Jon:
Hans in Somerville; good morning Hans.
Hans:
Oh good morning, David and Jon. I’ve got a quick question about auctions.
DW:
Yes.
Hans:
When I advertise a property – between 720 and 790 let’s say – they started the auction and nobody is bidding, then the auctioneer says I’m bidding for the vendor, 720. And then another bid of 740 and then the property basically gets passed in. The question is, the reserve price was way above that advertised price. So can they do this?
DW:
Well there’s two parts to the question. The displayed price is based on the estate agent’s estimate of the value of the property. Right? And they are required to give you documentation in relation to comparable sales and other information that justifies how they arrived at that figure.
It doesn’t mean that the vendor has an obligation to sell at any figure within that range.
Hans:
Okay.
DW:
Right. So what you might say is that in the situation you are talking about the agent has been honest in their estimate of the range. But that the vendor has not in a sense played the game. Or has a view that the property is worth substantially more. Thank you, Hans.
Hans:
The other question though is when the property gets passed in and then afterwards you know how they’ll list properties sold and not sold. Then it came up as sold at auction, is that legal?
Jon:
Sometimes that’s just marketing isn’t it, David?
DW:
Well it might have been sold after auction. Somebody might have come up after auction and bought the property.
Jon:
Yes, in the negotiations immediately after the non-falling of the hammer in this case. Alright, Hans?
Hans:
Okay.
DW:
Quite often, Jon, you’ll find that the property is sold in the couple of hours after the auction.
Jon:
Negotiations, yes. Chuck another couple of grand in and it’s yours sort of thing.