Auctions appear to be very popular in Australia - for selling anything on ebay as well as for properties. When a house or land is for sale, I often see sign boards set up outside its front yard, advertising whether its 'For Sale' or 'Auction'. More often, the better properties will go for auctions as the owners hope to fetch a better price. The auction date and time is always stated and it is usually on held on Saturdays, around 12noon to 1pm.
The way the property sector here works is very different from Singapore's. Unlike Singapore where property agents will accompany you for viewings anytime at your convenience, even evenings and weekends, here you can't. There are fixed timings for viewings (or inspections, as they call it). Better still, the time range for the open house can be around 15mins only, so you better be on time.
There was a piece of vacant land in our suburb, 720sqm big, located just opposite a peaceful lake and home to many ducks, swans and birds. It was the only piece of land along that stretch that hasn't been built on. Last Saturday, it went on auction at 1pm. Hubby had called to enquire about the reserve price but of course, the agents wouldn't reveal.
I've always wondered what an auction is like. So even though Hubby was not around, I brought the kids out for a walk along the lake around 12 plus and hung around to see the auction. Though we were quite interested in the locality of the land, Hubby had briefed me already not to raise my hand, unless the price is so so so low.
Judging from the turnout, I doubt it will be so. Despite the economic gloom and bad financial news all around, I'm quite surprised to see at least 20 interested groups turning up. Wow, people here do take auctions seriously. Everyone stood around the area, opposite the street facing the land, talking to their friends or family. Most were dressed casually since it was a hot day. The agents were clearly identified by their shirts and ties, but I couldn't quite determine who the owners were until much later.
When the auction started slightly past 1pm, everyone gathered around, just along the pavement outside the land. The agent first read through a whole long paragraph about the terms and conditions and the legal liabilities of the auction process. In between making sure the kids are safely waiting inside the hot car, I heard that the successful bidder will have to pay a reasonable amount of deposit immediately if he got the deal. Well, that person cannot be me then, since I've not bought any extra cash with me.....haha.
The auction formally started with the agent asking for a starting price. Any price? Someone said, "$80,000" but the agent turned it down, saying it's too low. He asked for around $200,000 and someone offered $180,000. Then he asked for the next bid at $10,000 increments. Slowly the price inched up. It turned out that, despite the turnout, there were only a few serious bidders. The rest, like me, probably gave up when the price crossed their treshold. When $10,000 increments became not possible, the agent accepted bids of $5,000 increment, then $2,500, finally even $1,000 increments were fine. I noticed that the 3 very serious bidders were of Asian origins.
The final offer was $271,000 but there's no sale. The agents convened with the owners to discuss and finally came back to say that the price was below the owners' reserve price. Which means that they can refuse to sell to the highest bidder as it hasn't met their minimum price. They announced that they will next deal with this highest bidder exclusively and she (a young lady in yellow t-shirt and denim shorts) will have 'first right of refusal', whatever that means.
I left as soon as I hear this announcement as the boys were already steaming inside the car. Looks like no deal. The owner obviously hoped to reap more profits but buyers are not too willing to pay too much in the light of current situation.
On Monday, I was surprised to receive a call from the agent. He was calling to see if we're still interested in the land. He claimed someone came later with a higher offer of$277K. The owners' initial hope was for $300K but now they will let go if it goes to $280K. Not sure if he's calling everyone and it's a marketing tactic but I told the agent that's price is not within the price range, thanks.
We are very hopeful that property prices in Melbourne will continue to fall further in the days to come. Though it was an ideal location with a view to die for, we have decided to exercise patience in hope of securing the best deal for this long term investment.
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