Offer on a house set to be auctioned. Agent compliance question.

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#1994321 11-Apr-2018 16:11

Batman:

Legally speaking, if the auctioneers announces reserve is met then the house will sell. But it has nothing to do with whether the reserve is signed in concrete. They may sign they may not have signed. It won't matter to the auctioneer, his job it to hold the auction.

From Aussie auction programs I have seen, what they usually seem to do is once they reach a ceiling of what a buyer is prepared to pay, they say that they will now go and discuss it with the vendor. Then they will come out and restart the auction and will say if it is now on the market, or they may put in a higher vendor bid. If I was selling at auction, that is the way I would want it handled, but I do wonder if they do that in Auckland with all the multiple auctions they run in their offices. I have been to quite a few house auctions in Wellington, but never actually seen a house actually sell at auction in Wellington. They seem to negotiate afterwards and then sell.

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#1994327 11-Apr-2018 16:23

mattwnz:

Batman:

Legally speaking, if the auctioneers announces reserve is met then the house will sell. But it has nothing to do with whether the reserve is signed in concrete. They may sign they may not have signed. It won't matter to the auctioneer, his job it to hold the auction.

From Aussie auction programs I have seen, what they usually seem to do is once they reach a ceiling of what a buyer is prepared to pay, they say that they will now go and discuss it with the vendor. Then they will come out and restart the auction and will say if it is now on the market, or they may put in a higher vendor bid. If I was selling at auction, that is the way I would want it handled, but I do wonder if they do that in Auckland with all the multiple auctions they run in their offices. I have been to quite a few house auctions in Wellington, but never actually seen a house actually sell at auction in Wellington. They seem to negotiate afterwards and then sell.

Didn't they do that on one of the NZ housing competitions? Restart the bidding after a conversation with the bidder? Could be wrong. I am sure it must happen here.

Handle9

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#1994372 11-Apr-2018 17:03

It depends. If the house has passed reserve it will generally go on the market without further discussion unless the agent believes there is significantly more money to be had. If it hasn't reached reserve then they will generally try and see if the vendor will lower the reserve or if they can get the bidder to up their bid to the reserve. If it doesn't reach reserve it gets passed in with the first right of negotiation being with the highest bidder.

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#1994397 11-Apr-2018 18:23

Handle9:

It depends. If the house has passed reserve it will generally go on the market without further discussion unless the agent believes there is significantly more money to be had. If it hasn't reached reserve then they will generally try and see if the vendor will lower the reserve or if they can get the bidder to up their bid to the reserve. If it doesn't reach reserve it gets passed in with the first right of negotiation being with the highest bidder.

If the auction paused and people got taken away for a chat then when the auction resumes, the auctioneer re-starts bidding where it left off if its close to the reserve or will simply begin the bidding at a suitable figure which someone in the side negociation indicated they were happy with....

As you say, once reserve reached then the property is 'on the market' and best bid wins.

Auctions are only effective if people have had a chance to do due dilligence or the property is really hot.

For average joe house, I dont see it worthwhile... deadline treaty is perhaps better.... then you can see what the market wants to pay.

Up to you if you dont decide to accept offers.

Auctions are simply a vanity/volume push by the agencies.. they want to show high volume sales to attract listings (plus they dont have to muck about with the traditional sales processes).

There are companies who simply charge by time and Ive met one guy who does this and makes a decent living from it. He only charges out time spent on selling the house and in most cases his fees average out slightly below market commision rates.

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#1994408 11-Apr-2018 19:29

Goosey:

Handle9:

It depends. If the house has passed reserve it will generally go on the market without further discussion unless the agent believes there is significantly more money to be had. If it hasn't reached reserve then they will generally try and see if the vendor will lower the reserve or if they can get the bidder to up their bid to the reserve. If it doesn't reach reserve it gets passed in with the first right of negotiation being with the highest bidder.

If the auction paused and people got taken away for a chat then when the auction resumes, the auctioneer re-starts bidding where it left off if its close to the reserve or will simply begin the bidding at a suitable figure which someone in the side negociation indicated they were happy with....

