The Macgregor auction

The Bond Certificate had arrived in the mail the day before.

We were both up bright and early. This was the property we couldn’t bid on because we didn’t get the deposit for our Warrandyte property. But we did bid at the auction. Not because the agent selling this property was going to do anything special for us, like make the sale of our Warrandyte property a condition of purchase. A last reassuring phone call to our agent in Melbourne returned the message that he had good faith in the honesty of our buyer, and the fact that the contract had been signed; despite the fact we were let down rather badly in the deposit part of the deal.

We had arrived early, and were one of the first on the property. It gave us time to wander around the house and yard. I found more things wrong with this property as we were walking around. There were some nasty holes and other damages, and a major structural beam was very badly warped. It looked unsightly even if it happened to be sound, but how do you know, and I don't recall it being mentioned in the building report. There was a general roughness about the place, particularly in the kitchen. The noise from the roadway was also much louder than expected. No doubt from the increased Saturday morning traffic that I hadn’t noticed during the week.

We registered to bid, and went outside to wait. We lingered in the courtyard between the two wings of the building, eventually sitting on the grass in a corner of the garden. I think our sitting on the ground might have confused the auctioneer’s assistants; they like to badger bidders before and during the auction. It’s harassment. We were immune from that, as they probably didn't want to scuff their shoes or crease their suits by bending down to talk to us.

S wanted to bid for the place. I suggested $375,000 be our maximum offer. I found out after the auction that S had $380,000 as her guide as a maximum bid. I also suggested she not open the bidding, but if she did, suggested opening at $300,000. I took a note of the bidding, and this is how it went:

S: $330
other person: $340
S: $350
other person: $355
S: $360
other person: $365
S: $366
other person: $367
S: $368
other person: $369
S: $370
other person: $371
S: $372
other person: $373
S: $374
other person: $375
S: $376
other person: $377
S: $378
other person: $380
S: $381
other person: $382
S: $383
other person: $384
S: $385
other person: $385 and a half
S: $386
other person: $386 and a half

The auctioneer called for more bids, but we were done. So that was it. The other guy got it for $386,500.

The final bid seemed much too high. S crossed the yard to congratulate the guy and shook his hand. He said, “Sorry.” Afterwards, we were both wondering if he would be feeling sorrier for himself than for us. S thought she had gone too high herself, and was carried away by the excitement of it.

S was wondering if the guy didn’t want to lose to a woman (S was the only other bidder). I had been wondering if he was showing off in front of his son. We both felt happy to have lost it at that price, and were wondering if it wasn’t such a bad thing that we’d failed to take the winning bid. There was a lot wrong with the place and the bidding did go rather high. I feel so glad he put in that last bid. Mind you, if he hadn’t shown up we might have got it for a lot less, as we would (likely) have been the only bidder. So we spent the rest of the day looking at other properties. But in the mean time we took a break in a coffee shop.

With a coffee in front of us, I was flicking through the real estate pages and spotted a property advertised for $340k to $360k. The ad in the newspaper had a very nice photograph of the place. So, I flicked the page around to S and asked what she thought of it. She liked it but thought it looked small. It had a Queensland, on stilts look, to it. S thought it had a bit of a colonial look to it. I rang the real estate agent, and arranged to see the place, which wasn’t as easy as I’d imagined.

The agent said the house had been advertised too early. She said the owners were finishing renovations, and weren’t allowing inspections until the following week. I had explained that S was in Canberra from Melbourne and would only have the weekend here. Anyway, an inspection was arranged. (It must be difficult for an agent to knock back punters.)

I also rang Manuel, another real estate agent who had a property for sale not far from the Macgregor auction. This property had been advertised for $325k. It was a 4br dump with a reasonable sized lounge, but most everything else was on the small side. This property was supposed to have sold last weekend, but there was trouble with finance, and the deal fell through. It was put back on the market, but missed getting into the newspaper. Manuel said it sold for the advertised price. He may have been fibbing. There would be a lot of renovating to do with this one, but it had potential. We were considering making an offer.

A problem

S was on her way to Canberra to join me for the auction of the Macgregor property on Saturday. Then I got a surprise telephone call from her. She explained that she had barely got on the road to come here, when her phone rings. Our real estate agent was on the phone to her. He had a call from Melody, the person who wanted to buy our house. There was a problem.

