Found this place on the net and after looking at a property to say it was in need of a lot of work (I figured $50000 – $55000) I gave this place a really good look over and doing plenty of ground work prior to the auction on pricing in the area etc etc plus data from RP Data. I felt I could make a reasonable estimate of price range to bid in.
Being my first house auction I was keen as mustard also keen to not be carried away in the excitement and hype during bidding.
After reading heaps and asking a few question on here I felt preaty good and confident to approach my first auction.
So off I went to the auction tonight and waited for the place to come up and finally it was up first bid $80000 below what I figured my bottom price would have been (i'm in with a chance) and bugger me it finished $40000 above my highest range. I never even put a bid in just watched as the battle raged and it arrived at my bottom range and shot past my top range.
I beleive it went well over price, at least the person next to me agreed as he was going to be bidding and my pricing was within $5000 of his so I felt my ground work put me in the right area.
Lesson I have learnt – stick to your price range and don't get talked up ot engage in the excitement, do your home work before hand, be prepared, READ the contract they HAVE there before you bid, if not happy with it WALK.
Anyway I feel I have won without winning that one at the price. Oh Hum now to start over.
Who else attends auctions or are they not really worth the effort?
Brian
Brian when i was starting out nearly twenty years ago I was looking at two properties in my home town, both of which were for sale by auction. i was buying the property with my twin brotehr, but i was the one who chose the property, went to the auctions etc. ( he was more of a silent partner) the two hosues sold for more than I was willing to pay. the RE approached me and offered his condolences on 'missing out'. i just told him to keep giving me properties to look at. After another three weeks he showed me a better property listed for sale, not auction. i put in an offer and it was accepted, i had a cheaper purchase price and a higher rental return.
i bought my first IP after getting divorced by auction where i was bidding over the phone as the property is about 700 klm away. i don;t mind auctions, however, as you ahve said, it is REALLY important not to get carried away and to KNOW that you will have been underquoted by the RE.
if you miss the 'opportunity of a lifetime' you can be sure there will be another one around the corner, up the street or in another suburb
cheers
Sonya
I am personally not a fan of auctions. It is not just that you can get carried away, but it is that other people get carried away and thus you cannot secure the property for the price you want.
I also like negotiating terms, and therefore auctions don’t work well for me.So I just ignore properties that go to auction. I am a focused investor so I can’t afford to waste my time at auctions
Ryan McLean | On Property
http://onproperty.com.au
Email MeInteresting you say that Ryan, I have been thinking about the auction and that point myself. However it was worthwhile to see what the market was doing in that area as there where some 10 or so properties up the same night, a number being past in was also interesting.
I took it as a learning curve and have been calling agents in a number of areas i'm interested in and few places have cropped up so will be investigating ASAP. Now I just got to do some area searches to see what is happening or about to happen.
I'm only new to this so still learning and every step is a learning curve. I have money burning a hole and I need to control the emotion and make an informed business decision.
Brian
Hi all.
I would like to say that despite the new legislation governing auctions (registering bidders and eliminating dummy bidders, etc) I see agents using them in the hope of creating bidding wars, rather than as a means of selling something to meet the market. It took me lots of wasted days and disappointments to wake up to this. It can be very frustrating to find that the owner/agent had a very definite selling price in mind, often higher than that mentioned, if a price was mentioned at all. I am sure there are the occasional good buys from genuine sales, but as the previous person said, it is not a time-effective method for most investors.
G
I too get immediately turned off when a property is for auction- though in retrospect there have been times when Ive found out later the property has sold for below what i have expected.
My partner attended a doozy the other day when an aquantaince was at a same auction- they went to bid for a particular property which they got top bid but couldnt contact owner and property was passed in- at the end of the night no properties had been sold – the agents congealed on this person- the only serious buyer for the evening and they ended up buying a property that they had never seen in a location about 150 k's north on a 4wd track from where they believed it to be! Needless to say they have been trying to get out of it since but to no avail. There was certainly two parties tangoing in this madness though for me a re afiirmation of not getting tangled up in auctions!
I have to say I'm not that confident to bid on a place i have not seen, maybe went I learn a lot more. Its a personal thing for me I want to see what I can do with the place first hand and find any issues that may cause costs to blow out and it also allows me to drive around the neighbourhood and see whats about.
