Auction sales in May achieved a 69% success rate.
There were 172 sales in the UK, offering 3,467 lots and achieving 2,393 sales.
The numbers were up by 25.8% and the value up by 18.2% compared with May last year.
Auction sales for the first five months of this year have all been an improvement on last year, with the exception of March where both the lots offered and amounts raised were down.
The figures are from the Essential Information Group.
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Comments
Unhappy Chappy: Thanks for your responses.
1. In desperate times there are other ways to solicit higher offers from prospective buyers than to effectively break the law and invent phantom buyers. Like, for example, saying 'No' to the offer on the table. I find that in many cases this little 'trick' works and buyers come up a smidge...
Those who do so should be brought to book accordingly - even if they are, in their eyes, acting in their clients' interests.
2. So you ARE a HPCer - albeit of the mildest form... ;o)
3. Sorry - you kind of lost me with the next bit. What is the difference between private treaty and auction in your opinion, that makes auctions beneficial to potential buyers? Here's the similarities as I see them:
* A property is advertised at a price that (supposedly) encourages one or more prospective buyer to make an offer.
* IF the offer reaches a certain level, it is in the market to be sold.
* It is sold to the highest bidder (or in some instances to the bidder in the best buying position...).
* IF it does not reach a reserve, then it is not sold.
* ADVERTISED price means nothing.
You have no doubt already read below that one (very) willing buyer on this thread has expressed that auctions would not be the platform on which to he would want to buy, and for the very reasons I stated. YOUR views, therefore, will be met with great interest...
4. The 'value' of a property is not necessarily what YOU are prepared to pay for it, of course! Someone else may well be ready, willing and able to pay more...
5. Fees - boy, you want to open a can of wrigglers, don't you? OKAY - here goes - as short as possible but it should really take a novelette! In MY opinion (and I am far from alone in this thought process...) fixed fees mean that an Agent is guaranteed £X REGARDLESS of how well he/she performs. The Agent has no incentive to ask for that extra £1000 (or even £10,000!) that could, if achieved, pay the vendor's entire moving bill! Commission-based fees encourage the Agent to make that extra phone call in order to do what they are employed to do - act in their vendors' best interests.
Now, as a potential(ish...) BUYER, I can see why that doesn't suit you. It's swings and roundabouts, mate - because as a seller you will LOVE the idea of paying an Agent an extra hundred quid, when they negotiate you five grand or so in return! Good investment, I would say...
Trust me - I used to be an Estate Agent! ;o)
Peebee - No worries i cannot multi task either as my g/f often reminds me!
I personally know of estate agents that have produced a phantom offer , hey in desperate times humans do these things.....proving a phantom offer is difficult and does little for buyer even if it can be proved but perhaps this is a point i should not have made on EAT...my apologies I am sure most estate agents are always honest and play by the rules ;0)
I am not a HPC'er I believe such an event will be detrimental to many people however, prices are over priced and 10 years stagflation will bring them somewhere back into line...I believe that is the way we are heading.....although many of the powers that be will want assett price bubble to remain inflated as there own personal fortunes depend on them.
I believe i can value a house without speaking to the agent or owner that last sold it ....after all its value to me is what i am prepared to pay for it....thats why i believe auctions can be a good for potential home owners.
The point i am really interested in regards fixed fees
In your post you said you would not advocate fixed fees I but do not say why....I can only see positives the agent is paid for the work they do at a profit (not as much profit i admit)......vendor gets lower fees when the house sells.....what are the negatives?
ps I see also see volumes of sales picking up next year interest rates have to rise eventulally....the debt issue is huge in the country!
UNhappy Chappy: Apologies for not having responded earlier. Typical bloke - can't multitask... ;o)
SO..... let's have a look at what you said.
To your first post I would reply as follows:
1. Therefore auction results (and therefore auction PRICES are irrelevant in your case, Sir...)
2. Apologies if I have 'mis-categorised' you. For the record (and my curiosity...), what ARE you, if not HPC?
3. Blimey - we almost agree! A 'good' Agent needs the property in the first place, however, to be able to match buyer to it. HOW they get the property is JUST AS important as WHAT they do with it afterwards... (door opens for much debate... ;o) )
4. Yes - but I fervently believe that in the vast majority of cases the result would be to their detriment.
5. An Agent who uses such tactics without GENUINE, substantiable evidence deserves whatever book be thrown at them! It is an offence under the Estate Agents Act, the OEA Code and probably the Kyoto Protocol for good measure for an Estate Agent to fabricate offers in order to solicit increased offers on a property. Got proof? THEN REPORT to Trading Standards or the OEA!
6. If THAT, and the 'phantom offers' malarkey, is your genuine experiences of the workings of Estate Agents, the I respectfully suggest you frequent the WRONG Agents' offices, Sir!