The deposit our buyer had committed to pay today won’t be paid. This buyer was the person our real estate agent described a dream buyer. I presume he’d used that description of her because she had told him she had the money in the bank from the sale of a property in England. If that was what she said, it was a lie. Whatever it was she said had misled him. What she should have said was that she was in the process of selling a property in England, and would have funds shortly. It turned out she had made a mistake in the settlement date. The consequence of this was that the funds transfer was not going to take place on the date she had expected.

We had $1000 in part deposit, a signature on a contract, but as far as we were concerned she was a punter who could walk away from the deal if the mood struck her. Payment of her deposit was the basis by which we would be able to bid at the auction. This new situation presented a dilemma: do we have a buyer for our house or not? Do we have a deposit or not? We may have a buyer; we certainly don’t have a worthwhile deposit.

So, does S continue to drive to Canberra or not. Will it be a worthwhile trip? A few days earlier it seemed as though the sale of our property was a done deal. After this news we are uncertain as to whether a sale has taken place, might take place, or will not take place.

It seems that the settlement day of her house in England was not the day she thought, but turned out to be late in the following week. There appeared to be some sort of trouble in not allowing the tenants that were renting her UK house sufficient time to quit. Consequently, the settlement date was put back. It seems that her solicitor may have provided poor advice.

According to our real estate agent, our buyer was very apologetic and embarrassed over the issue. Not too embarrassed as to organise a personal loan to cover our deposit, not sufficiently apologetic to fund her UK tenants a week’s accommodation somewhere else. When I bought the house in Warrandyte, it was purchased prior to selling our existing property, but that’s another story I’ve told before, I took out a personal loan to cover the deposit. When you buy a property, you don’t buy it without financial backing, you don’t buy in the hope that you might come into some money, and you don’t lie about these things. This put us in a terribly nasty situation.

I suspect she may well complete the sale, but until the full deposit has been paid, we can’t buy anything with confidence. All she has put up is $1000, and if she wanted could back out of the deal. And because of this we may miss out on the house in Macgregor. Our real estate agent suggested we speak to the Canberra agent, explaining the situation, and depending upon the interest in the property we may be able to get it conditionally on the sale of our property.

Both us felt winded, betrayed, and angry. Anyway, it will be super to have S here.

A nibble on the line

Spotted a property in Calwell, south of Canberra. It is a good sized house with four bedrooms on a relatively small block, but it did have some views of the distant hills. It had an amazingly large kitchen with a huge bench surface and great kitchen storage. S liked the size of the kitchen when spotted on the web. It must have had about six metres of bench space down one side. Though, the rooms seemed on the smallish side. I got the building report. It has villaboard, like the Bonython place we liked a few months ago. We may need to put up with asbestos. Villaboard is asbestos.

I also came across a property at Macgregor that caught my eye. It was advertised for auction and the agent thought it would go for between $330 - $400k. This was an older house and not as well cared for as the previous one, but this is a house with style. It had a very large lounge and four bedrooms on separate wings; three on one wing and the main and ensuite on the other wing. The design left an area between the two wings that might be large enough for a small pool or secluded garden. There was little in the way of views from this house, but definitely a house with a difference. Some of the doors and walls had been knocked about, and the kitchen looked like it needed to be ripped out and started again. But for all that, there was something about the place that clicked. The trouble in favouring unusual properties is that they may be more difficult to sell.

In Melbourne, S came home after an inspection, and found a strange car parked in her spot. It looks like someone was testing the drive. We did this before we bought the place all those years ago. In fact, there was no way I was going to buy the property until I tested the driveway. I actually wondered if the car could make it up, as the grade was so steep. Of course it did, but the driveway gave troubles in winter as on the steeper sections the car would loose traction when it was wet. So, someone else is going through the same thought processes. This is good!

According to our agent, there are two punters nibbling at the bait: a mother and daughter pair, and another interested party operating through an agent-friend. Eventually, our agent phoned to say they were offering $345k. Apparently, he said, we had earlier knocked back an offer that was below $350k, which wasn’t true. The agent-fiend would probably suspect this to be a lie. It’s a game this negotiation. By their previous experience, the mother-daughter won’t buy as they’ve been looking in the area for 5 years. Russell says the others are dream buyers, with the money in the bank. If they raise their offer to $355k well take it. He’s concerned about interest rates restricting the market. Our advertising bill is $5,000, so far.

Auctions

Canberra seems to have a lot of property auctions. Personally, I don’t like auctions. I think they are dodgy at the best of times. My experience noted in an earlier post is an indication of that. From what I’ve spotted in the newspaper it appears as though Hooker has more property auctions than any other real estate agent.

