If you are Australian and reading this then you'll wonder why I am writing about House Auctions but I have to say that I find them an absolutely fascinating way to purchase a house and that is how quite a few houses are sold here. And they are quite a spectacle too.
It is quite a different matter in England. There your house goes on the market..... you have appointments for potential buyers/ viewers - at all times (no fixed day) and then maybe/hopefully an offer. Then negotiations back and forth between you, the estate agent and the buyer and when a price is agreed it goes to solicitors... The legal process goes on and on (and on!) - maybe up to 3 months and at any time in all of this before you sign on the dotted line at the end of it all and contracts are exchanged and completion takes place your buyers can pull out of the whole deal, leaving you back to square 1.!! Here I think it is far better.... Essentially there are two ways....
1. You can have a fixed price for the house and invite offers (a private sale) and not have an auction and then offers are gathered up after several 'open days' (where the house can be viewed by potential buyers en masse) and hopefully an agreement met between buyer and seller on the price. When that is decided 10% deposit is put down by the buyer after which they decide whether the balance is produced in either 30 days or 60 days usually. End of contracts... you have bought your house...Or ...
2. You can go to Auction.. This is by far the most exciting but also nerve wracking for both seller and potential buyers....
Today Mr SE and I attended a house auction near us... (photo above, sorry not brilliant - taken with a phone ) ... You will also see that outside the house there is large board with photos of the interior .... also on the board are the opening times of the house (fixed) and the auction date and time... Usually there have been around 4 open inspections (where again you all look round en masse)... Sometimes there is a guide price, other times not, just an idea of what other sales have been achieved in the area recently.
So today the house was open prior to the auction for one last time and then on the dot at 1.30pm the auction began...
The Estate Agent stands outside the house and addresses the assembled crowd there (hoping that everyone wants to buy it and of course that will push up the price) . Usually people (like us) want to see the spectacle of the whole thing and the auctioneer too, as it is quite an art and today there were lots of people ... So, as I said he addresses the crowd and firstly 'bigs up' the house and the area and the fact that it is close to shopping facilities and the train station (with no mention of course of the train track which runs directly behind the house of course)...
And then he starts... "So ladies and gentlemen, what do you give me to begin - do I have an offer to start on this lovely house... ?" Deathly silence... "Surely you have not all come here today just to watch me? " (seemed like we had!) ... So then he begins and says that he would start at an offer of $875,000 from the vendor (don't know what that meant ... maybe that was the minimum they would accept?) "So, who is going to offer ? - I will go up in $10's (of thosands) if it makes it easier - any offers ladies and gents, any offers?" . "$900,000" shouts a man in a bright white shirt and green tie...... Again, Mr Estate Agent tries to get someone, anyone, to offer more, and keeps asking for more offers... None coming.. So in the end he says, "Selling once, selling twice, etc " and just before he says SOLD then decides he would have to go inside the house and confer with the vendor... !!
So off he goes and then returns outside again and says to the only potential buyer at the time that he was going to ask the crowd again for offers (as the vendor had insisted he did)... Immediately another lady (Blonde and sunglasses) comes into the whole thing and offers $905,000..... Mr Green Tie goes straight back at $915,000..... Blonde sunglasses offers $920,000, Mr Green Tie, $940,000. Sunglasses $945,000. Green Tie (obviously hoping to 'nail it') $960,000 .... Sunglasses shakes her head.... Auctioneer tries to encourage her to make another offer and asks us all if we would like to offer ... "Maybe another $1,000, - could be the best $1,000 you have ever spent in your life, -you know the house is worth it!"...... No more offers... He keeps on trying to get someone to offer and then eventually.... Going once, going twice, going three times... then 'For Luck' (so he says) he repeats the going once, going twice routine (I would have been very cross if I was Mr G.T. at that point) and then FINALLY... SOLD.......!! Green Tie gets the house and Mrs. Green Tie goes "Wheeeey haaaa" or something similar and rushes up from a way back and hugs Mr Green Tie ! (Maybe it was a Valentine gift! Ha! ) And we all clapped! Pure entertainment really.
(Mr Green Tie would then have had to stump up is 10% then and there decide with the vendor whether they would get the rest in either 30 or 60 days.. And that was that ... job done, one sold house.)
Such fun and quite a show.... - for all of us watching... However, I would be feeling quite sick if I had wanted the house or if I was selling it but I have to say I think that overall here it is a far, far better way of selling houses.
Ed.Note : I hasten to add that we only rent here...! Our only house is in UK...... at the moment.