Auctions - Gold Coast Australia

I believe that certain real estate practices being conducted on the Gold Coast may be in breach of the Property Agents and Motor Dealers Act (PAMD) and the Trade Practices Act.

These practices relate to promotion and conducting Auctions.

The relevant legislation I will be referring to are;

PAMD Act

o Section 154 of the PAMD act specifies the Code of Conduct applicable to a real estate agency or agent.

o Section 231 of the PAMD act specifies the code of conduct applicable to Auctioneers.

o Section 593 of the PAMD act relates to false or misleading representations or statements.

o PAMD - Real Estate Agency Practice Code of Conduct - Schedule 7 - Honesty fairness and professionalism

o PAMD - Real Estate Agency Practice Code of Conduct - Schedule 9 - Agent to act in client's best interest

o PAMD - Real Estate Agency Practice Code of Conduct - Schedule 14 - Fraudulent or misleading conduct

o PAMD - Real Estate Agency Practice Code of Conduct - Schedule 15 - High pressure tactics, harassment or unconscionable conduct

o PAMD - Real Estate Agency Practice Code of Conduct - Schedule 18 - Soliciting through false or misleading advertisements or communications

o PAMD - Real Estate Agency Practice Code of Conduct - Schedule 21 - Advice about market price or rent

o PAMD - Real Estate Agency Practice Code of Conduct - Schedule 29 - Duty to obtain maximum sale price

o PAMD - Auctioneering Practice Code of Conduct - Schedule 7 - Honesty fairness and professionalism

o PAMD - Auctioneering Practice Code of Conduct - Schedule 9 - Auctioneer to act in client's best interest

o PAMD - Auctioneering Practice Code of Conduct - Schedule 14 - Fraudulent or misleading conduct

o PAMD - Auctioneering Practice Code of Conduct - Schedule 15 - High pressure tactics, harassment or unconscionable conduct

o PAMD - Auctioneering Practice Code of Conduct - Schedule 18 - Soliciting through false or misleading advertisements or communications

o PAMD - Auctioneering Practice Code of Conduct - Schedule 22 - Advice about market price

o PAMD - Auctioneering Practice Code of Conduct - Schedule 31 - Duty to obtain maximum sale price

Trade Practices Act

o Part V - Consumer Protection of the Trade Practices Act
o Section 52 Misleading or Deceptive Conduct

o Section 53 False or Misleading representations

Auction - Definition

An auction is a form of sale where potential purchasers make competing offers or "bids", with the person offering the highest bid being declared as the purchaser.

Market Information - Gold Coast

Australian property monitors - Home Price Guide - (Owned by Fairfax which also owns property website Domain) publish auction clearance rates for every major city within Australia. The statistics that relate to adjusted auction clearance rates include properties sold prior to Auction by private treaty negotiation ( Including private treaty sales prior to an auction increases the actual auction success statistic and is misleading the market further about Auction success). Representatives of Australian property monitors attend auctions and contact marketing real estate agents to compile these statistics. They rely in part on real estate agents providing factual auction result information.

The published statistics for the Gold Coast are:

Jan 07 32.6% 49/150
Dec 06 25.0% 14/56

Nov 06 36.0% 45/125

Oct 06 33.1% 53/160

Sep 06 33.3% 38/114

Aug 06 37.5% 51/136

Jul 06 35.8% 47/131

Jun 06 32.0% 41/128

May 06 34.7% 42/121

Apr 06 36.3% 61/168

Mar 06 28.7% 42/146

Feb 06 28.1% 45/160

For a full year on the Gold Coast as quoted by Australian Property Monitors - Home Price Guide there were 1595 auctions and of those auctions 528 sold at auction or prior to auction. This gives an adjusted clearance rate for the full year of 33.1% (528/1595). The real impact of these statistics is to quote the auction failure rate at 66.9%. Just over 2 out of 3 auctions fail on the Gold Coast. (This clearance rate would also include mortgagee in possession auctions which typically sell below market price due to a lowered reserve price expectation)

The legislation

The legislation specifically points to the responsibilities of agents and auctioneers. These responsibilities make it a breach of the act to make false or misleading communications or statements and for the agent or auctioneer to not work in the best interests of the property owner. If an agency or agent promote that auctions are the best way to sell a property they would be in breach of the act based on the auction clearance rates on the Gold Coast unless they can clearly demonstrate why that particular property would be an exception. If an agent or auctioneer are aware of these clearance rates and cannot clearly demonstrate how a particular property would be an exception, then they are not working in the best interests of the property owner. Clearly 2 out of 3 auctions would require scrutiny.

