Buying at auction? Here is why you need a Buyer’s Agent at your side, especially in a slowing market.
With the market slowing down runaway auction results tend to become less frequent and fewer are the properties that sell well above the quoted range. In fact, many auctions end with the property being PASSED IN either on a vendor bid or to the highest and sometimes only bidder. There is a lot to be said about the auction process, touted by selling agents as the fairest and most transparent way of buying a property, but which is totally geared in favour of the vendor and puts buyers at a great disadvantage. Don’t get me wrong, I am not against auctions and I am not suggesting you shouldn’t be buying at auction. The reality is that in inner Melbourne most properties, especially those with a scarcity factor, are generally offered for sale through auction and you have little choice. For today let’s just focus on a common scenario, occurring very frequently when the market starts to slow down. In the article below we see two instances where the property being auctioned got passed-in on bids which were within the advertised price range and ended up selling after negotiation AT THE TOP or ABOVE the advertised price range.
In the first instance, the Essendon townhouse, the buyer was actually the ONLY bidder, we were not present at either auctions but we can safely assume that also in Northcote there was only one bidder, since the passed in price was barely above the bottom of the advertised price range. So, how come that if there were no other buyers beyond the passed in price where the auction stopped, both of these buyers ended up paying $100k or more above it? We won’t get into the details of the various tricks and techniques employed by them but the simple answer is that the vendor’s estate agents are very good at making buyers pay more, often a lot more, than necessary. They are well trained, highly paid professional negotiators and it is their job to extract from the buyer the highest possible price. So, doesn’t it make sense, if you are planning to be buying at auction, to have a PROFESSIONAL NEGOTIATOR at your side?
By Massimo Andrighetto