As you say, once reserve reached then the property is 'on the market' and best bid wins.

Auctions are only effective if people have had a chance to do due dilligence or the property is really hot.

For average joe house, I dont see it worthwhile... deadline treaty is perhaps better.... then you can see what the market wants to pay.

Up to you if you dont decide to accept offers.

Auctions are simply a vanity/volume push by the agencies.. they want to show high volume sales to attract listings (plus they dont have to muck about with the traditional sales processes).

There are companies who simply charge by time and Ive met one guy who does this and makes a decent living from it. He only charges out time spent on selling the house and in most cases his fees average out slightly below market commision rates.

From the two we sold by auction, going to the wee room happens when bidding stops and reserve is not met. If reserve is met, bids stop when one man is left standing, its sold.

Auctions:The market decides. If there is only one party, how much they can afford is what you get. if there are two or three keen buyers you will get top dollar

Deadline: The buyer is forced to offer their top dollar. The seller may be happy under that, you will never know. You might tender just below the next guy, you lose, you will never know. I'm unsure if there is any leeway to negotiate afterwards, if the top bid is not enough? If so, it depends how good you are to get top dollar

billgates

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#1994411 11-Apr-2018 19:47

The listing agent for the house that we are interested in had an auction today for another house his team is marketing.. Not even a single bid was made...unsold..

https://www.trademe.co.nz/property/residential-property-for-sale/auction-1570463233.htm?rsqid=40683418292943a8ace2a225da2f5da4

Do whatever you want to do man.

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networkn

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#1994413 11-Apr-2018 19:57

That's a nice place!

He has the same model projector as I do.

I wonder how much over it's RV it would be going for, though it would be a cold day in hell before I lived in Hamilton again.

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#1994414 11-Apr-2018 19:59

billgates: The listing agent for the house that we are interested in had an auction today for another house his team is marketing.. Not even a single bid was made...unsold..

https://www.trademe.co.nz/property/residential-property-for-sale/auction-1570463233.htm?rsqid=40683418292943a8ace2a225da2f5da4

As I said, that may or may not matter to the vendors. If the vendors have 5 years to sell their house, and they want X dollars, then they won't sell at $1 under that X.

If vendors have purchased something and 100% needs the cash 3 weeks after auction day, then they are going to be a bit anxious and if you are the only bidder offering a million dollars below X, they will sell it.

(Sometimes it's somewhere in the middle. Eg a not so bitter divorce.)

It's that simple.

At the moment, I am feeling that you believe it is the latter but actually without digging around a bit, you don't know that. I hope for your sake it's the latter of the 2.

billgates

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#1994416 11-Apr-2018 20:12

The only thing I know about the vendor selling is that they want to build a new house with swimming pool. Once the house is sold, they will then move to a rental home. I don’t know if their new house build has started yet or not or whether they even have land to build on.

The unsold house I have linked to above, when I enquired from the listing agents one of many employees few weeks ago, they said offer should be atleast $1.1 million.

Do whatever you want to do man.

Batman

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#1994421 11-Apr-2018 20:17

they want to build a new house.

they haven't started building.

they want the cash to build, and then move to rent while build takes place.

they don't have to sell below their asking price (which is unknown for now, it will be revealed in due time), they might, but it sounds like they don't have to.

mattwnz

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#1994532 12-Apr-2018 01:46

billgates:
In terms of the reserve price, except for vendor and listing agent no one else can find out for sure. One of my friends did however came up with a theory which may be true to find out the reserve price via trademe.

If you do a filter search on trademe and set a price range, you will see houses listed which fall under that price bracket. The houses ofcourse have no prices listed.

