An expert on property and financial markets warns real estate Nervous Nellies that house prices are on the way up, not down! And how would you like to be an expert on auctions, so if you’re a seller, you pocket the best sum possible but if you’re a buyer, you pay the least possible?
Auction-loving Aussies will be interested to know that this year’s Nobel Prize for Economics went to two US economists from Stanford Uni, Paul Milgrom and Robert Wilson, who’ve worked out how bidders can avoid the so-called “winner’s curse” of over-paying. Better still, they’ve determined how you can be an under-payer at an auction. It gets down to doing your research, including what your rival bidders think represents value.
In a nutshell, the economists think the more the bidders know about each other, the more likely they’ll overpay. The flipside is that if you’re a seller, you don’t want your agent knowing too much, which they can take to the bidders.
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