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4624 posts

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#272983 29-Jul-2020 07:43
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I’ve never seen such an outrageous display of the hard sale.

There were two houses for sale at an auction last night. Harcourt’s handed out a brochure on how to bid.

Terrible advice like “bid against yourself.” This means an idiot bids and then the same idiot bids again, without an intervening bid.

Other advice was “try a king punch bid.” An example would doubling the last bid to stun the competition. Yeah, everyone would be stunned at the bell-end.

The first “auction” was a bottle of $10 wine, to warm up the bidders. I thought I’d never see someone bid against themselves, but believe it or not, I saw someone did this very thing. The bottle sold for $50. A bad harbinger.

The first real auction was a house on a 400 sq. meter lot. It was sub-par, completely surrounded by neighbours peeking in the windows.

No one would start bidding. After a pregnant pause, eventually the bidding started, quite hesitantly, with the auction struggling to find victims, I mean bidders.

The auctioneer seeing he wasn’t making an progress, even at $1,000 increments, gave up after a lot of talk about how wonderful the house was, how fantastic the neighbourhood was (it’s not), how lucky the winner would be, and the joys of home ownership.

The auctioneer closed the bidding and said it was below the reserve (just slightly below the QV). He said he would talk to the highest bidder, “to see how to proceed”. A team pulled the high bidder aside. I was able to hear the conversation. Basically a high pressure sale pitch, many against one, asking for more money.

So in bad faith, but legal, the auctioneer re-opened up the bidding again at the last high bid. He directed all his comments at the “winner” and second highest bidder. Most of the starting comments was a high pressure sale to the second highest bidder, basically begging for more money. I felt embarrassed for the second highest bidder, who eventually offered $1,000 more, countered by the original “winner”, who offered $1,000 more. That was the end of that auction. I’m not sure if the winner actually got the house.

While the auctioneer was within his legal rights, and acting in the best interest of the seller, it was chapter-and-verse guide to hard sale tactics.

The second auction was another 1960’s sub-par house, with clearly illegal modifications to the house, described in TradeMe as “Toolbox needed.” Lots of peeling wallpaper, the original hideous 1960’s kitchen. The bathroom had been a the worst I’ve seen, feature a hole in the ceiling cut with a box cutter, and clearly illegal lights hanging through the hole. A neighbour said the owner did a DIY job of moving he bathroom from one room to another. There were giant piles of trash inside and outside the home. The fences and exterior stairs were completely rotten.

The first bid was so high, I walked out immediately. After grabbing a coffee, I came back. It went for $20,000 more than highest QV recommendation.

So long story short, not going to an auction again. If all New Zealanders refused to go to property auctions, because they’re a hard sale technique, they’d stop.

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  #2530455 29-Jul-2020 08:23
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Interesting. There was a point when we were looking that 99% of house sales were auctions in Christchurch.
Not sure if that's still the case.

In all honesty, the only winners from most house sales whatsoever is the marketing agent. It's a cut throat business out there.


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  #2530456 29-Jul-2020 08:27
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Sounds about what i would expect from an auction really, what did you expect?


 
 
 
 


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  #2530458 29-Jul-2020 08:28
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What you witnessed is the whole point of auctions - to get all the buyers into one location and whip them into a frenzy of bidding.  The hope is that the competitive nature of live bidding extracts a higher price than normal.

 

In the rare occasions I have attended a property auction I always take much the same approach as gambling - know your limit and never exceed it.  There will ALWAYS be another perfect property to buy.

 

As with tenders, I am happy to sell this way if my agent advises it, but never to buy.





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OldGeek.


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  #2530509 29-Jul-2020 08:42
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Some agents are so dishonest about disclosure of known facts around illegal modifications/unconsented work. 

 

Agents would be indicating to hopeful home buyers of a price range that the vendors will be accepting, to only reach that amount during auctions and having the auction pass in.

 

I've seen examples of many auctions where families would've done their full due diligence and be wiped at the auction within seconds... as an ex FHB I'd highly recommend other FHBs to avoid auctions... unless of course you are absolute confident around the process and you have additional budget to spend as compared to the house price. 

 

 

 

 


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Ultimate Geek


  #2530543 29-Jul-2020 09:36
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We bought our first home at an auction and the experience was very different to yours. Mind you, this was a mortgagee sale in Upper Hutt in 2009 and there were only 4 groups of buyers, two of whom dropped out very early. Bidding closed at $300,000, $25k under reserve. As the 'winning' bid we were invited to table an improved offer, we said $302,000.....they spoke with the bank who said its ours for $305,000. It doesnt sound like much now but at the time coming up with an extra $3k was a stretch...but we found a way to make it work, 2 minute noodles for 3 months, lol...

My wife found the whole experience very stressful, I enjoyed it. I even bid with a rolled up newspaper, haha.

Several years later at the Wellingron 7's I bumped into the other buyer who we outbid, he was gutted we got the place but we had a laugh and a beer together.

