Who Dictates The Sale Price - The Buyer or The Seller?

That is one of my main reasons for being in PC - and that is educate people, based on my experience, my knowledge, my skill set, ...

Another main reason is to continue my education (even though we are no longer in accumulation phase wrt property and shares ) - the more I think I know, the more I realise I don’t know.

 

My son sold a property at auction some years ago.
He set the reserve, $560K.
Final bid was $595K, contract signed and sale completed at that amount.
Who set the price?
Marg

 

If you say so I thought you agreed to disagree. ? I think we can have a different opinion.... right

read gochie post this pretty much sums it up and also my view on the subject.

Hope she is experienced enough for you


MTR

 

Your son.

If an auction is going well, the seller is allowed to increase their reserve as long as the highest bid is lower than the current reserve.

By the same token, if an auction isn’t going well, the seller is allowed to lower the reserve (and put the property ‘on the market’ if they want to).

So, your son could have, for example, increased the reserve to say $600K (as long as the higher offer at the time was less than $560K at that time) and then he could have later reduced the reserve to say $595K and put the property ‘on-the-market’ when the bidding slowed/stalled. He was in control.

In other words, at all times he was dictating the final sale price, whether he knew it or not.

 

You and @Gockie both are and both are far more experienced than me .

I am still a learner and trying to educate far less knowledgeable and experienced than me.

I know in spruiker-land, they espouse that buyers ALWAYS dictate the sale price, understandsble as their audience is mainly (inexperienced) buyers.

But, in reality, that is NOT the case, it is the seller.

 

The buyer, you only need 2 people bidding against each other to create competition

However if there was no competition it would be a different story.....

Market conditions play massive role, and why auction clearance rates today have dropped, less demand and more supply coming to market

 

Disagree. I have explained why to @Angel post.

Another PC member whose experience I respect

 

There would be 100% clearance rate if a seller didn't have control over the price received. The fact clearance rates are dropping is because buyers cant dictate what the seller must accept. Also bank valuations are based on what previous sellers have accepted not what most buyers have offered, but a seller is not bound to sell an individual property at what some-one else deems its value to be. Competition or even the market ,has nothing to do with what a seller has to accept just one person has to offer a price that the seller is willing to accept. A buyer cant control what a seller will accept. The seller is not selling the market. He is deciding the best place to allocate capitol for his needs, he can decide at a certain price point if a sale is beneficial for his individual needs. What a bank, or buyer decide the value is, has nothing to do with where the sellers capitol is best allocated for either lifestyle or financial reasons.

 

Common sense at long last .

 

Lol. Getting bigger than Ben Hur

... we are talking about the market, not 1 person, 1 sale, this can not dictate the market value....hence why I refer to how valuers establish market value

How an individual manages their capital has nothing to with dictating market value

Now......if only we could get buyers at auctions in Syd and Melb to pay 2015/16 prices

.

 

I thought we were talking about the sale price for each and every property. One person dictates it, the seller.

Still would need sellers to accept those prices for it to be a sale .

 

Not even close...lol

I think i will leave it at this, more than enough energy wasted on this very basic thread
Dont link me on this please

 

Joint venture

 

@radson said it best, it's both.

Share market is a better analogy. A sale takes place between the most desperate seller and the most keen buyer.

Property is a far less efficient market but the same basic principle applies. Houses change hands when both sides find a price they think is reasonable.

 

As someone said on the original thread:

 

I have bought and sold a lot of shares over the years. I have never categorised my actions as described above .

Another big difference between the share market and the property market is that not many (that is, nil) buyers purchase shares to live in.

Even if both find s price that they think is reasonable, the seller has the final say, they determine the outcome .

 

Lol if noone can win over if ones not see the benefit of understanding objective abstract rule to make money

There are much more behind the logic to start from market dictate the price to adapt your investment

We are here not to win an argument, we are here to learn to look by using other eyes, other ways of thinking to, ultimately to learn mistake to avoid them ourselves

On a simple basic rule, you will decide you way to take risks and I humbly realized that the experience ones offten right, not all the time but the mistakes/wrong believe repeats itself in history

 

I think the ambiguity of the title is the issue, and we are all currently debating semantics with both sides of the fence being right.

Sale price in the singular is determined by the seller of the property, if the buyers don't offer enough money then the seller refuses to sell, no sale, no sale price, moot.

"The Sale Price" when looking at the broader market would be both the buyers and the sellers, as the buyers have to agree to the buy price, and the sellers have to agree to the sale price for a sale to occur, if this doesn't happen, no sale, moot

Overall as well, if there are no buyers in a market, like at all, then no sales can occur, because you need both party's to enact a transaction, think of property out west that sells for $1 per acre, they are doing everything possibly short of giving it away to enact a sale.

 

Often the agent can set the final price. Agents quite often play both sides and suggest (Sometimes very strongly) what price would seal the deal or is needed etc to both sides . People underestimate the influence and power agents can have in what is often a very emotionally charged transaction . Sure, the market will dictate a range and sellers and buyers will have their acceptable sell/buy range . But final amount can often be 'dictated' by an agent, imo.

 

Or it is dictated by YOURSELF if you control your risks and don’t let bad situations or life event affects your decision to sell. The moment, your needs to sell emotionally likes in divorce, court case, health or debt issues, you cannot make any decisions at all, not to mention the sale price. So learn and prepare not to be THERE to dictate whatever we like