"The property will be sold on auction day."
Now, the interesting thing about this phrase, is that we believed it meant exactly what it sounds like - that there'd be an auction, and at the end of it someone who wasn't the vendor would walk away owning a brand new property, regardless of how attractive the bids were to the vendor. So we made some financial decisions based on this advice, which included purchasing a deposit bond so that we could pay for a property if we won. See, the property was a bit beyond our purchasing power, but if it was definatley going to sell then there was a chance that we might win. People mightn't turn up, and the market is pretty flat...
So, we went to the auction. There were three properties from the same vendor, and we'd decided we were going to bid on two of them - if we missed the first, we'd bid on the second. The property we wanted most was the first, which was convenient for us.
So they opened the bidding, and Rachel (who was handling the bidding, while I handled keeping our little boy happy) put in a bid of $180,000. People seemed rather shocked, but once the real estate types settled down their overemphasised disbelief, the auctioneer began asking for increases. There were none. Not-a-one. Going once, going twice... and... The auctioneer placed a bid on behalf of the vendor of $270,000.
Well, we were a bit stunned, but not overly worried. Rachel offered to raise our bid to $220,000 which wasn't quite the correct thing to do, but I think it was probably the best option at that point. Anyway, we got to the "going once, going twice" bit again, and then the property was passed-in for negotiation at $270,000. We went out and spoke to the real estate agent who spoke to the vendor on our behalf (I think I should mention at this point, it just so happened the vendor was the manager of the real estate agency running the auctions...). As it turns out, he wouldn't sell it to us at $220,000. He said that $220,000 wouldn't buy a property in that suburb. Apparently, he didn't intend to sell on auction day. He intended to sell if he got enough money - which to me seems no different from any other auction, and as such shouldn't be misrepresented, as it was, as a guarenteed sale on the day.
Now, I have to say, I feel rather misled. We knew we couldn't afford to buy these properties outright with the current expectations of the average seller in the current market. At the moment, there's a reasonable gap between what buyers are prepared/able to pay and what sellers are expecting to get. They still want the inflated prices they could get 12-24 months ago. We know this. However, I figured that based on the "properties will sell on auction day" line we kept on getting fed, that we might actually have a real chance. Well - I was lied to. We were told categorically that these properties would be sold - and yet they only actually sold one of the three properties. Actually, of all 5 properties that went to auction today, they only sold one of them AND they sold it below the vendor's bid. This tells me something - that sellers are expecting too much for their properties. But I already knew that really. The problem I have is not that we didn't walk away with a house. It's that we made the highest non-vendor bid on a property that we were told was a guarenteed sale on auction day - and yet the property wasn't sold to us.
So what do we do? Start looking again. I feel somewhat bitter, but there's nothing to be done. We just have to start over I guess... I think the most important thing I've learned is that the next time a real estate agent tells me a piece of information that I'm going to base my decisions on, my line will be:
"Really? Can I have that in writing?"