Why auction theory won two American economists a Nobel Memorial Prize. Think of what happens when you bid for a house at an auction. As a bidder you’re going to behave strategically, based on the available information, in competition with other bidders. You’ll take into consideration what you know about the house, but also what you believe other people know about the house. But what’s the best format for an auction? If you had to...
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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...
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COMPETITION in the cut-throat real estate market is so intense one Gold Coast agent is giving out $1000 incentives for referrals. Andre Sharples, of Professionals John Henderson Real Estate, has given away $10,000 this year — and hopes to give out more. “It gets me business as I’ve got people out there promoting me to get their $1000,” Mr Sharples said. “Listings are very tight and it’s another way to promote yourself. “It doesn’t affect...
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An article by Jennifer Duke “In Victoria underquoting is endemic, rampant, it’s grubby, it’s misleading and deceptive and it’s a fraud on home buyers,” explained Rowe. “Consumer Affairs Victoria lacks the necessary laws and resources to police underquoting. Real estate agents enjoy the luxury of loop holes in the rules to bait home buyers into attending auctions which are outside their budget. This frustrates buyers. Underquoting causes home buyers to waste their time, money and...
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While all property auctioneers, the vast majority of real estate agents and most newspaper property reporters sing the praises and extol the virtues of auctions for buyers and sellers alike, there are a few of us out here in real estate and conveyancing land who have our doubts. Fellow consumer advocate Neil Jenman has long argued that auctions get lower prices. Real estate trainer Gary Pittard recently demonstrated how it is impossible to guarantee the...
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It’s a phenomenon fast becoming known in the property industry as ”GOMO”: Grief Over Missing Out. Prospective buyers who pin their hopes on a dream home and are outbid at auction by competitors are increasingly slumping into a state approaching clinical depression, experts say. “Some people put an enormous emotional investment in a particular place and fall in love with it before they’ve been able to buy it,” said Amanda Gordon, a clinical psychologist and...
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Interesting new research about the emotional drivers behind property purchases cements the undeniable reality that investors are just like everyone else – sometimes susceptible to thoughts that go against their better judgment. “I reckon another $10,000 will get this bad boy across the line,” the agent smiled, smoothing down his slick suit and nudging his Montblanc pen closer towards me. “Just write the new offer amount there and initial it, and I reckon it’ll be...
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Ever wondered why agents underquote? The simple answer is because it works. This may not be a popular view of underquoting and as frustrating as it may be, underquoting is a necessary evil in Melbourne’s auction system. Growth in property prices this year has highlighted the widespread practice of underquoting and the frustration of buyers who miss out when properties sell for much more than the advertised estimate. Ironically, the practice that frustrates buyers is...
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Auction lingo is confusing potential buyers and putting them at a disadvantage, according to one buyers’ agent. Patrick Bright of EPS Property Search says buyers need to recognise the terminology used by auctioneers to understand the auction’s progress. “Like many professions, real estate has its own language and terminology that is often intimidating and confusing to outsiders.” Bright says the terminology is designed to elicit a response from potential buyers, but if they read between...
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Whether we have been advising and representing property sellers or buyers, Mitchells have long warned our clients to be wary of auction sales. Sellers beware! A crusty old real estate agent once remarked that an auction was little more than a device for persuading sellers to drop your reserve price. And buyers beware…particularly of vendor or auctioneer bids! Some time ago our Tim O’Dwyer, wearing his Real Estate Watchdog’s hat, gave this on-line warning to...
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