To your next post:
You may disagree with final paragraph - I stand by it. Unfortunately, as I have previously said, you seem to frequent the offices of the WRONG Agents, Sir/Madam/Prefer-not-to-disclose...
I don't advocate 'minimum'/fixed fees at all. As an Agent I did not/would not charge them; as a seller I would/will CERTAINLY NOT pay them! Personal choice - one built from experience - both personal and that of from HUNDREDS of others over the years...
Lastly: 'No' and 'There you are', respectively. Now tell me - why 'Soon to be...'? ;o)
Peebee - I take it your lack of response means I answered your questions sufficiently, care to answer my question in my last post?
Peebee- I agree with large swathes of your last post apart from your last paragraph.
I particularly agree that something is worth what someone will pay for it.....on this matter could i have your thoughts on flat fee agencies as I have never understood why i should pay an agent more for selling a £500K house than and 200K house?
Hey perhaps i should change my nic to = soon to be happy chappy :0)
Sibley's... - I can hardly call you 'mon brave' when you admit that your lacking in the cojones department, now can I? ;o)
Mate - you hit the nail firmly on the thumb. The 'market' comprises of EVERY sale. It just happens that there are some sales which can be relied upon as reflecting it better or worse than what is the 'norm'. I have always taken the view that a 'normal' sale (placed on market with a view to achieving a sale within a period of 8-12 weeks...) is the barometer to work off.
You say "...the majority of EAs on here see nothing wrong with current house prices (being too high) but are quick to decry an undervalued auction sale." Not sure I agree with you - but I know where you're coming from. I think you are somewhat fudging what an Agent THINKS and what an Agent SAYS. As has been said on here many, many times, lower prices would actually suit Agents more than higher. 50% more volume at 20% less value equates to 20% more income, unless I am mistaken. HOWEVER, prices are what prices are - and it is an Agent's responsibility to achieve, on behalf of their client, the best possible price. No egos here; no greed factor on behalf of the Agent - simple legislation. And as long as SOME properties are selling at '£X', then that will be the benchmark that MOST sellers will be aiming to achieve - or better.
'Back in the day', when an Agent, I offered what I firmly believed to be best advice to sellers and buyers alike. I 'valued' a property with the above timescales in mind, and would GENERALLY (...subject of another discussion, mon ami...) not list a property priced otherwise. Because I was therefore confident that the property was priced correctly, I could then confidently offer the property to buyers knowing that they would be buying a property that was 'worth' what they were paying for it. Win:win.
It is ALL down to the old adage that someTHING is worth what someONE will pay for it. Agents walk a fine line in this respect. It has to be said, however, that in order to get it right, you sometimes need to get it wrong in order to establish the location of the goalposts. Pricing it above the line usually benefits no-one - as the seller has to then lower their expectations in order to sell. Pitching it too low is GENERALLY not in a sellers interests (and therefore not in an Agents, as the seller is the client), however may result in multiple offers which in many instances will bridge the void between the low 'valuation' and the property's true 'worth'.
Some, as is clearly highlighted by their stock, walk on the wrong side of the line. Corporate OR Independent - in my experience it can be either - but the indies love to point the finger at their corporate colleagues in industry...
Proves the point - that the ONLY true indicator of a house price is what it (or to a degree, what the one next door/next street etc...) SELLS for - under 'normal' conditions.
And the ONLY way to establish that, is to talk to the person who 'sold' it - the successful Agent...
Peebee -
1. I do not buy at auction because i have not saved enough cash to buy a house outright...im working on it!
2. What makes you think i am part of the HPC brigade....a HPC would create turnover for the estate ........it would also bring a whole series of negatives too!
3. Pee bee i agree a house sells itself the key to a good estate agent is matching the needs of the buyer with one of the properties in the listngs
4. Vendors could easily put a property in front of potential buyer, if they could be bothered. There are many direct marketing opportunities
5. I dissagree that any agent manages a negotiation between the buyer and seller, the agent acts on behalf of of the vendor in most instances. Often using the old line of "the vendor has had another offer nearer the asking price line" In my opinion many negotiations would go better without an agaent in involved!
6. However, I will say that quite often an Estate agent will try and hold a chain together particularly if the whole chain is within there listings!
Unhappy Chappy: If you would, as you state, LOVE to buy at an auction, then why do you not do so?
THEN, you could:
* change your pseudonym to 'Happy Chappy';
* extol the virtues of auction purchase to all on this site and prove me wrong in my statistics; and
* you can then lead all of your HPC buddies to the promised land
In the meantime, Agents will continue to offer advice and service to vendors AND purchasers alike.
You forget something. Agents are paid for RESULTS. Whilst in the main property sells itself (you will find there are many who disagree with me on that...), there still needs human input - firstly in order to actually put the property in front of the buyer, and then to agree terms and manage relations between buyer and seller throughout the duration of the sale process. Good Agents excel in both these regards - and this is backed up by the fact that many property owners return to the Agent they initially bought the property from when it is their turn to sell.