Advice about Market Price

If the agent or auctioneer provide advice about market price, either orally or written they must be able to substantiate it. The suggestion that an auction would be the best way to determine the market price may be misleading particularly if the highest bid at auction, whether the property sells or is passed in, is significantly lower than the advice provided. Having a final vendor bid, that meets advice to market price will not substantiate that the process of an auction was in the property owners best interest or was the best way to achieve a maximum selling price.

Price Expectations

Under the act, an agent has a responsibility to advise a property owner if they believe their price expectations are too high or too low. In the case of too high expectations, agencies do not provide that honest advice, but rather suggest an auction as a process to condition that property owner to accept a lower price then their expectation. This is a dishonest & unconscionable approach that costs a property owner thousands of dollars in advertising monies to simply come to an awareness of a fair market price.

Duty to Obtain Maximum Selling Price

The agent or auctioneer has a duty to obtain the maximum selling price. I don't believe this is achievable on the Gold Coast for an auction when 2 out of 3 auctions fail. Additionally you have reservations from buyers who are well aware they do not have the same consumer protection or buying conditions at an auction. This reservation from buyers, to participate, particularly at a fair market price, results in a lack of competition at the auction from potential buyers. This situation compounds the inability for an agent or auctioneer to obtain maximum selling price.

Disadvantaged Consumer Protection

Auctions do not provide the same level of consumer protection. No cooling off period exists and there is no provision for conducting a satisfactory valuation or building inspection after purchasing at an auction, which is provided within the legislation for private treaty property sales. Buyers are well aware of this and avoid buying at auctions unless they believe the property is cheap - or the property is in a particularly high demand position.

High Pressure Tactics and Coercion

I have personally witnessed at many a Gold Coast auction, agents trying to influence a property owner to place their property "on the market" and to accept far lower bids for their property then the actual reserve price provided. This is pressure placed on a property owner to accept less, particularly because the property owner is only too aware they also spent considerable money on an advertising campaign that will potentially be wasted. The agent may in fact be recommending selling at a fair market price but if the price were significantly less than the original market price advice any property owner would feel reluctant to sell.

Evaluation of Results

I believe the office of fair trading has a duty of care to evaluate actual sale prices achieved at auction and compare them to the market price the property owner was provided by their real estate agent. Particularly if they were provided this price orally without any substantiating support documentation as is stipulated as a requirement on a 22a Form or with an attached CMA.

Auction Practice in Other Markets

Auctions appear far more successful in other markets in Australia. Melbourne averages 60% or above. Of the 7 major areas reported by Australian Property Monitors, the Gold Coast consistently reports the lowest clearance rates. Brisbane performs poorly as well with an adjusted clearance rate of 43.3% (621/1432) for the 6 months preceding and including January 2007.

Saturday 31st March 2007 - Gold Coast Bulletin

On this date, the following numbers of auctions were advertised in the Gold Coast Bulletin.

Agency No of Auctions No of Advertising Pages

Ray White 89 35

Professionals 24 6

LJ Hooker 26 4.25

Harcourts 13 3

Coldwell Banker 5 2

First National 5 0.5

PRD Nationwide 2 0.5

Raine & Horne 2 0.25

Elders 2 0.5

Wentworth 5 1

Independants 8 3.25

TOTALS 181 56.25

Average Page Cost $4,500 - Estimated Advertising Spend $253,125 - Average spend per auction/week $1,398.48 - Average weeks for auction ads 4 - Estimated Auction cost/property $5,593.92

Advertising costs vary depending on the purchasing power of the agency group advertising, but I have used a estimated $4500 per page. (Casual rates are in excess of $6000 per page) this equates to $253,000 being spent on advertisements each week on the Gold Coast for auctions. (Weekend 31st March is a average week with number of advertisements represented in the Gold Coast Bulletin.) Based on a success rate of only 33.1% for auctions, it means that over $169,000 is spent by property owners each week on the Gold Coast to advertise an auction that will fail. $169,000 every week! Based on 48 weeks for the year - that is over $8.1 Million dollars in property advertising for FAILED auctions. How can anyone say that this process is in the best interests of property owners?

