We participated at another auction today and again ended up not buying. Someone bid $850k to open the bidding but then dropped out after that. There were three serious bidders. Most of the time it was just me and a guy whose partner had told the agent at the first showing that if someone made a bid before the auction he should let her know. I went as high as $1,017,500. The other guy bid $1.02 million and then suddenly a third guy behind us jumped in with $1.025 million. The next bid was $1.03 million and then the third guy said $1.04 million and that was the final price. The valuation we got was $950k.
4 comments:
Holy wow, are those considered bargain prices for what you were bidding on? And how do auctions work there? (Here, what I know is that you are buying sight unseen and you have to have funding in hand for the purchase if you win.)
Of course these are Australian Dollars, so that lowers the numbers a little. The valuation we got was $950k (USD 825k). This shouldn't look that high by Bay Area standards? Most good quality freestanding houses (i.e. not townhouses) are put to auction. Only if the auction fails they then put them on the market at a listed price. You can go see the house, just like any regular house on the market. If you win the auction you need to pay 10% of the value on the spot, though usually that is reduced to a 5% first installment. So, there is more at risk if something goes wrong in the process than there is in usual home purchases where the required deposit is smaller.
I am still horrified by Bay Area standards, especially since we don't really make the kind of Bay Area money that pays for these prices so while I suppose it doesn't look high in comparison, it still seems scarily high. :)
It's hard to know when to drop out of such auctions -- although it sold for 9.5% above the valuation you had got, those can easily be +/- 10% as they are based on general age, condition, floor plan and recent similar sales (which are often a lagging indicator in a rising market). And if you really liked to house and location, then the final price being only 2.2% more than your last bid can look relatively insignificant in hindsight.
Oh well, there's always another house around the corner, and Canberra prices aren't rising as much as Sydney at the moment, so you can probably afford to take the time to shop around for a while. Does get tiring after a while - especially if you are doing the recommended ratio of browsing:inspecting:bidding of around 100:10:1.
Post a Comment