I am fairly certain that IF you were to buy at auction, then you would not go down the same route as a seller, for reasons I have previously given.
Perhaps you would care to comment?
Aha PeeBee, bonjour monsieur.
I'll start by taking the wind out of your sails by saying I agree 100% with what you said regarding auctions (and, no, I don't think I would either have the cajones or wherewithall to buy at auction).
I don't subscribe to the theory that auctions necessarily prove true market value for the reasons that you cite.
Now I may be proven wrong here but the majority of EAs on here see nothing wrong with current house prices (being too high) but are quick to decry an undervalued auction sale.
I suppose i'm mischievously pointing out the contradiction of this; if EAs want to insist that house prices are purely a function of market forces then it must be accepted that auctions are also symptomatic of these very market forces.
Supply and demand, innit.
PeeBee I would love to buy at an auction please can you advise what value an Estate agent adds to a buyer?
I would love the views of some intelligent estate agents (of which I know many peruse this site).
I am in the process of setting us a small single office estate agency in the Home-Counties. During my visit to the Professional Property Show last month was introduced to Iam-sold.com. As auction services go this may well bridge the gap between agency and auction offerings and mitigate the implications of what PeeBee was going on about. Please have a look at the site, I would love your thoughts either posted here or sent to thestartupemail@gmail.com. Many thanks in advance. Edward.
Sibley's...: Please allow me to put my two penn'orth in on this one, mon ami.
In an ideal world, auctions SHOULD be the perfect place to achieve 'market value'. They allow transparent bidding (well... discount a smidgen of 'bidding off the wall' and it IS transparent...ish...); should promote highest price to be paid; and leave buyer and seller in the lovely win:win state that are manna from heaven as far as Agents are concerned!
HOWEVER, auctions offer no such ideal world. For a start, a significant proportion of the market will not be drawn into such an open bidding position, thus limiting the sale dramatically. Many auctions are held in remote central locations - which again does nothing to encourage prospective buyers to participate. The actual requirements of an auction lay down huge barriers to the average buyer. Finance in place; legal matters all in order - the fall of the hammer being (unless a 'conditional auction'...) the legal Contract signed and sealed. Many auction properties are 'fixer-uppers' - needing anything from a lick of magnolia to heating systems and kitchens replacing as have been stripped bare either by the ex-owners or worse... The average FTB will find it var nigh impossible to raise finance on something along those lines!
Tell me, Sibley's... - would YOU buy at auction?
Now here's the thing. I'm a saddo - okay, I admit to that. I watch programmes that bring about the urge to shout my feelings at the TV. The top of the list is Homes Under The Hammer. So, there I am, every midnight, watching chancers buying their first "investment"/"development" - or whatever the presenter deems this PURCHASE be called in the name of good television... Of every ten sales followed on the programme you are extremely lucky to see one that the buyer intends to actually LIVE IN the property. THAT alone is evidence of what auctions produce, Sibley's... my friend. Every statistic, from houseprices to shampoo is based upon a percentage of a percentage of a sample - so this is just as accurate as any I reckon. Less than ONE IN TEN auction properties sold to owner/occupiers - so you tell me - is that a fair representation?
Anyways - back to HUTH... Last night, a guy bought a bungalow with some land. Needed 'pimping' - but masses of potential. He paid £152k for it. Obviously, he was the highest bidder - so that must be the property 'worth'. Except it wasn't. The guy was laughing all the way to the bank - because he went with every intention of paying £175k! So - he clicked a 13.15% discount from what HE was prepared to pay - and only because others wanted MORE OFF!!
An auction price tells you one thing and one thing only. The best offer made, in a room, on a particular day, by a particular set of potential buyers - NINETY PERCENT PLUS of them buying with the sole aim of making money out of the deal.
And THAT is "a free market and price... dictated by someone's willingness to pay."?
Sorry - I must be missing something there. I just don't follow how these sales - which you and your peers were basically frozen out of - tell you anything about the market...?
I do, however, look forward to your enlightening me accordingly, mon ami ;o)
Hang about Ray, you can't have it both ways.
In the past, when i've opined that house prices (in general) are too high, the stock response (not necessarily from you, mind) is that we have a free market and price is dictated by someone's willingness to pay.
How is this any different?
@Anna why do you say that they sold below market value. They may have sold at market value or even above. One could say that any house sold not at auction was sold over market value.
Thats 2393 properties sold below market value, well 2392, every now again a property should sell by auction, but not often.
Why are the people who attend auctions vultures Ray? Anecdotal evidence would suggest that banks are setting high reserve prices at auctions.
Which set of statistics do you suggest are distorted by auction sold prices??
Of those 3,467 it would be interesting to know how many were repo's because in my view the lenders reserve prices set to just recover the mortgage and the vultures who attend, make for distorted lower average prices ?