May not be an efficient method, and is time consuming but I feel better. I do agree and feel the only auctions I will attend will be in my area to get a feel of the market.
In fact I've decided on five areas and will be going to an area later this week and have advised the realestate I will be there for a day and what I am looking for. If I find what I want I'll put an offer in.
Every step is a learning curve.
Brian
No, I never go to auctions any more. I just can't stand the hype and the antics of the real estate agents. It's the strutting around like peacocks thing.
I'm sure auctions have their place, and although never bid at one, I've been to a few just to get a feel of what it's like. The thing that gets me completely disillusioned with auctions are when a house with a reserve price of $1 mil sells for $1.8 mil, or an auction quoted at $550-600K is only 'on the market' at $700K.
In essence all this 'underquoting' is a pain to deal with. Imagine getting all the inspections done and then having a house sell for $100K above its reserve, which is itself already $100K above the top end of the quoted range. In some cases now I might even look at a house's quoted price and just add $100K on top of it if it's nice and in a fairly desirable suburb. If I can't even afford that then it isn't in my price range.
Hi everyone,
It seems we've all had the same painful experiences!! A few years ago I inspected a house being quoted at X, and KNEW by then, from lots of disappointing experiences, it would go for Y. (At one previous auction an agent watching even told me almost exactly what the house in question would fetch, which was an eye opener at the time.) Anyway, all these poor first home buyers were looking, including my son, all getting excited and arranging building inspections and days off work.. I was so sick of the tactics by then, that I rang the senior agent at this well known agency, and told him that personally I'd be remembering how they were treating people, that I'd be mentioning it to others and that I'd not be dealing with them when the boom times end and they are courting business. Bluster I know, but I felt better.
G
To put another spin on things…
I have been noticing a lot of for sale signs up on "cheaper" apartments around Bondi lately have been advertising auctions. I do the sticky beak thing and go for inspections, asking what the agent thinks the ball park figure will be etc.
Auction date still one month away and low and behold a large SOLD sticker goes up! I am almost positive that currently more apts are being sold PRIOR to auction!
Conspiracy???@ozimwassabi – Conspiracy…defiantely not. It is a well known fact in the real estate industry that a lot of people who put their property up for auction are actually hoping to sell before auction. A friend of mine recently did this on a block of land he owned. He put it up for auction but sold the property before the auction ever happened.
The lesson to learn is that you can make offers on places even before they go to auction.
Ryan McLean | On Property
http://onproperty.com.au
Email MeAuctions are defiantly worth effort, NBS!
I am going to stick up for auctions – I like them. I have bought and sold in QLD and VIC and they seem to work in VIC better than QLD.
Rule No1 – EVERY realestate WILL underquote which is why always add 10-15% on top of the quoted price and THAT will be price that the owners want to sell. If this is too much then save your time and effort.
ALWAYS work out your ceiling, stick to it (yes it feels like you have won when you walk away from it at the end) and do not bother bidding until the property is on the market.
NEVER bid against the vendor’s bid – they can do this but only once and it is not a real bid but a technique to ramp up the price. (I attended an auction where someone placed a bid, then the auctioneer did a vendor’s bid and then the SAME guy placed in another bid! I guess he did not realise that he just bid against HIMSELF!)
WATCH who is bidding – never ever let the auctioneer accept bids from a pot plant behind you. Don’t be afraid to interrupt the process by asking who was the last bidder. (In fact feel free to do this to break that nasty rhythm that makes people panic and bid more.)
Remember that most people hate auctions – THIS IS GOOD because if people are turned off them it eliminates competition.The reason why I like auctions as opposed to private sales is because it gives you a much better FEEL of the market. Is it booming? Is there a lot of interest in the area? What type of people are looking to buy? How eagerly are they spending (are they bidding by reluctant lots of $100 or galloping $10,000)?
At the end of the day auctions are open, transparent and in a sense more honest way to purchase. In private sales you are always told that there is always someone else who is interested in the house. How do you know that this is not a load of bull if you can’t see the person yourself?I have a house for auction at the moment and our first open day is tomorrow. One other benefit as a vendor is that by attending auctions in the area i know how eager the market will be for my popery. I know exactly the date that my house will be sold and can guess when the settlement will happen. I can plan ahead, which is a luxury.
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