. But it just dazzled me. The market should be based on what the people think a place is worth not what the vendor wants to jack the price up to. If no one else bids then so be it.
In aussierogue’s example the guy (the market in this case) was obviously prepared to pay $515k. He was simply more prepared to pay a higher figure than anyone else (rightly or wrongly).
At the end of the day, if the vendor ups the anti, you can simply say “no more”. It’s just like competing against another bidder. Once you reach your limit, there’s no more bidding to be done.
What the vendors are doing in these examples is seeing whether your current bid is your maximum or not – it’s a bit of a bluffing game bewteen you saying “I’ve got no more to give” and the Vendor saying “I won’t let it go at this price”.
Regards,
Clintclint – are you an agent??
if the vendor up the anti off course you can say no more…where in the rule book says you cant?? its not like yr competing against another bidder – youre competing against the seller…
you could use this same arguement for dummy bidding. ie its just to find out your maximum bid…
only bid against real bids from other potential buyer IMHO.
property didn’t meet the reserve so it doesn’t really matter if it was dummy or vendor bids – it wasn’t on the market was it?
maybe the bidder was just hoping to pick up a bargain in the event the vendor was silly enough to ‘put it on the market’ and see if other potential bidders would step in…as seen on tv already.
cheers
brahms
Mortgage Broker
[email protected]brahms no im not – but thanks for asking. so you would keep bidding against a vendor bid??
why didnt he put in one bid against the vendor bid and then secure the right to negotiate if the property was passed in – because there waqs no one else bidding!!!. why keep bidding against the vendor when you have already secured the right. all this has done is made it look like the house was passed in at 500 when infact it should have been passed in at 450.
this guy would have had alot more amo going in to negotiate at 450 rather than 500 in order to secure a good price for the property.
sure he paid what he thought the house was worth so good on him – but why pay more than what you have too??
There seems to me to be a fundamental difference between a disclosed vendor bid and dummy bidding. In the first instance the vendor is saying your bid is too low and you know it is the vendor, it’s just a different way of negotiating and more honest than the chestnut some agents use in private negotiations ie someone else is interested.
In the case of dummy bidding the vendor is attempting to deceive the public by thinking there is additional genuine interest than there is.
If the vendor wants to auction and have the right to disclosed vendor bids that’s fine. It’s also more honest than the situation I have seen where a dummy bidder bids and the property is passed in on the dummy bid and the vendor’s agent then puts in the paper that the property was passed in at $x. At least now if you’ve been to the auction you can see it was passed in on a vendor bid.Hi aussierogue – no, I’m not an agent.
You may have got the wrong idea from my post. I’m not advocating vendor or dummy bids, just acknowledging that they exist and that whether it’s the vendor you are bidding against or someone else, the principals are similar, ie have a top price, and bluff as well as you can [biggrin]
I work in the building industry and deal a lot with negotiations between various parties to contracts etc. so I see many tricks come out of the woodwork.
Buying a property in anything other than a completely open manner (which is very rare) can require a bit of a poker face at times
BTW, before anyone re-opens that recently locked thread, I am not trying to screw anyone or advocating same [wink4]
I certainly wouldn’t keep bidding if I knew the vendor was the only bidder left. At that point you meet and see if you can agree a price as you would in a private sale.
My thoughts only. I’m sure others have many (even better!) ideas.
Regards,
ClintCLINT
How about sharing some of the ” tricks” that you have seen in the building industry inthe nego process- it will also make us aware. Thanks in anticipation
PiperIt is illogical to bid against the vendor.
You are giving away information (for free).
The first rule of poker is to not play!
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