Local Information from Property Owners

If you need information from property owners who can support the process of failed auctions on the Gold Coast please advise and I will supply specific information of people for you to contact, or I can simply create a process for them to lodge their complaint direct. This process will identify specific agents and agencies, and to be fair I would rather address the issue from a legislative process then create much attention to specific companies and individuals. This issue though needs serious attention, and I will go agent by agent if that is what it takes to provide a fairer system for property owners.

Section 594 of the PAMD Act - Public Warning Statements

Under the act the Minister or chief executive may make or issue a public statement identifying and giving warnings or information. It is in the public interest on the Gold Coast to be made aware of the failings of auctions on the Gold Coast. Too many people are being convinced to auction their property at significant cost, significant disillusionment and with a 67% statistical chance of failure.

Auctions are supposed to have no price indication

The web portals realestate.com.au and domain.com.au all require a price to be entered when advertising a property on their site. An agent can select not to display that price, but the website requires a price so that it can sort that property in search results. Agents typically place a far lower price in this section so the property appears in buyer searches at significantly lower values to try and improve enquiry. This is a form of bait advertising by stealth. The picture below is the property addition section of Domain. Realestate.com.au is similar. The red asterix indicates compulsory fields.

The ACCC has taken undertakings from Ray White in the past regarding bait advertising yet this process is continuing every day because these websites make it mandatory for Price to be entered when advertising a auction.

REIQ - Position of Influence

Obviously the Real Estate Institute of Queensland is in a position of influence when it comes to assessing legislative changes for the PAMD act. It should be noted that this industry group represent the wishes of its members - real estate agents and agencies. (I am also a member of the REIQ). The current chairman of the REIQ is Peter McGrath. Peter is also a senior manager for a Gold Coast based agency called HILLSEA which has 7 offices all on the Gold Coast. The position of this company is to not do auctions because they know they are not in the best interests of property owners. You have the chairman for the REIQ taking an ethical position when it comes to conducting real estate, yet it is not reflected in the REIQ position. I find this very illuminating.

My Recommendation for Advice to Market Price

Every residential property that is for sale must have a valuation provided by a independent licensed valuer. By providing this property valuation through an independent source both the property owner and the purchaser will have a secure knowledge of the market price (price range). This could eliminate much of the angst associated with real estate agent practices and provide a better level of consumer protection for all parties. Agents no longer have to dance between a buyer and seller with regards to property value as there will be a legislated requirement for full disclosure. This valuation could be equally paid for by seller and successful buyer, and also eliminate mortgage providers need for additional valuations. Agents use the market appraisal system as a way of enticing people to sell through them and creates a system that rewards dishonest behaviour.

There is a serious requirement for this practice to be stopped specifically on the Gold Coast, or for far better provisions within the legislation to ensure property owners are better informed about decisions they make with real estate agents. State and Federal Governments have a responsibility to provide consumer protection, which is why the Trade Practices act and the PAMD act exist.

Source: http://ezinearticles.com/?Auctions---Gold-Coast-Australia&id=511603

Online Auctions

Online auctions have become an increasingly accessible way of shopping via the internet. They offer a huge variety of products which are available at consumers' fingertips, and in the comfort of their own homes. Sellers can sell unwanted items that might otherwise be thrown away.

This type of consumer buying continues to evolve, and is extremely popular and successful in today's competitive marketplace.

There are two main attractions to online auctions. Firstly, the consumer is often able to secure an item at a lower price than it would be made available for in high street chains. Secondly, online auction sites offer an exciting and stimulating way of shopping. 'Bidders' enjoy the competition for products; a 'win' can be exhilarating, as well as being conveniently carried out without having to drive to an external location. In today's society, competitive online shopping is becoming ever popular.

