Notes from the Sale's Manager's Desk.

Recently, I happened upon a television programme which showed a well known Eastern suburbs agency conducting their auction night.  It was held in probably a local hotel and one of some quality with its shining lights and glossy, elegant decoration, and the agents, along with the Auctioneer, were all dressed in evening attire.  The section I saw of this programme dealt with the auction of a particular property, a terrace home in Paddington.  

What had me entranced was the manner of dress and elegance of the venue which made one believe a special event of style and distinction was in progress.  But the behaviour was something else entirely.  The agent looking after the vendors had a full beard, something I’ve read is not a good idea if a salesperson wishes for the clients to see him as a person of integrity.  The vendors were a couple who were around early to mid thirties with a small child.  Their anxiety level was visible and almost palpable.  The auction commenced and fairly soon it became apparent that there were three or four buyers for this property.  The auction bidding began in the four hundred thousands and ground to a halt at $492,000.  Then the really interesting stuff happened.  Our bearded agent, arms around the vendors and approached from behind, told this couple that if they ‘put the house on the market’ it would encourage the other buyers!!  The husband of this couple said ‘no’ and that he wanted the reserve set to remain and that the figure must begin with a five.  It was then disclosed to the viewer that the reserve was $550,000.  The agent then returned to discuss this with the buyers in the room. (While the viewer could hear what was said to the buyers of course, the vendor could not.)  Only one of the buyers for this property in the room were in a position to make a bid that began with a five and so made their bid at $500,000.  The agent then went back to the vendor and advised him to now ‘put the house on the market’ to encourage the other buyers to make further bids, telling them that he had done everything possible for them to get the best price and if they didn’t sell now they would lose these buyers.  The house was now on the market.  Not surprisingly the other buyers couldn’t increase their bids so there were no further bids but now that the house was on the market, it would be sold.  With only one bidder at $500,000 the home promptly, and I mean very promptly, sold for $500,000.  The vendor wife buried her face in her hands, the vendor husband sat expressionless in his seat, his face telling everyone to see that he was stunned, speechless at what had just happened.  He stood and announced he was going home.  His wife reminded him that they had some paper work to do and the smiling agent hugged them, pleased with his evening’s work.  As the couple left the room, the wife said, “you’re not happy are you,” to which he responded, “at least its over!” 

Why do people continue to tolerate this totally unacceptable practice, I ask?  Can they not see that if the bidding is stuck at, in this example, $492,000 then what occurs to me is this.  Firstly, if the reserve was set at $550,000 then the agent told the vendor that their property was ‘worth’ more than this. (Remember, the reserve price is the LOWEST amount the vendor will accept.)  Secondly, the agent has told the buyers that the property will probably sell in the high four hundred thousands, (why else would buyers who cannot continue to bid into the five hundred thousands be there AND bidding??) Thirdly, I have attended numerous auctions out of interest and with friends and family and I have NEVER seen bidders who have been unable to increase their bids during the bidding, re-enter the bidding after the property has been ‘put on the market’.  This is designed to sell the property.  Price is immaterial.  The vendor went away not just unhappy but pretty angry with the whole experience.  And rightly, in my opinion.  They’d, no doubt, paid thousands of dollars in advertising, risked their security having Open for Inspections, subsidised the auction being held in the hired, glamorous hotel, and sold their home for $50,000 less than their reserve price.  Ouch!  The viewer could see from the expressions on their faces that they were feeling like they’d just been caught in an unexpected tornado, and in a way they had!  They’d sold their home in a few, short, stressful minutes for less than the minimum they wanted, and paid handsomely for the privilege!  And what of our simpering bearded agent?  Well, he was happy!  Of course he was.  Why wouldn’t he be!  He’d made the sale and he’ll be paid!  There’s no loss or risk for him.  He’s ready to find the next unsuspecting victim upon whom to perpetrate the Auction juggernaut! 

If you’ve had an Auction experience either good or bad, why not email us about it?