…Auction negotiations…

11th April 2017….Auction negotiations…

Auction gavelThe opening bid from the only other legitimate contender in the room has been declined by the auctioneer. 

And the silence continues in the room.

Thank goodness for smart phones…. it gives the ‘room fillers’ something to do. The property agents can continue to scroll through their social media and emails without disturbing the real business of the auction.

Bidding recommences…. the auctioneer has managed to cajole an extra $30,000 from the opening bidder….. we are now at $880,000 and the auctioneer seems a lot happier. 

I wonder how the seller is feeling at the back of the room. And our MIA bidder has still not appeared. 

Mitch and I confer over the phone. We know the pre-auction offer we submitted, which was rejected,  and figure we still have a lot of room to move. We take our time bidding. It’s another strategy to take control of the auction. The auctioneer is not going to sell at this price, and he needs us to come into the bidding.

He will wait for us. 

Just then, a woman comes in to the auction room, and heads to the other side of the room. She has a bidding card….. is this our ‘hostage’ who has somehow finally navigated the treacherous pathway of Macleay Street on a Tuesday night, and made it to the auction. I wait and watch as she comes up to speed. Given she is so keen, will she bid…..

Still silence. 

We bid….$885,000.Sole bidder image

The auctioneer smiles, and it seems he is happy that he might just have an auction on his hands. He figures now he has control back. If he can put doubt in the bidders minds, he might extract those extra $$$ the seller wants. 

He tried to engage ‘Opening bidder’ and then back to ‘Hostage bidder’ . I guess he figures “….come on give it a go….help me out here…. you’re my only hope”

‘Opening bidder’ comes back at $890,000

We counter immediately at $900,000.

Then silence….

Still silence….and the property agents have just liked 5 posts and uploaded to Instagram…. they look up…what, is there an auction happening?? 

Still silence from the others bidders. That’s it, we have the auction in control. We are now the bidder holding control. The auctioneer can’t drag a bid from anywhere else (and the ‘room fillers’ keep scrolling through their phones), and he says he will need to take instructions from the seller.

The real estate agent scurries back to the seller, and then scurries back to the auctioneer. They confer silently, and intently. 

The auctioneers announces they will exercise their seller’s right to place a vendors bid. 

Vendor bid screen (2)… The bid is $920,000

It’s not unusual to have a vendor bid, but to us it seems strange to do this so quickly into the auction. This tells us they know there are no other serious bidders in the room. Without any competition, they are going to have to work hard to create an artificial sense of competition. 

Mitch and I confer over the phone. 

We up the bid…..

….$925,000.

This is well under the pre-auction offer we made, which was rejected, and well under the price we expected would buy the property. 

Not what the Auctioneer wants…he wants us to up the bid to $950,000.

The auctioneer works the other bidders hard….pressure to have them engage…. he has the desire to create doubt and fear of loss…..hoping they will bid, or we will bid against ourselves. 

Silence from them…..and from us. Our bid stands…..$925,000.keep-calm-and-keep-your-bid-2.jpg

The auctioneer addresses me directly, trying to encourage me to increase the bid. He tells me there is ‘more work to do’ to get to a price that will purchase the property. I respectfully decline his offer. Our bid stands…and I point out that there is work to be done on the property. We are firmly in control of this auction. 

More attempts to get other bidders involved, but it’s clear that ‘Opening bidder’ is out (he clearly wanted a bargain basement price) and ‘Hostage bidder’ was never really in the game. 

It’s a stand off. 

The real estate agent approaches me, with Mitch on the phone. He tries to get us to up the bid, and tells us that the seller rejected higher pre-auction offers and these may still be around. We noted that they aren’t here now!! The seller rejected offers and took the risk to come to auction.

The market has spoken.

The bid is $925,000.

Beside, if it’s handed in, they need to negotiate with us first. 

We stand firm…..our bid stands…..

The property has not reached reserve….. it is not on the market…..and yes the market has spoken….

The seller must have had expectations of high $900’s… maybe $980,000 to $1,000,000. Perhaps in this case their gamble in rejecting pre-auction offers hasn’t paid off.

We wait for the auctioneer to call the auction to a close….once…. twice…..three times…..

The property is passed in and the post-auction negotiation process gets underway….

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