I’ve been to a few auctions in my time and the auctions vary from one industry to the next. The government occasionally auctions of its disused equipment. There may be some bargains to be had there. I’ve bought quite a few motor vehicles at auction. Some were lemons, but then I got some beauties too. I’ve been to diseased estate auctions and factory auctions following bankruptcies. They all have a different flavour, and attract different clientele, and the mood varies between each of them. Some are exciting to attend but others are so boring. The first rule of auction: fix your limit and be prepared to walk away empty handed.

In my experience, the biggest auctioneering cheats were at car auctions. I was at one many years ago and I badly wanted a particular car. I had in mind just how much I wanted to pay for it, and bidding was well below that mark. I was in the race. What I didn’t know was that the auctioneer no doubt had a friend in the crowd or someone who had passed a bribe prior to the sale which influenced how events unfolded during the bidding. The bidding was in relatively low dollars, so I began to push myself forward through the crowd. Just on the first call I spoke up with what I thought was a clear “yes” to indicate my interest. I was on the front row when the auctioneer called for bids a second time. I had my arm above my head and called out “yes” again. How could I not have been heard? On the third call I was waving my arm around madly and I yelled at the top of my voice, only to hear the auctioneer call the sale at the original price to the other guy. I confronted the auctioneer, who claimed he didn’t see or hear me. The auctioneer had no trouble spotting me later in the day when he sold me another that wasn’t a patch on the first. Second rule of auction: get noticed early, and the eyes of the auctioneer will return to you. On this occasion I think the auctioneer was corrupt. How can anyone not notice anyone dancing around and yelling in front of your face? I hope he was embarrassed by his action.

I have heard that some auctions, where few people attend; particularly where specialised equipment is being sold, that interested buyers get together prior to the sale. There is generally a viewing period prior to the auction. If the items for sale don’t attract much or any interest, and if you happen to know the people who are interested in the sale, and if you happen to mention how much each item might be worth to you, and after some discussion you can work out ahead of the auction just how badly each of you want particular items, you might be inclined, through an arrangement with those other bidders, to hold off in bidding for those items, and so let your friends have those items at a very low price. This favour only works when they reciprocate and let your minium bid be the winning bid for an item you are particularly interested in buying. The auctioneer may well see what’s happening, but what can they do? If they are selling the items on behalf of a company and there is no reserve you have got some bargains to take home. But sometimes the auctioneer has an interest in the property and may apply a reserve to stop this tactic.

I had a house that was auctioned in Tasmania. It didn’t sell at the auction. I stood and witnessed the auction. That was a scary experience. The auction was held inside the house, so we stood at the side and watched. There were about a dozen people, the auctioneer and assistant. I was almost shaking in anticipation, and can understand why the owners tend to wait in another room. It’s nerve-wracking. I was sure the house was going to sell by the way the auction was progressing. The auctioneer was going furiously, once the auction started. The bidding was reasonably fast to and fro between the different bidders. And then it was passed in. I was confused when the auctioneer told me there was only one bidder. The other bidders were plants by the auctioneer who were pushing the bidding up. I couldn’t spot the fake bidders from the real ones. I had no idea this was happening, didn’t know it was going to happen. It was a beautiful con job that failed to pull off anything.

A most unusual auction

I had a look at Queanbeyan. There seems to be an older part in addition to some newer areas. Some of it looks really ordinary looking, or is Canberra turning me into a snob. Very close by were some spectacular spots in Dodsworth and Ridgeway. Million dollar properties some of them, no doubt. I went to some open inspections in Jerrabomberra. What a name for a suburb. Large houses with prices to match. Some of them nearly take your breath away in the way they have been built and fitted out. I called in at an auction that happened to be about to start. I was first there, and had a chat to one of the agents.

On the way through the door I mentioned that I’d be a spectator only, and asked the price that the property was expected to bring. “Mid three hundreds,” she said. It was a very nice place, enhanced by the modern furnishings, if not a bit cramped inside, and the building almost filling the block completely. Anyway, while waiting for the auction to start, I began chatting with a couple of people outside, and mentioned the morsel of information I got from the agent. I was unaware at the time that this particular couple would buy the property. It was one of the most unusual auctions I’ve ever witnessed.

