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The Masked Tulip

I Went To My First Auction Today (swansea)

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I went to my first auction today - never been to any kind of auction before but I thought I would take a look and see what all the fuss was about... especially after reading an article in my local paper a few nights ago about how Swansea house prices - hah hah - are somehow different to the rest of the planet.

Anyhow, there were numerous houses, flats and building plots - some with planning permission in place, others still seeking it - up for auction.

What a fascinating experience - much cheaper than going to the cinema and a lot more fun.

I was amazed how packed the place became and I think that there must have been 50 people altogether there from singles like myself to couples, numerous retired looking couples and then a mix of builder types and pinstripe suit types.

Nothing - NOTHING - reached its reserve and NOTHING was sold. ( I kept notes ). A lot of the properties had no bids at all and, even for me as an auction newbie, the starting bids seemed very excessive.

There was bit of commercial property that got two bidders interested but it got kind of odd as they both were told they were close to the reserve by the auctioneer... and then the highest bidder suddenly withdrew his bid leaving the second bidder to drop out and very hurriedly leave the room. I thought that was a bit odd.

A 2 bed flat in Swansea marina had a starting bid of 135K but it had no bids and was withdrawn. Interestingly, only this week I saw an advert for similar flats near there for 99K new. (I was amazed to have seen a flat in Swansea Marina advertised new for 99K but I suspect they are going to be a lot cheaper before long IMPO.).

I personally felt that all the starting bids were double what I would have paid for anything at an EAs let alone in auction.

Boy, I feel a crash coming on.

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There was bit of commercial property that got two bidders interested but it got kind of odd as they both were told they were close to the reserve by the auctioneer... and then the highest bidder suddenly withdrew his bid leaving the second bidder to drop out and very hurriedly leave the room. I thought that was a bit odd.

The highest bidder was probably the owner bidding up his own property! :lol:

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The highest bidder was probably the owner bidding up his own property!

The other way round, the highest bidder was genuine and when he pulled out that left the owner bidding for his own property!

No wonder he left the room.

Auctioneers usually takes bids 'off the walls' but in a small room people might see through this.

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Interresting, especially as you would expect to see some repossessions in amongst the lots that banks just don't want to hold onto... clearly this auction is suffering from a bit of a seller/buyer stand off in the same way that is ahppaening at many EA's... although I found it interessting that with published estimates to act as guide to what would be acceptable as a selling price that so many turned up and then made no bids at all.... not really worth their while showing up as they would have known "roughly" what the minimum reserves would have been through experience and the published guide prices.

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What seems to be happening in auctions at the moment is the same as in the traditional EA selling market. Basically sellers are unwilling to drop their reserve price to a realistic level and the bidders are only looking for a real bargain. Hence volumes of sales have collapsed in the main EA selling market and in the case of the auction market (where the bargaining process is compressed into a small window of time through a formal bidding process) the same thing is happening with no sales agreed.

Some auctioneers are getting wise to this through and refusing to list property unless it is put on at a realistic reserve price. It is not in their interest to have bidders turn up time after time to their auction where no seller is really willing to sell at anything close their indicative price.

Unfortunately what we have at the moment is sellers trying auctions as an alternative 'quicker' way of selling in the hope they get a high enough bid so that they can get out of the market much more quickly than using a tradiotional EA. Unfortunately, the prices people are willing to bid at auction are no higher (or perhaps a bit lower) than if they had put it on with an EA.

I agree though going to an auction is fun and I do it occasisonally to get a feel for the market. My observation is that small time developers (i.e one man band builder with a white van) and amateur doing up brigade have exited through lack of finance. Only professional landlords are left really bidding and they are looking for a proper rental yield of 7% gross so unless they are getting a good bargain they are walking away.

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Guest DissipatedYouthIsValuable
What seems to be happening in auctions at the moment is the same as in the traditional EA selling market. Basically sellers are unwilling to drop their reserve price to a realistic level and the bidders are only looking for a real bargain. Hence volumes of sales have collapsed in the main EA selling market and in the case of the auction market (where the bargaining process is compressed into a small window of time through a formal bidding process) the same thing is happening with no sales agreed.

Some auctioneers are getting wise to this through and refusing to list property unless it is put on at a realistic reserve price. It is not in their interest to have bidders turn up time after time to their auction where no seller is really willing to sell at anything close their indicative price.

Unfortunately what we have at the moment is sellers trying auctions as an alternative 'quicker' way of selling in the hope they get a high enough bid so that they can get out of the market much more quickly than using a tradiotional EA. Unfortunately, the prices people are willing to bid at auction are no higher (or perhaps a bit lower) than if they had put it on with an EA.

I agree though going to an auction is fun and I do it occasisonally to get a feel for the market. My observation is that small time developers (i.e one man band builder with a white van) and amateur doing up brigade have exited through lack of finance. Only professional landlords are left really bidding and they are looking for a proper rental yield of 7% gross so unless they are getting a good bargain they are walking away.

Is 7% yield enough in these times? Seems pretty tight margins to me.

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Guest happy?

Does anyone know what auctioneers' fees are? I seem to recall that they take a flat fee plus a % against sale price. If this is the case and things continue as they are I can see them insisting on a much higher flat fee, there's an awful lot of costs involved in running an auction and there must come a point when auctioneers become impatient about subsidising unrealistic reserve prices.

Edited by happy?