The most successful internet auctions are those that are easily accessible, are open to as many bidders as possible, and are straightforward to follow. An online auction is often active for a number of hours, during which bidders 'bid' for the product they want. They are usually allowed to withdraw from the proceedings at any time if they desire. Bidders who are more experienced can place bids at several sites at once, and will use software that tracks their status at each online auction.

There are basically two main types of auction process: Forward and Reverse.

Forward Auctions

In forward auctions, bidders who offer the highest bid win the item. The seller will put up the items available to buy and bidders will begin competing for these, thus driving the price up. Sellers might fix a reserve price so that sales do not fall below this. These types of online auctions are well known for selling and buying collectibles but also may sell business to business.

Auction sites have their own rules, such as whether sellers need a certain business accreditation to take part and whether to set a registration fee before use. Another consideration will be how payment is made; either between the parties involved or through the site itself. Seller profiles are established and rewarded by the more they sell and the more reliable they prove themselves in terms of delivery and quality.

Reverse auctions (Dutch Auctions)

In this type of auction, bidders who offer the lowest bid wins the item (the 'item' in reverse auctions is usually a contract for business). The event itself will last for a matter of just a few hours. Reverse auctions are important for supply chains (particularly electronic) and are viewed as a money saving exercise. These reverse auctions are becoming an increasingly popular way to do business through the internet.

Auction Sites

There are numerous auction sites currently operating online.

Many of these sites are not geared towards a particular specialised area; they can be visited and used to buy and sell almost any general item imaginable. Products are stored within categories, alphabetically, or consumers have the option of using the search tool to locate an exact match. Once the product is found, information, as well as numbers in stock, will be displayed.

Some auction sites will conduct the bidding on a buyer's behalf if instructed to. They may also include a 'Buy Now' feature that allows the buyer to opt out of the auction and purchase the product immediately at the displayed price.

Dedicated sites will offer a more specialised service for direct-niche items, for example if buyers are looking for products such as artwork, guns, coins, jewellery or vintage clothing etc, these can be easily located through the internet's search engines. Again, consumers are able to search through categories or enter keywords to find a niche product quickly, which they are then able to bid on. Many direct-niche sites also offer the option to purchase items without bidding.

Penny Auctions

Also known as 'bidding fee' auctions, these sites offer an exciting way of buying and selling online, providing the consumer with a retail incentive as well as entertainment value. Penny auctions enable consumers to often get products that are very popular at low prices.

Bidders pay a non-refundable fee and receive a pack of bids before the auction begins, at a set price (a fixed step to ensure fairness). They then place their individual bids and hope to be the player with the last wager before time runs out. With each bid placed on an auction, the timer increases. When the clock stops, the last person to place their bid wins the product and pays the final price for it, which is often very low.

Many consumers enjoy penny auctions because of the competition involved in the bidding process, as well as the sealed end product, approved by a company.

Products that can be bid on in these auctions range from laptops, phones and home appliances to gift vouchers and more. Savings of 70%, and sometimes more, can be made on items.

The success of the penny auction lies within its clear competitive shopping element, and the time it takes to place a bid. Bidders may send short numbers by text message to place their bid (effectively reducing the time it takes) or they may visit the penny auction site and place their bid this way. Many of the sites offer automatic bidding systems to save further time.

By visiting different sites and watching auctions in action, as well as reading reviews on specific sites, consumers will gain a good understanding of which penny auctions are the best to take part in.

Pay-Per-Bid Auctions

These offer bidders the chance of paying for an individual bid before the auction commences, then to add additional bids if they wish, to increase their chance of winning the product. A display will let bidders know their progress within the auction and further bids can be entered. With each bid placed, the value of the product increases as well as the countdown.

Source: http://www.artipot.com/articles/1241923/online-auctions.htm

Visit Auctions India - Winning Big Made Easy

Online auction websites are looking for newer and novel techniques and bidding platforms to increase the number of people taking part in bidding by providing these auctions India sites as a medium to augment interaction between sellers and buyers. This is a place where sellers and buyers come together and take part in the fun filled online auction bidding process.

