Guide Price Before Auctions

McGrath have been fined in the past for quoting low "guide prices" before auctions.

This week's Northern District Times reports on an auction sale by McGrath of a property in Beecroft. There were 69 bids at the auction, rising from just below the guide price ($900,000) to 25% above it ($1,117,000)! Sounds impressive, except that the final price was almost exactly the same as the price ($1,116,000) at which an identical property next door had sold a year earlier. So this achieved auction sale price was if anything below market price.

To anyone who knew the local market, the guide price was cleary unrealistic , but the agent was relying on buyers not having that intimate knowledge. Many of those buyers would have paid for building surveys, and realised that was money down the tube once the bidding started.

All those disappointed would-be buyers should register objections with the Office of Fair Trading, and claim back the costs of any building surveys from the selling agent!