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Yes, I learnt one lesson - stand at the back of the room.

I sat down near the front in the third row and all the bidders, bar one, were from behind me so I could not see who was bidding.

With regard to that commercial property the first bidder was bidding from behind me and the second bidder was sat in front of me... I did not twig he was bidding until a woman sat next to me pointed it out to her hubby. Must have all been eye movements or something or something very subtle.

They seemed to get near the reserve price - started off at 175K and very quickly got to 195K - and the auctioneer said several times that they were close to the reserve then, for reasons I don't know, the first bidder at the back of the room bailed. I don't know whether he shook his head or did a runner or what as I did not hear anything said - I didn't know you could retract a bid.

The auctioneer sighed and then asked the bloke in front of me if his bid still stood and the guy simply got up, no idea if he said "no" or shook his head or what, and left the room in a hurry.

Problem was, he left his car keys behind and had to return several minutes later to pick them up off the seat.

There is another auction in Swansea next week and I aim to go to that also. I was a complete virgin to them but obviously you need to go to loads and loads before you would dare bid on anything.

My gut feeling was that everything was double what it was worth at best.

Btw, they read the details out of who was selling each property. Most were local solicitors but a few properties were banks - Lloyds and Barclays being two - so I assumed they were repos???

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Does anyone know what auctioneers' fees are? I seem to recall that they take a flat fee plus a % against sale price. If this is the case and things continue as they are I can see them insisting on a much higher flat fee, there's an awful lot of costs involved in running an auction and there must come a point when auctioneers become impatient about subsidising unrealistic reserve prices.

When I sold my Mum's house last Autumn and was getting EA quotes - I sold it privately btw - several wanted 3% for an auction plus so-called 'marketing costs'. Having a laff!?

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Well done MT, I hope you have caught the bug?

With no repos it sounds like a small auction house?

Were they selling photocopies of searches? If so, how much?

I remember some jaw dropping bargains in Swansea in the early 90s.

Take some small change with you in two years time, so you can pay in full on the day :)

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Well done MT, I hope you have caught the bug?

With no repos it sounds like a small auction house?

Were they selling photocopies of searches? If so, how much?

I remember some jaw dropping bargains in Swansea in the early 90s.

Take some small change with you in two years time, so you can pay in full on the day :)

I think I have caught the bug - just came home and bought a nintendo wii and wii fit from Comet. Or I think I have as my order did not go through several times. Then I ended up on the phone to them ringing up money for them whilst I was kept on hold... and then my online order went through at the third or fourth attempt... and now I have several emails from them saying that there is no order, that there is an order and that someone will ring me in 24 hours about an order! Whaaaaaaaaaaaaaaaaaaaaat!?

I only mention the above because it appears easier to buy a several hundred K house at auction than to order electronic goods from Comet online. :blink:

There might have been repos - banks were mentioned as being the sellers of a few properties.

Apparently they sold 'Legal Packs' prior to the auction for a charge - I have no idea what they were.

When each property came up the auctioneer read a load of stuff about it and mentioned searches with each one and the cost the buyer would have to pay for the searches to the respective solicitors or bank. I think the lowest fee was about £90 and the highest was about £300 and one mentioned all sorts of interest percentage for the cost of bridging loans to the seller if the buyer did not complete by the agreed time. Being Wales, they mentioned things like 'mining searches'.

Yep, give it 18 months and I think you will find the bargains again. Perhaps sooner the way the economy is going tits up.

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Apparently they sold 'Legal Packs' prior to the auction for a charge - I have no idea what they were.

Contains all the searches, energy crap, and any other bits of info about the property.

Edited by OnlyMe

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Thanks for sharing your experience MT…spending time at your local auctions might prove to be more entertaining and certainly less expensive than taking a holiday. :lol:

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Gosh!

Sounds beartastic!

I have a day off tomorrow, are there any auctions on in London?

I only realised this was on because I was on a bus which passed a house with an auction sign outside and today's date as being the auction. So I rang them up, asked them where it was and went along. There seemed to be loads of retired couples there who gave me the impression that it was a bit of fun for them as none looked like hardened bidders - maybe they had been to court in the morning to watch all the trials.

Anyone, did a quick search of EAs in my area and another auction is on next week so I will go along to that.

My gut feeling is that by October there will be lots of properties at the auctions as a result of forced sellers. I am not sure whether EAs will be used to auction them or not?

Anyhow, got some practice in.... cheaper than the Odeon...

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Thanks for sharing your experience MT…spending time at your local auctions might prove to be more entertaining and certainly less expensive than taking a holiday. :lol:

My thoughts - have put a holiday on the back burner now as I want to go during the dark winter months and have bought - or think I have bought - a wii today to have some fun and try the fitness games.

I wish the auctioneers sold popcorn and those hot dogs that are unique to cinemas!

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[quote name='The Masked Tulip' date='Jul 15 2008, 07:51 PM' post='1215385'

I wish the auctioneers sold popcorn and those hot dogs that are unique to cinemas!

You may have, inadvertently, identified a realistic business opportunity here. :P

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[quote name='The Masked Tulip' date='Jul 15 2008, 07:51 PM' post='1215385'

I wish the auctioneers sold popcorn and those hot dogs that are unique to cinemas!

You may have, inadvertently, identified a realistic business opportunity here. :P

Lol :lol: Have you got a link MT?

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  • 399 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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