In recent years, auctions India have become very popular and the liking has seen a growing trend. On auctions sites, customers can shop form best-selling, rare, seasonal and even discontinued items from a wide variety of categories on auctions sites. Customers assemble to auction websites because of the amount of savings one can make through them. This has been particularly the biggest reason for the recent success behind auctions India.

One can save somewhere from 20 to 80 percent or more weigh against the similar products out in the retail market, depending upon the item and its authentic retail worth. Online auction sites are extremely entertaining to take part in and they do not just endow with platforms for bringing sellers and buyers together. Practically each shopper has room so that he/she is able to take benefit of the savings and the fun with so many different kinds of formats and bidding platforms on auctions India.

The most common and exciting form of auction websites are probably the bid- style auctions. Sellers begin with value very small, present prospective buyers the prospect to bid up to any amount with bid style auctions. Buyers go into an agreement with the seller by placing a bid. The maximum bidder succeeds the auction and progresses to shell out for the item, at the end of the auction. The payment could be done through an online transfer, online payment merchant or various other form of payment. The part of the allure is the part where one bids at auctions India. It is amazingly fun and chancy. During a bidding war, i.e. when buyers compete during bidding, it often happens that buyers are swept away. This competition to get hold of the product by any means results in dozens of bids being placed in the final minutes of the auction.

Another bidding format used in various auction websites is the reserve price auctions. A seller places a smallest amount bid price, which is in remission from bidders until the end of the auction, with reserve price auctions. If the reserve price is not achieved at the end of the auction, the seller is not compelled to vend the item to the uppermost bidder and the bid-style arrangement is still ready with reserve auctions. This approach is a big way to make sure that without the likelihood of losing money on the deal, the seller collects reasonable value for the product. For reserve auctions, a few buyers can be tentative and apprehensive. Sometimes buyers feel that because they may by no means reach the bare minimum reserve price set by the seller, therefore they believe that bidding on a reserve auction is a squandering of time.

The most straightforward bidding format in auction websites is the fixed-price auctions, which are generally referred to as "buy it now" auctions. Sellers offer items that are available for instant purchase to the first buyer to respond with fixed-price auctions. For those that are not concerned in waiting out the bidding process of reserve and bid style auctions, these types of auctions are fabulous. However, many fixed-price auctions do necessitate that buyers pay instantaneously upon clicking the "buy it now" button.

Source: http://goarticles.com/article/Visit-Auctions-India-Winning-Big-Made-Easy/6312908/

What is the Best Duration for an eBay Auction?

In this article, I'll give you some pointers designed to assist in answering the question.

You might wonder why you would ever wish to have less than the maximum exposure i.e. 10 days? Surely running your auction for the longest time would give bidders more opportunity, and therefore a higher sale price would result? Certainly eBay.com would appear to think so, as they currently charge a fee of $0.20 for the privilege of operating a 10 day auction.

However, if you have a very popular item or if you have many identical items to sell, it may pay you to have a shorter auction duration. Also, it pays to consider the end point of your auction very carefully. In addition, if you are running a Fixed Price auction, there's a little trick you can employ to give you extra exposure.

So, let's review the elements to consider in the setting of your auction duration.

a) Start/end day of auction

In my experience, for most categories, the weekend is by far the busiest viewing period on eBay. I would estimate that around 50% of views of my auctions take place on Saturday and Sunday. In setting auction duration, therefore, the weekend peak could be important to your success.

If you can arrange to end an auction on Sunday night, you get the benefit of those who wait until the end of the auction to bid, plus the enhanced viewing traffic numbers which appear during the weekend.

This means if you're posting an auction on Tuesday night, a 5 day auction could be good.

Having said that the weekend is the busiest for most categories, some could benefit from a midweek closing date. Items in this category would include those in which goods are offered for business users.

If your item is targeted at businesses, you want people to bid for your item while they are at work. In these instances, make sure your auction covers working days, and concludes during work time. It has also been found that office equipment and supplies sell well in the morning.

