One rear 3 bedroom single storey villa home, 3 active bidders - a senior Caucasian couple, an Indian family and a Chinese family. Who won?
A expat client flew in from Asia so I took him for an auction education tour. I explained the auction game to the property investor, who was new to Melbourne's ubiquitous auction selling process.
"Make no mistake, ladies and gentlemen. We are working for our vendors, and may the best price win," announced auctioneer John from Biggin and Scott to the crowd, doing his best to solicit more bids for his client - where the asset is owned by a company structure.
My client asked the roles of real estate agents in Melbourne. I explained that here, a real estate agent is essentially a seller's agent, paid by the seller. However in other countries, a real estate agent may be considered a 'middle man', a 中介 in Chinese, where they may represent the seller and the buyer in the same transaction. But not here. It is a conflict of interests to do both in the same transaction. This concept is new to many foreign buyers and new migrants, hence, I was told that many buyers have been deceived and manipulated by some Asian real estate agents here in Melbourne, pretending to represent the buyers.
John proceeded to call for the first bid. And he got one very quickly. The Indian family bidded $1,550,000, which was the lower end of the quote of $1,550,000 - $1,650,000. The agent's bid bait strategy worked, as a good prize was offered for the first bidder, a nice bottle of wine, presented instantly to the first bidder.
There was no hesitation at all from other bidders as soon as the first bid was secured, with bids of $10,000 increments to fight off the competitions. The auction war ended at $1,715,000 and a winner was declared. No prizes for guessing which group won.
The rain poured right after the auction, I jumped into my client's rental 4WD to debrief the process to him again. He was very appreciative of the insights and mentorship I provide.
"Erick, my life now depends on you!" he said, to my amazement.
I know why I feel like a father nowadays. I have huge responsibilities on my shoulders! Bring it on.