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Auctions. Are There Bargains To Be Had, Or Is It All In The Mind?

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A few weeks ago I posted that a flat was going to be auctioned on my estate with a reserve of 125K for two bedroom.

The Auction was held last Thursday and the flat sold for 149K.

I knew a couple of people who attended, one who is a landlord who was after something else, but has himself, up for sale, an identical flat for 140k in the same block.

The auction was well attended, and he believed people were carried away with the bidding, and overpriced themselves.

In my opinion I believe he is right, because by the time the buyer spent 15 grand to improve the property, it comes out more expensive than fully restored flats of the same, that are in the estate agent down the road.

This makes me ask if auctions are a good idea for buyers. I find it difficult to believe there are any more bargains on e-bay because of the size of a nationwide bidding audience.

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That's the trick of an auction and a useful bit of knowledge for the sale of anything:

Get the buyer to make an investment prior to the purchase (the surveyors report & arranging finance etc) on the back of a cheap reserve or a cheap expected auction price, that way the buyers (hopefully a few of them) are committed to the purchase on the day.

They then end up having very little negotiating strength because they have decided they must have the place.

This works for cars as well, if a person drives 200 miles to view a 2nd hand car, they've made an investment in time & money doing it.

Ebay is no different, put something on for 99p and you know there'll be tons of people who decide it's worth much more. But put the same thing on for fair value & you might not even get a bid.

The investment for the Ebay buyer is loads of time spent tracking the item in preparation for the final bids.

I recently sold a CD changer magazine (the bit that holds the CD's) from an old car for £31 including postage. I started it at 99p + £4 for postage. The funny thing is that it originally cost me £6.

Edited by Time to raise the rents.

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  • 302 Brexit, House prices and Summer 2020

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