STATIC DISCLAIMER: All the stuff in here is purely my opinions, and they tend to change depending on what mood I'm in. If you're going to get bitter if I say something about you that you don't like, then maybe don't read. I avoid using names as much as possible, and would request that people who know me do the same in their comments. Basically, I often vent my frustrations on here, so if you happen to be someone who frustrates me, expect to read a description of someone very much like you in here!

Sunday, November 27, 2005

UnReal Estate

So I went to an auction today. I've never been to an auction before, and to be honest I didn't think there'd be any chance we could win it. However, the agent for the property we were looking at said, and I quote:
"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?"

4 comments:

Nathan Zamprogno said...

I have dealt with Real Estate agents on several occasions in my life. Firstly, they were the agents for a property we were renting. Later, we bought a house from one. In both cases we were left with a bad taste in our mouths. Perhaps I shouldn't have eaten them.


OK, Seriously now. When people give shoddy service in their chosen field then they've only got themselves to blame when they get a bad reputation, so here's something I hope gets cached in Google for all eternity: "Century 21 in Windsor, NSW? You suck. Your service isn't just third rate, it's third-world rate. Your rude, insolent staff are incapable of organising anything as simple as a locksmith in under six months despite two written requests and innumerable phone calls. I hope anyone thinking of dealing with you on any matter run a mile."

There. That made me feel much better. If the Real Estate agent made a simple assertion such as "This property will be sold today" then they should be held to it. You have grounds to complain, not because there was a Vendor bid, but because of the assertion they made.

More information can be found at these websites:

Real Estate Institute - Auction complaints

Complaint line website

hayley b said...

Wow, I can't believe they said that "it WILL sell" when there was no intention of selling it unless the price was appealing to the vendor. Clearly no one else there thought the property was worth 270,000, otherwise they wouldn't have gotten to the "going once, going twice" bit! They should have sold it to you... you should complain.

btw Nathan, I agree with you on the whole Century 21 Windsor thing.

Joel Baltaks said...

Well, I've never had any direct experience with that real estate agent but I do think that it's shonky to say that it will be sold when that wasn't the intention. I'd complain if I were you.

Justin Warner said...

Just thought an update was prudent:
Firstly, it wasn't Century 21 we were dealing with, although I can see how Nathan's troubles could happen. Real estate appears to be an inherently dishonest profession.
Secondly, we got some advice from the Dept. of Fair Trading that we can't lodge an offical complaint. See, there's a seperation between the vendor and the real estate, and the real estate can advise us of what the vendor has told them, but if the vendor changes their mind, the real estate can't be held accountable. The fact that in this case the vendor is the manager of the real estate is not relevant as far as the official complaint chanels are concerned. He's still a vendor, and has the right to change his mind at the last minute - while the real estate agency has the right to not be held responsible for that.

On a completely different note, Rachel (who did the talking - I would have just been angry) said she really thinks the particular agent we were dealing with felt really bad about the whole situation, and is now trying to swing us a deal. I'll keep you all informed.