The auction began in the usual way with the auctioneer running through various attributes of the property and as far as I could tell seemed just another ordinary property auction. It’s the events which followed that surprised me. There were about three other agents on site in addition to the auctioneer, and they, along with a small group of perhaps ten or so spectators gathered on the small patch of lawn to the side of the house. There was only one interested buyer, as it turned out. Or rather, there was only one individual who was vocal at the auction. No one else showed any interest in bidding.

The bidding commenced at $300,000 with this chap calling out his bid. There were no subsequent raises in the auction despite the auctioneer’s usual banter of talking up the property. It appeared that this person had turned up to the auction and had no opposition. To me this is an ideal situation: it keeps the price low. And if the property gets passed in at the end of the auction, the highest bidder generally has first rights on negotiating a price, in private. Which also, is an ideal situation for a buyer. It has been known for properties to fail to sell at auction and subsequently sell at a lower price. The reverse also occurs.

So, here we are all gathered at this auction and there is only one bid, and that bid is for $300,000. One of the sales team approaches the bidder and speaks to him. I’m a little too far away from them and I don’t hear everything that was said, but I did manage to catch a comment by the sales person along the lines of, “…so you will be willing to raise your offer by $30,000.” This whole process took about three maybe four minutes; which is a lot of time to be standing around in relative silence. I thought this was an auction and not some badger-the-punter session.

My first reaction was wondering what this sales person was doing speaking to this guy. I’d feel inclined to tell them to get lost. My second thought was over the word “offer.” This guy didn’t make an offer on the house; he made a bid at an auction. Perhaps I’m splitting hairs, but it did seem mighty strange.

Anyway, this sales guy goes back to the auctioneer and whispers in his ear, to which the auctioneer immediately addresses those assembled, but to the bidder in particular. The auctioneer immediately asks to hear the new amount as a bid. And sure enough, like the little sheep he was, he responded with, “$330,000.”

This guy had just bid against himself. This was stupid, was my first reaction. This was outrageous of the agents to push this guy like this. Of course, the property may in fact have been worth a whole heap more than this amount. So, perhaps bidding against himself was no great loss. On the other hand he has just committed himself to another thirty thousand that perhaps he may not have had to put up. This guy doesn’t know the sellers situation. Perhaps the seller was in urgent need to sell; perhaps the property had to be sold on that day to get out of some financial trouble. We don’t know that possibly the seller had instructed the auctioneer to sell it any price, just get rid of it.

Having just bid against himself, the same salesperson approached the bidder again. Another prolonged discussion took place. Further delays as sales folk disappears inside the house. Possibly the owner was inside and they were seeking instructions from the owner. They come out for more discussions with the bidder. They troop back inside the house again. This would be funny had everything been captured on video and sped up like an old Keystone Cops silent movie.

Then finally they emerge and the figure $363,000 is announced by the auctioneer. The bidder acknowledges it. Then as quick as a flash, as though allowing no time to retract the bid, a mighty fast, “first call,” and without pause for a breath, “second call,” and immediately, “third call, sold,” exploded from the auctioneer’s mouth. It was all over

Unusual practice at best, more like a con job to me.

Real estate hunting

One of the difficulties in coming to grips with a new city is getting to know where the various suburbs are located, and their relative position to one another. In one of my early scans of the real estate section of the newspaper I spotted a house that was very reasonably priced, and generally sounded quite good. It was a definite contender, or at least it was until I spotted it on a map. My failing was that I didn’t realise that Bredbo was a small township about 80km south of Canberra and not actually a Canberra suburb. Any local would have known this.

My Saturday mornings developed into a routine. With my lack of experience of the Canberra layout here’s what I found worked well in making a few property visit open inspections. I got up early and grabbed a copy of the Canberra Times, which has an excellent pull out real estate section, and with a notepad and street directory in hand spread everything out on a tabletop, usually with some fruit toast and coffee to help get me through.

