Auctions

We have included referenced information from 2 different authors on the topic of auctions. Please think carefully before risking your family home.

How Auctions get lower Prices

From Best selling author - Neil Jenman - Real Estate Mistakes and Don't sign anything

Homesellers tempted to auction their homes should remember four words: AUCTIONS GET LOWER PRICES.

Never mind what agents tell you, never mind what you read in the papers, auctions are a financial minefield for consumers.

Despite the booms in many areas, thousands of homesellers are turning their backs on auction and benefiting. But there are still thousands of sellers who don't realise, until it's too late, what happens to them at auction.

They get a LOWER price, that's what happens.

If someone is trying to talk you into selling by auction, then before you sign anything, please read this.

NINE REASONS AUCTIONS
GET LOWER PRICES


1. THE STARTING PRICE
It seems as if the price goes up at auctions. But that's only because it starts LOW. It's like starting the day with a massive hangover and saying that you are going to feel better as the day progresses. That's not a good reason to get drunk every night. Avoid drinking and you avoid the hangover. You start the day in good shape.

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A Well-Orchestrated Scam

by Terry Ryder from the book REAL ESTATE without agents.

I've been saying for years that auctions should be banned. Auctions harm sellers, often creating stress and a poor financial result. Auctions also cheat buyers because agents commonly use false price quotes and dummy bidders to mislead them. The only reason we have auctions at all is because agencies and newspapers benefit so much from them. That is why there is so much emphasis on auctions in the newspaper coverage of the property market.

When the Herald Sun newspaper in Melbourne asked for my views on auctions, I wrote: 'I cannot think of a greater consumer travesty than crunching families on the biggest deal of their lives under the pressure-cooker of an auction, where trickery, deception and secret agendas are the modus operandi of many agents.'

Auctions are bad news for home owners from the moment the agents step through their front door to win the listing. The procedure is this, the agents:

• over-quote the selling price to win the listing;
• recommend auction, Open Houses and bulk advertising to sell the house;
• under-quote in the ads, thereby attracting the wrong market;
• then report to the sellers that the market is talking lower prices;
• use negative feedback from tyre-kickers to condition sellers to a lower price
  
• campaign for a low reserve;
• coerce the sellers into lowering the reserve on the spot during the auction; and
• retain control of the property for another 30, 60 or 90 days if it doesn't sell at auction.

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