Originally posted by eri
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Auctions 101
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Hi all,
In a similair situation. Newbie buying at auction. I have read about asking questions before an auction
metromag.co.nz/city-life/property/buying-house-auction-10-secrets-of-success/
"Ask the auctioneer a negative question. “Is the property still subject to road widening?”; “Is the second kitchen in the sleepout legal?” It might, says Hoy Fong, be enough to scare off some rivals."
Is this a tactic you guys and gals have used before? If so when do you do it? Watching videos on youtube doesn't seem like you get the opportunity to do such a thing.
Also any thoughts on how to choose a starting bid and if you should start bidding?
I like the idea of leaving if it gets past your "number"!
Cheers
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Make sure you know what vender bidding is.
Dont bid against yourself.
Remember its not real until you hear the auctioneer count it down - otherwise its all make believe.
Once the auction is passed in - make an offer, change the contract for better terms. Maybe offer bigger deposit etc
Tell the realestate agent you no longer interested but will come out of interest to the auction - or be late for the auction (obviously not to late - ie have a plant who will ring you to come into the room.).
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I guess my builders report raised a few issues which I am not too concerned with but I thought it would be good to bring it up before I put a bid in.
e.g. I just wanted to clarify XXX before I bid $545k...
I have never been to auction before and have just been watching a couple on youtube and the auctioneers and agents seem just as scammy as this tactic may sound to some.
To be honest my whole experience in the real estate game has been pretty poor. People talking stuff up when there is nothing to talk. Lots of vague answers.
Anyway its all pushing me to play on their level hence me asking this question.
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Originally posted by TheFlash View PostMake sure you know what vender bidding is."DEBT BECOMES IRRELEVANT WITH INFLATION".
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Frezzing you are 1/2 right.
Vendor bidding is when the auctioneer bids on behalf of the vendor, with the obvious intention to push the price up. You should be made aware if this will be policy, before the auction starts.
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There is what auctioneers say they will do, and then what they actually do.
The old - ive got a reserve number written down in my top pocket trick - honest.
Ive seen an auction run past the reserve price without it being disclosed until the price dwindle to $1000 lots - risky but that's what happened. Then the reserve has been magically met - so bidding starts again.
When the auctioneer goes up in lots of 15,25 - you know your miles from the reserve, ie refuses smaller amounts from the floor - its simply because hes got to get to the reserve - and there is a disjoint about real price versus venders price.
9 times out of 10 the vender reserve will be set higher than what the market wants to play anyway, and so hence the auction itself is just smoke and mirrors. But sometimes you do have a sucker who wants to think he's "Winning" the auction.
Once the auction fails they (RA) go back to the seller and say - look at this market price, re-adjust your price expectation down if you want to sell.
Now the fact that you haven't been to any auctions - means your gunna be fresh meat. If you can get to a barfoots one held on a Thursday usually - it will be educational - (not that they do vender bidding).
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Keep your hands in your pockets and your mouth shut until the bidding has stopped. Observe. Then step in with the highest bid by $500 once everyone else is spent. Providing it is within your figure.
Have never had the balls to do it, but have seen it done very effectively. Buyer only places one bid and secures the deal.
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We were top bidder at an auction and bought afterwards for a lot less than were were prepared to spend.
When we did our research we found there was a partly finished extension which had no council sign off. (Vendors ran out of money.) The standard terms and conditions specified no outstanding approvals. We told the listing agent the evening before, deliberately very late. Next morning the agent had to stop each attendee at the door, tell them the issue, give everyone an amended agreement. The auctioneer had to spell it out too.
We waited till the bidding stopped -- well short of the reserve, funny that -- then put in a much higher bid than the last one.
Anyway, probably a one off situation but a good example of disrupting the process. And doing homework.
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