I'd do it again :)

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Ultimate Geek


  #2530563 29-Jul-2020 09:53
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Auctions favour buyers, but the agent works for the seller. I would never sell at auction.





BlinkyBill


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  #2530574 29-Jul-2020 10:13
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you can do phone bid that way you don't have to feel pressured.





Involuntary autocorrect in operation on mobile device. Apologies in advance.


 
 
 
 


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  #2530577 29-Jul-2020 10:14
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House auctions are to drum up high prices in a sellers market. It isn't a sellers market anymore so the bidders are not doing the work for the auctioneer and so you see the hard-sales tactics.

 

It is important to know what the item-for-sale is worth before you go in to any action and it is important to stick to a pre-decided budget.

 

If you know what something is truly worth and you bid close to that (a king punch bid), it can scare the other buyers into not bothering to bid against you and ultimately keep the final price down. Same again with bidding against yourself/double-bidding when they're going up in small increments. Same with bidding confidently and not waiting until the second or third call. The other bidders don't know what price you are prepared to go to and can incorrectly assume you're going to go silly on the bidding. I've won several auctions that way and walked away with a good deal.

 

The lack of quality of the houses isn't really relevant in this case. If they're not suitable for your situation, you shouldn't be considering them.


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Ultimate Geek


  #2530582 29-Jul-2020 10:24
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tripper1000:

 

House auctions are to drum up high prices in a sellers market. It isn't a sellers market anymore so the bidders are not doing the work for the auctioneer and so you see the hard-sales tactics.

 



 

Housing stock is down 12% against the same time last year, thousands of NZ’ers are coming home and looking for houses, interest rates are very low.

 

It’s a sellers market all right.





BlinkyBill


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  #2530600 29-Jul-2020 10:28
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roderickh: Some agents are so dishonest about disclosure of known facts around illegal modifications/unconsented work. 

 

As I understand it, the rules on this have been tightened. If someone (such as a potential buyer) informs the agent of problem, the agent can not hide this from other buyers (happy to be corrected).

 

A work colleague got a house at a cheap at an auction because the builders inspection they commissioned revealed foundation problems that had to be revealed to, and scared away, the other buyers. The seller could have withdrawn the house from sale, fixed the foundation and put the house back up for sale, but chose to flick it off quickly.


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  #2530716 29-Jul-2020 13:25
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tehgerbil:

 

In all honesty, the only winners from most house sales whatsoever is the marketing agent. It's a cut throat business out there.

 

 

We've always done well buying and selling property.  If you are prepared to negotiate and hold the line, which many people lack the confidence to do,  you usually get a result.  Selling high while buying low makes a huge difference to equity.

 

But for sure, the agent wins if the house sells and a quick sale is good for them, regardless of impact on their client.





Mike

217 posts

Master Geek


  #2530906 29-Jul-2020 17:56
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kingdragonfly: I’ve never seen such an outrageous display of the hard sale.

There were two houses for sale at an auction last night. Harcourt’s handed out a brochure on how to bid.


 

 

 

Was it run by Aaron? This is typical him doing the show :)


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  #2530909 29-Jul-2020 18:07
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Been to several Auctions and none of this behaviour is unusual.

 


We just bought a house at Auction as we had no other option, but as we were away on holiday we had a phone/video bid which took some of the stress away.





Generally known online as OpenMedia, now working for Red Hat APAC a Technology Evangelist and Product Manager. Still playing with MythTV and digital media on the side.


16469 posts

Uber Geek


  #2530910 29-Jul-2020 18:08
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MileHighKiwi: We bought our first home at an auction and the experience was very different to yours. Mind you, this was a mortgagee sale in Upper Hutt in 2009 and there were only 4 groups of buyers, two of whom dropped out very early. Bidding closed at $300,000, $25k under reserve. As the 'winning' bid we were invited to table an improved offer, we said $302,000.....they spoke with the bank who said its ours for $305,000. It doesnt sound like much now but at the time coming up with an extra $3k was a stretch...but we found a way to make it work, 2 minute noodles for 3 months, lol...

My wife found the whole experience very stressful, I enjoyed it. I even bid with a rolled up newspaper, haha.

Several years later at the Wellingron 7's I bumped into the other buyer who we outbid, he was gutted we got the place but we had a laugh and a beer together.

I'd do it again :)

 

 

 

Auctions in the Wellington region tend to be  more rare. I went to an Auction in the Hutt about 5 years ago, and there wasn't a single bid, even though the house was full of people wanting to see who would bid. Sold a week later. Tenders seem to be the main way of selling in Wellington. Tenders potentially should be able to get a better price, as the winner of an Auction may not have bid up to their limit. But in a tender, the person who wants to buy it, will usually put in their top figure they will pay. But some people also hate tenders and won't put in an tender offer.


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  #2530976 29-Jul-2020 19:20
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We sold two houses in the last 4 years by auction with Harcourts. Same experience. Bids stopped. We went into an office as the seller to discuss. The offers from us went back and forth and they sold.

 

Both well above the last bid


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