How long prior to the auction, do you advise the reserve figure?

[Dugster]

I'd agree with that shelby except to my mind, the reserve is irrelevant to the buyer, as they don't (shouldn't) know what it is. So if you want to set a reserve 50% above what you think it'll go for! then why not? You can always bring it down. Personally I've decided ill set mine high, with the aim of negotiating in the back room with the highest bidder, so as to squeeze the last few thousand out of the deal. The more I think of it, the more I think the reserve is just a way to play the expectation management game back at the agent.

[BlakeShelby]

I bet there is a bit of this vendor conditioning happening for sure, so totally agree with what your saying.
Though I guess what I'm saying is that if you want/need $1m for a property your agent appraised at 7-800k then you should know this before going through an Auction campaign. If as you say are willing to deal with the highest bidder on the day then great set it sky high as long as you know what is realistic and negotiate on the day.

[Davo36]

The agents use the reserve figure too.

If you go to an open home and ask the agent what is the price expectation, they will give you a figure, or a range. They'll say something like "Buyers are telling us they think it's in the 600s somewhere."

Now they will go up and down with this figure (or range) as they see fit i.e. they'll change it if they think they need to get people up in price or if they want to lowball it to get someone to fall in love with it and then pay over the odds.

[PTILoveYou]

From experience agents tend to tell potential buyers a lower range to draw them into the auction. This is if the agent knows the auction may struggle to attract the number of buyers.

[PTILoveYou]

1/100 Barrack Road Mt Wellington was auctioned and sold for $740k this Wednesday.

Prior to the auction last weekend, I asked the agent how much you think it will go for, the agent just said 'you are out there all the time you should know better'.

In the end, it was a stupid price for a done up 3 beddy 2 bathrooms, 1/2 section.

[Davo36]

It's just such a stupid system. What other product or service in the world is marketed without a price?

[BlakeShelby]

Happened to witness some pretty cool auction style bidding at a Tokyo fish market a few years ago. Seemed to work pretty well in the sellers favor as prices were blown out of control for certain fish. Seems like a valuable option for the right property and market.

[Dugster]

Yeah the flower markets in Europe do reverse auctions, so start at a high figure and work down. First to blink buys it. Sounds more fun.

[DaveW]

There is the Indian cricket league, they auction for players. You would be daft to name a price if you were a good player.

Set your reserve high, you can always lower it. Besides the conditional buyers come out of the wood work if the property is passed in and that puts pressure n the conditional buyers to come up with the goods. I love Auctions.