1. Mark the properties that you clearly want to visit by reading the ads. Isn’t that what you do anyway.
2. On a page of the notepad, make very brief notes of the advertised properties, and be sure to include the address, inspection open and close times, and page number that you saw the ad. (you can seldom find the ad after you have closed the paper, and you usually only want it when you are in a hurry.)
3. Number each property on your pad sequentially.
4. Look up the street directory of each one, noting on your pad the map number and its grid coordinates. This saves you doing it later when you don’t have time and are a bit flustered. Doing this now makes the day much more pleasant.
5. Now comes the mildly artistic part. Street directories usually have an index page displaying the locations of all the individual map pages. This index map is essential for getting a bearing on where the properties are in relation to each other. Find that page.
6. On another page of your notepad, sketch an outline of the area you want to search for properties and mark the map numbers on the page just as it is on the index map of your street directory. This takes 30 seconds. If you can’t do it within a minute you are spending too much time.
7. Now, refer back to your first page of notes and mark on your sketch index map on your second page of your notepad where each property is located. Don’t write much. The property number you used and the inspection times may be sufficient. Try to do this as near as you can to being accurate within each map, but it doesn’t matter a whole heap, you just need approximates.
8. When you have transferred your brief notes to the even briefer notes on the sketch map, sit back and have bite of your toast, sip your coffee, and consider what you’ve got.
9. Study the open times and their locations that you’ve got on your sketch map, and work out a sequence of visiting them. Doing this will prevent you from doing too much backtracking, keep your petrol costs down, and you might even see more properties in the one day.
10. When you’ve got a sequence worked out you might write it down somewhere because you’ll forget it otherwise. You might even like to draw arrows all over your sketch map.

This is just the sort of project that some whiz kid needs to develop on a computer to make the job simpler for the punters, but the method I’ve outlined works for me.

You could just scan the newspaper and if you spot something interesting just go and look. There’s nothing wrong with that, but if you are like me and want to see as much as possible you’ll need to get a bit more efficient. The last thing you want is to be doing is wasting time looking for an address with only a few minutes to get to a property, or having to drive half way across town when you have only just been there an hour ago. Anyway, enough of this.

I went to another auction, this time in Evatt. It sold for $365,000 at the auction. Its great to see an auction go to the end and see it sold, rather than being passed in. The house was on a small block of land. It had a small lounge and dining room. It also had a small kitchen and family room. The bedrooms were a reasonable size. It did have a nice bathroom, but no bath. That seems like a contradiction in terms to me. There was a good deal of decking outside. It had a garage designed for a mini because part of it was used as a room! It was a well kept property but was just a very ordinary place, and small at that. $365,000 - house prices seem so inflated in Canberra, for what you get.

I had a look at Duffy and neighbouring suburbs. The occasional vacant block where houses used to be can still be spotted. A result of the bushfire, of course. It’s sad to see garden remnants, retaining walls, garden paths and steps at the front of the empty block that don’t go anywhere. The house was gone, just traces in the dirt where the foundations used to be. Though, it’s interesting to see the number of new houses in the area. And not just ordinary looking places either, but large, luxurious houses. I gather that some people won as a result of the fire, and by the look of some of those new houses did very well indeed.

I discovered the Woden shopping centre to the south of Canberra. Now there’s an unusual name for a place: Woden. I can’t help but wonder if the individual who coined the name had a speech impediment. I laugh to myself whenever I hear someone refer to it: “I wink I’ll wop wound to Woden wopping wentre to wet a woo wings.”

Auction

I went to a couple of house auctions, only one of which sold. I’m beginning to get around Canberra and feel quite comfortable in getting from one place to the next; never without the street directory of course. I came across Scullin and found it to be a very average looking suburb, which might mean the prices are average. That may not be such a bad thing. There was an auction so I called in to watch what happened. There was only one bidder at the auction and a lot of spectators. This individual was persuaded to open the bidding at $300,000 and with no other action the auctioneer placed a vendor’s bid at $350,000. That’s a staggering jump. Everyone was quiet and the property was passed in. The house had a small lounge room, a small main bedroom with ensuite. Though, the other bedrooms seemed larger than average. This house had a very small yard and there was a lot of work to do to the place. It was rough. I thought the opening bid would have been a fair price. Perhaps I knew less about the location that I thought, and Canberra property prices gave me a shock.

The next house was auctioned in a nearby well to do suburb. It was near the top of a rise with views to Mt Stromlo. A huge crowed of people were present when I arrived. It was a 4 bedroom house on a very large block with a neat but very plain garden. It had a lounge room that was smaller than my place in Melbourne, but 4 very nice sized bedrooms that were accessed from a central passage. It was a simple design but the elegant furnishings made it seem to be a very appealing property. Unfortunately, the extension that had been added looked like a tack on; possibly a veranda had been enclosed. The auction started at $500,000 with $25,000 rises, slowing later, and selling for $775,000. It went well above the reserve. Possibly someone was trying to buy into the street rather than the property. The price didn’t seem worth it. Perhaps that’s just Canberra. Ouch!