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Are auctions going to end agent commissions?

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Real Estate Professional | 10 Oct 2014, 09:33 AM Agree 0
It’s Saturday morning in the city and on this one day alone 253 home auctions will see 81 per cent of those properties sold. Paperwork will be signed, and agents will have earned their commissions in a few short weeks. At two per cent, those commissions will be well below the Canadian average even though the agent has worked with both buyer and seller. This isn’t Toronto or Vancouver or any city in this country yet. It’s Sydney, Australia. But could this trend, starting to take root in Canada, destroy our industry?
  • Robert Crowe | 10 Oct 2014, 02:40 PM Agree 0
    I personally don't see this working except in cases of very desirable properties, or in a very heated market. In a normal market where properties generally take 30 - 90 days to sell when correctly priced, the auction will likely result in a lower price. Condos especially would attract low bids. It's the norm in some parts of the world, but it hasn't worked when tried here in Vancouver.
  • | 10 Oct 2014, 02:46 PM Agree 0
    In Florida where I do most of my work the properties that go to auction are generally those that would not sell on MLS after the buyers had opportunity to do due diligence. We had bargain hunting clients send us the auction listings of units we has ourselves inspected and thrown out.

    Same in Toronto they were trying to auction off units in the Trump building after nobody would buy them for months on MLS. Do not recall how that worked out.

    Why would anyone buy a house to live in in an auction environment with no real opportunity to view it. I guess you could have a showing period and then hold the auction but that is just like a different form of multiple offers that take place currently (ie. low list it and take offers on a given date).

    Why would you spend the money on a home inspection etc...for a house you were only going to be a bidder on at an auction. If you did not do the inspection how would you know what to bid ?

    To me the only reason why would you chose to buy a house this way but to get it at a discount that outweighed the risks involved.
  • Yvonne - Richmond, B.C. | 10 Oct 2014, 08:51 PM Agree 0
    The Auction system, amongst others, has been used in Australia for decades; it is nothing new to the Auzzie Real Estate landscape. Auctioning has been tried here, on the West Coast, by a few companies over the past few decades, but there just doesn't appear to be any taste for it by either the buying or selling public.
    At this point in time, I would be extremely surprised if the concept gained any ground in this province, unless someone came up with a very innovative and different approach to the concept.
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