We went to the auction today for this house. This is the first house we actually saw sell at auction - only the second auction we've been to. No-one even bidded at the previous auction. The opening bid today was for $750,000 and that bidder never bidded again. I wonder if they were a friend of the owner just trying to get the bidding started? The price rose to $850k, which was my estimate of what the house would sell for and seemed to stop. One of the three agents at the auction then went inside the house to talk with the owner on the phone. When she came back she said "it's on the market", which apparently means that $850k would be an acceptable offer. I would have thought there simply was a reserve price up front that the owner had given to the agent. But after this the bidder who had bid $850k and a young couple started bidding again, sometimes in increments of $1,000 until eventually $870k was reached and the young couple gave up. There was a round of applause after the auctioneer said "Going, going, gone" and hit a pile of paperwork he was holding with his hammer.
Snork Maiden asked me whether I'd be willing to pay $870k for this house when my estimate was $850k (I know all these numbers will sound crazy to many of you in other parts of the world...). I said the best way to think of it really was thinking how much extra your mortgage payment would be for each $10k. For a 30 year mortgage that is currently $63 a month. So the extra $20k would cost $126 a month. Snork Maiden didn't think that was much. I feel that that is quite a bit.