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Is every bid at auction good?

12 January 2017

When selling a property at auction achieving the highest price is the goal of the seller and auctioneer. However, this doesn’t mean you should accept every bid.

Director of Cooley Auctions and REINSW Board Member, Damien Cooley, explains that not every bid at auction is a good bid, and reveals how he handled a situation when he had to turn down a bidder.

He recently hosted an auction for a block of units in Sydney where there were several owners involved in the sale who agreed on a 5% deposit.

However just before the auction started a potential buyer arrived who said they could only pay a $300,000 deposit, which was much less than the 5%.

The owners were dubious that she had enough money to complete the sale and said they did not want to sell to her. 

Damien explains: “Halfway through the auction, a potential buyer held up a card to bid and I had to explain that we could not accept a bid from her, and she asked why.

“I explained that we had already spoken about this prior to the auction, but she kept saying this is a public auction and I have to accept her bid.”

The property ended up being passed in after a vendor bid of $8 million. After the auction this same potential buyer made an offer of $8.5 million. 

However, the owners said they were not sure she would settle, but would consider it if she could provide a 5% bank cheque deposit with settlement terms.

One of the other bidders made an offer of $8.1 million and the owners agreed to sell it to them even when the potential buyer counter-offered with a bid of $9 million and 10% deposit.

Damien states that it was a difficult situation to handle.

“The situation ended up going on for two hours and it was a really challenging scenario. The public were confused because they didn’t know why I wouldn’t accept a bid, but we often have information that no one else does.”