What do I need to know / do pre auction (buying not selling)?

Discussion in 'The Buying & Selling Process' started by Dan Donoghue, 7th Oct, 2016.

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  1. Scott No Mates

    Scott No Mates Well-Known Member

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    Take a few bikie mates, I usually find that more intimidating ;)


    While you're walking through wih a p&b in hand talk to your stooge/partner - 'is this what the b&p said was .......'

    An agent mate of mine used to slow down the bidding and if challenged by the auctioneer would ask "are you refusing my bid?"

    IIRC 'auction conditions' remain for 24 hours post auction in NSW. Also it is likely that you need to sign a S66W to waive cooling off period if you buy preauction.
     
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  2. beertank23

    beertank23 Well-Known Member

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  3. MrFox

    MrFox Well-Known Member

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    That is why the agent may be hesitant to sign you up on Tuesday with auction scheduled on following Saturday. If they would allow you to sign on Tuesday and you cooled of at 5 pm on Friday with auction scheduled for 11 am Saturday they would stuff the campaign for the vendor. If you make your offer on Wednesday there is no cooling off so it is a done deal for the vendor.
    From the buyer point of view, if you need to put conditions on the contract like STF or subject to FIRB approval you will need to sign the contract on Thursday after the property was passed in on previous Saturday. On Thursday it reverts to normal private sale.
     
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  4. Scott No Mates

    Scott No Mates Well-Known Member

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    @MrFox - If buying preauction you will be required to sign a S66w as the vendor will not risk the marketing campaign or have the sale fall over.
     
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  5. MrFox

    MrFox Well-Known Member

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    As I mentioned above my posts are relating to Victorian auction rules only. Each state is different so maybe someone else can enlighten us about how it works elsewhere. I believe in NSW cooling off is 5 days?
     
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  6. Scott No Mates

    Scott No Mates Well-Known Member

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    Regardless of the cooling off period, the agent will not jeopardise the auction campaign by accepting an offer which is subject to cooling off.

    If a conditional offer is accepted, the momentum of the auction campaign is lost. If the deal falls over you have to take the property off the market before restarting the auction marketing at a cost to the vendor.
     
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  7. Jasmine

    Jasmine Well-Known Member

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    I thought in Vic, if a property is "passed in" and is negotiated after the auction, then the property is sold as a private sale.
     
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  8. MrFox

    MrFox Well-Known Member

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    If its sold immediately after, the term is passed in and sold after auction. Still under auction conditions. The agent can pass it in on purpose if they think you have more gas in the tank.
     
  9. Perthguy

    Perthguy Well-Known Member

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    When we sold our place in Melbourne at auction the bidding reached the reserve but the agent passed in the property instead of putting on the market. He called it a strategic pass in. We negotiated with the highest bidder and reached agreement in about 5 minutes. The purchaser signed the contract under auction conditions.
     
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  10. neK

    neK Well-Known Member

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    Agree with your post... except I don't see the point of number 6.

    I find the point 5 - the fast flurry of punches works better.
    Also i don't like varying my bid size. I start at 1k increment and stay there. In my opinion variation your bid (ie going lower than your previous) gives people false hope.
    I prefer to beat people to the ground and continuously kick them (terrible i know, but that's auctions for you).
     
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  11. Jasmine

    Jasmine Well-Known Member

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    Whoa! Was that legal? Didn't you have to reveal your reserve? Did you can your agent amend the authority before revealing your new reserve?
     
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  12. Perthguy

    Perthguy Well-Known Member

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    I am not a Barrister or Solicitor so this is not legal advice. As far as I know, an agent has no legal obligation to declare a property is 'on the market' during an auction. During our auction, our agent did not declare the property 'on the market'. As far as I know, that means a strategic pass in is ok.

    (Not legal advice)
     
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  13. mcarthur

    mcarthur Well-Known Member

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    but I wonder if there is an obligation to say the words (or something) if the property will be sold to the highest bidder at the drop of the hammer. That is, the auctioneer has the right to decide when to declare that the property "will be sold" once the reserve is reached, but after reserve is reached the words must be said before the fall of the hammer.
     
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  14. Perthguy

    Perthguy Well-Known Member

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    I think so.

    Interestingly, Consumer Affairs Victoria claims that during an auction, an auctioneer may withdraw a property from sale at any time. @Dan Donoghue, it might be worth reading up about the acution rules in QLD from the fair trading (consumer affairs) web site.

    The auctioneer may:
    • refuse a bid at any time during the auction, including when the auction hammer is falling
    • if there is a dispute over a bid, resume the auction at the last undisputed bid or start the bidding again
    • refer a bid to the seller at any time before the conclusion of the auction
    • withdraw the property from sale at any time.

    Buying property at auction - Consumer Affairs Victoria
     
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  15. MrFox

    MrFox Well-Known Member

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    Yet it is legal. The reserve price will be sign off by the vendor prior to auction commencing. (sometimes even 5 minutes before). Reserve is a moving target depending on how the auction goes. Let me give you an example:
    The vendor sign off a reserve of $1,200,000. The agent knows that particular buyer has sold, needs to move as settlement is approaching and was an underbidder on similar property around the corner at $1,290,000 (comparable home but above market result for the area). The bidding stalls at $1,240,000 and the hot buyer is the highest bidder with no one else challenging them. As a vendor what would you like the agent to do? Put it on the market and if no one else bids sell it for $1,240,000 or pass it in and negotiate? In situation like this 9 out of 10 times the property will sell for more than pass in price.
     
  16. Ouchmyknees

    Ouchmyknees Well-Known Member

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    If a bidder asks:"is it on the market?" Does the Auctioneer has a legal obligation to respond?
     
  17. Perthguy

    Perthguy Well-Known Member

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    Don't know. I don't think auctions are very well regulated. They are a bit of a sham really as far as I know.
     
  18. The Y-man

    The Y-man Moderator Staff Member

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    Depends on the agency/auctioneer.
    I have sold at auctions where the auctioneer asked me not to tell him the reserve, so he could go as hard as he could, then come back in to confer when the bidding stopped. So up to that point, he really didn't know.

    The Y-man
     
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  19. Chris Au

    Chris Au Well-Known Member

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    Interesting! Keep them working until the end!
     
  20. Big Will

    Big Will Well-Known Member

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    The auctioneer asked him to not disclose not he didn't want to disclose.

    Once the auctioneer announces it is on the market or we are going to be selling here today something that indicates it is 'on the market' then it will sell. Otherwise it would be up to the agent I am guessing it is up to the agent if going 'on the market' is going to be good enough or pass it in. If there was only one bidder then they might pull it from the market and negotiate further. If there is a flurry of activity then it would make more sense to tell the buyers it is on the market to push them further.
     
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