Real Estate Auctions in Canberra; Vendor bids

CoffinRX2 said :

Vendor bids are legal and legitimate

And also completely irrellevant. Google “the winner’s curse”. Forget about what the owner paid for it 2 years ago, that’s not relevant to the price today. Don’t be falsely reassured of the property’s value by others willing to bid the price up. You don’t need to share other people’s mistakes.

Have a look at the house before the auction and decide what you think it is worth, then bid that and only that. Or better yet wait until the property is passed in (happening a lot lately) and negotiate from the driver’s seat.

devils_advocate said :

VYBerlinaV8_is_back said :

If you want to buy a more expensive than average house, now is the time to do so.

I would agree that now is a better time than in the past 7 years or so, but I would say that “from now is the time to do so”.

expectations are starting to adjust, slowly but surely. People are starting to realise that property prices can move (have moved) down, and the ‘property doubles every seven years’ is a crock of BS. Soon it will get to the point that people who bought in the past 2 or 3 years realise that the mere fact they paid $x for a property doesn’t entitle them to $x + $y at sale time – the price is what others are willing to pay for it. Not their cost base plus some ridiculous capital gain.

The stock on market statistics tell the same story, there was 17.4% more stock for sale in June this year compared to June last year, and the overall stock levels are about double the long term trend.

Either demand is going to have to pick up a lot, or people are going to have to keep lowering their prices if they actually want to sell.

VYBerlinaV8_is_back said :

If you want to buy a more expensive than average house, now is the time to do so.

I would agree that now is a better time than in the past 7 years or so, but I would say that “from now is the time to do so”.

expectations are starting to adjust, slowly but surely. People are starting to realise that property prices can move (have moved) down, and the ‘property doubles every seven years’ is a crock of BS. Soon it will get to the point that people who bought in the past 2 or 3 years realise that the mere fact they paid $x for a property doesn’t entitle them to $x + $y at sale time – the price is what others are willing to pay for it. Not their cost base plus some ridiculous capital gain.

I say this as both a property owner; and an opponent of counter-productive but politically expedient government interventions in markets.

Vendor bids are legal and legitimate

The market for more expensive property in Canberra is dead anyway, so the auctioneer was probably just trying to get some movement on the auction.

If you want to buy a more expensive than average house, now is the time to do so.

Vendor bids are not legal in all States/Territories. It is really just a way for the vendor to set the reserve.

It is a useful tactic designed to indicate the sorts of price the vendor is looking at. It would be even more useless to have a vendor only willing to consider offers above $500 000 when the highest bid you have is $350 000. A vendor bid at $450 000 puts the market on notice as to what it will likely take to get the property.

New to auctions are you Kim?

Whether you like the vendor bid tactic or not, it is legal and is almost always below the price the seller wants to achieve.

So, using your Luton example, it probably doesn’t matter if he stuffed up his timing. Chances are his bid still wasn’t as high as the price the vendor had in mind. Those selling at auction are often too stubborn to adjust their expectations to the price the market nominates on the day.

In any case, from what I’ve been told by agents, many times they will go to auction knowing full well the house up for grabs won’t sell on the day, but with an aim to flush out the serious buyers and finalise a sale in the next 3-4 weeks. Doesn’t always work like that, of course, but it is a method employed nonetheless.

If your alleged buyer at Yarralumla was fair dinkum they will have initiated negotiations at the fall of the hammer. It was a nice looking house, I wish them well.