It's the 1st house in search link. Reserve price as per the looks like set at $1 million.

https://www.trademe.co.nz/browse/categoryattributesearchresults.aspx?134=14&135=16&136=974&153=&132=PROPERTY&122=0&122=0&49=1000000&49=1000000&29=House&123=0&123=0&search=1&sidebar=1&cid=5748&rptpath=350-5748-

https://www.trademe.co.nz/property/residential-property-for-sale/auction-1591380017.htm?rsqid=5bf8c0b9134c4676b7f0aa3c2adb7c97

If you order by ‘price’, all the properties in Hamilton that are for sale, and then Scroll through all the pages until you find your one. Then look for a houses above and below your one that has a price listed, and that will show you the price that the agent has it listed between, which they expect it to sell for. It appears to be between 1 million, an 1.21 million. You can get a more accurate figure by increasing the sample area. Whenever you list a property on trademe, you have to put a figure that you think it will sell for, even if an auction or tender. Even though it isn’t publicly displayed, this trick allows you to get a idea of what it is.

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MurrayM

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#1994594 12-Apr-2018 08:29

Goosey:

If the auction paused and people got taken away for a chat then when the auction resumes, the auctioneer re-starts bidding where it left off if its close to the reserve or will simply begin the bidding at a suitable figure which someone in the side negociation indicated they were happy with....

I've never bought or sold a house at auction but I've wondered about those "little chats". Does the agent try to put pressure on the parties to rise their offer / lower their expectations? I think if I was buying and they wanted to drag me into a room away from the auction I'd say "No thanks, you've got my offer, don't bother trying to squeeze more money out of me".

evnafets

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#1994612 12-Apr-2018 08:49

In my single experience of it, that little chat is basically "You're at $XXX, the seller wants $YYY" Are you prepared to go up? It went back and forth a few times.
We went up a bit, they came down a bit and we basically met in the middle.

I was actually prepared to pay the $YYY if the bidding went up that high - it's what I thought the house was worth. We were the only bidder (apart from 'Vendor bids' which basically bought it up to $XXX) Maybe we could have got it for less, but I'm not unhappy the outcome.

Wheelbarrow01

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#1994627 12-Apr-2018 09:09

networkn:

mattwnz:

Batman:

Legally speaking, if the auctioneers announces reserve is met then the house will sell. But it has nothing to do with whether the reserve is signed in concrete. They may sign they may not have signed. It won't matter to the auctioneer, his job it to hold the auction.

From Aussie auction programs I have seen, what they usually seem to do is once they reach a ceiling of what a buyer is prepared to pay, they say that they will now go and discuss it with the vendor. Then they will come out and restart the auction and will say if it is now on the market, or they may put in a higher vendor bid. If I was selling at auction, that is the way I would want it handled, but I do wonder if they do that in Auckland with all the multiple auctions they run in their offices. I have been to quite a few house auctions in Wellington, but never actually seen a house actually sell at auction in Wellington. They seem to negotiate afterwards and then sell.

Didn't they do that on one of the NZ housing competitions? Restart the bidding after a conversation with the bidder? Could be wrong. I am sure it must happen here.

Yes it does happen here. I was the highest bidder at the auction for my house but my bid was under the reserve. I was pulled into the office for "the chat" and they told me I needed to raise my offer to X. I said I can't go that high but I could go to Y. I stuck to my guns despite immense pressure by the selling agents who tried every tactic they could think of to get me up higher - including asking me if I could borrow extra funds from family members when I said I had reached maximum bank funding.

At the conclusion of the chat, we all went back into the auction room and the auctioneer said the bid had been raised to Y and the house was now on the market. There were a few tense moment when I could hear the under bidders considering whether or not to make one last bid. As I was at my absolute maximum I willed them not to do so. Fortunately they didn't and I subsequently bought the property under the hammer.

Auctioneers will generally try to avoid passing the auction in and then selling by negotiation later. The reason for this is that a sale under the hammer is unconditional, whereas if a sale is made during a post auction negotiation, there are generally conditions to be fulfilled which provides potential wiggle room for the buyer to back out of the purchase at a later date.

Batman

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#1994645 12-Apr-2018 09:25

On the contrary I've seen many auctioneers who appear to be very keen to pass in on the auctions. It's like they need to get to the bathroom or something.

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