Be conscious of the time when you post your auction, as this is the exact time it will finish a number of days ahead. There's potentially a great deal of difference between an auction closing at 10 o'clock on Sunday night, and 10 o'clock on Sunday morning. If you can pitch your auction to be the former, you could benefit significantly from those extra weekend viewers. (Note the section on Time Zones later.)

b) Known popularity of the item

If you know your item is very popular, and your past experience shows that you will always sell at or more than the price you want, even outside of normal peak periods, then a 1 or 3 day auction could be appropriate. The benefit of a 1 or 3 day sale is that you can sell more items, more quickly.

c) Awareness of eBay sort facilities after searching

Whenever eBay's search is used by an eBayer, the default is that it returns auction titles in the order of how long auctions have left to run. Auctions which have minutes, or seconds to run, will appear first in the returned list. Auctions which have 9+ days to run will be at the end. And the list may run to many, many pages.

Experience has shown that eBayers tend to look only at one or two pages in returned lists. This means it is important you get your auction onto these first two pages at some point in its life - another reason why a 1 or 3 day auction might be better than a 7 or 10 day duration.

Be aware too that a high proportion of bidding activity takes place towards the end of an auction. This is natural. Buyers are on the lookout for bargains. If they can nip in with a bid at the end of the auction, they might get the item at a good price and there may not be time for others to top their bid. (Buyers can also use "sniping" software, designed to place a bid at the latest possible time on auctions which are of interest to them.)

However, the searcher can easily re-order the returned titles list. A popular option is to re-order the list into "newly listed" sequence. The top of the list will now show auctions which have been newly added to eBay. This is why there is sometimes a blip of bidding activity at the beginning of an auction as well as at the end.

d) Time Zones

eBay's default is to commence your auction from the time you submit it. As you know, this means it will terminate at that exact time, the number of days ahead that you select as the duration. However, if you're offering your item internationally you should give consideration to the time zone you're aiming for in terms of auction finish point.

For example, in the USA half of all eBay members reside in the Eastern Time Zone. So an auction ending at 10pm Pacific Time is fine for west coast eBay members, but over on the east coast this is 1am! So you're effectively losing around 50% of potential bidders at a critical point in your auction.

eBay does provide an option whereby you can schedule your auction to commence at a specific time (and on another day). In fact you can set your auction to start at any time and day up to 21 days ahead. This means you can commence your auction according to the timing you believe will attract the most viewers. There is a small fee for using this feature.

This is a useful capability if you want to create your listings in advance, and then have them released onto eBay in a phased sequence.

e) Fixed Price auctions - Single Item

I mentioned a little trick earlier. Well, here it is. With a Fixed Price auction for a single item you could consider managing your auction duration dynamically. You need to be monitoring your auctions closely i.e. throughout the day, to undertake this technique.

When bidders do a search on eBay, you know the auctions with the least amount of time left appear at the top of the returned list. So it is advantageous to keep the remaining time on your auction as short as possible. This is a way in which you get four bites of that cherry for a single listing fee.

1. Start your Fixed Price single item auction off with 1 day duration. Wait for someone to buy.

2. When the auction has just over 12 hours left, go in to the auction and revise the auction duration to 3 days. Yes, you can do this - as long as there is at least 12 hours left. Wait for someone to buy.

3. When the auction has just over 12 hours left, go in to the auction and revise the auction duration to 5 days. Wait for someone to buy.

4. When the auction has just over 12 hours left, go in to the auction and revise the auction duration to 7 days. Wait for someone to buy.

5. When the auction has just over 12 hours left, go in to the auction and revise the auction duration to 10 days. (Don't forget this will cost you a small fee on eBay.com) Wait for someone to buy.

6. The auction concludes naturally.

This might look complicated, but it isn't really once you get the hang of it. Of course, at any point during the above process someone could buy your item and your auction closes automatically. If you have another of the same or similar item to sell, you can re-list it.

f) Fixed Price auctions - Multiple Items

With a Fixed Price auction for multiple items, I would recommend you set the auction duration to the maximum - 10 days, or 7 days if you're not prepared to absorb the extra fee on eBay.com.

When you have multiple items it is not advisable to use the ploy described above for Fixed Price single item auctions. This is because as soon as you receive a bid (in this case it would be a Fixed Price sale), you are unable to modify the auction duration even though you may have many of the multiple items still to sell.

If you sell all your items within your chosen 7 or 10 days, then the auction closes automatically anyway.

Article Source: http://EzineArticles.com/88824