You are cherry picking and employing a straw man in the same paragraph. There are many other reasons why the two classes of goods are not sold the same way. You are creating an argument by analogy where the analogy is non existent.
I get it that you think the vendor/selling agent have too much power but however they try to manipulate things it comes down to what somebody will pay. If buyers go into it eyes open and understanding what is in front of them then they actually have the power as they donât have to bid. If you go to an auction where there is a seven figure sum in play without preparation and knowledge, and you believe what the selling agent is saying, then you have made yourself a fool not the industry.
I find this quite ambiguous. Is there meant to be a stop after âsuggestionâ? Are you saying you are trolling, that is deliberately putting up a spurious argument you donât believe just to get a reaction? Why?
No I am making a contrived point, and I disagree that real estate auctions should be unique in how a prospective bidder can be misled. I do not agree my analogy is spurious since my point is the (as I see it but you do not) real estate auction system is an abusive market place.
If the majority of properties are sold by auction and one wants a house, that is a fallacious belief. Eventually the buyer would be all but forced to join in.
Again, why shouldnât it be applied to everything?
Why? It is all about buying and selling and maximising value for the seller, right?
Let those with the cash and the nous win it all. Manipulating buyers is an art; so is programming a poker machine or marking cards and switching decks. The former is a respected profession, the latter somewhat less so.
I doubt either of us will change our view and I accept I am in the minority, and will let this go.
I have seen the opposite effect at two auctions. One an inner city desirable renovated Queenslander in an ideal suburb and with great location.
The second a rural farm lot with house and much else in a good location, great views and practical house.
In a buyers market the sellers were caught out and sold below the reserve. Some might say the sellers had the best price on the day. There were self imposed time pressures for both sales. Knowledge of both markets suggests they were great buys on the day.
Perhaps the agents black art in these two instances was finding a buyer at all? Or was the art in ensuring only one committed buyer turned out on the day? It is hard to known for sure and even more difficult to prove otherwise.
Note:
I do worry about how the real estate market operates on the whole and how over invested Australia is through the inflated values of real estate. We just canât keep on paying more for less. Especially when we have many more bedrooms in our housing than people to sleep in them. An economist would ask why are you adding to the chicken coup when your hens only use half the boxes?
Price gouging is seen as âevilâ in the food sector, Mr Dutton says he will go after them. Why is it evil there but if you can gouge a few thousand, tens of thousands, hundreds of thousand, or even millions more out of bidders at an auction it is seen as good business???
You have my agreement, if they want unfettered market forces in one area (supply/demand) then why do they want to forceably want control in another. Is it purely political survivalâŠ
Do they want greed/lust of money for those that can have it or aspire to it and yet control other things so the masses donât get upset when they canât find the frozen packet of peas on the shelves.
It is shining a light on what I think is a double standard. There are many other expressions of the same ilk, eg Pay day money lending interest rates, credit card interest rates, personal loan rates vs mortgage interest ratesâŠwhy are they so diverse and even supported or allowed, another is petrol pricing.
Because the type of goods is completely different so an acceptable method of sale is completely different.
If you are selling packets of frozen peas they are all the same at any time and over time. This allows a fair market value to be set for a packet of peas not this packet of peas. We are upset when the market gets a sudden shock and prices jump, in part because there is no time for competition to level things out. Competition will work to level out bumps (given time) because each packet is comparable to the next.
If you are selling a house it may be decades since it last sold and it isnât the same house that it was then anyway. An experienced person may take a fair guess at what its market value may be but they are often wrong by a large amount. The fair market value for a house is what it will sell for now and except for identical units with the same aspect they are unique. Private treaty, tender and auction are all methods of arriving at that, each with its own strengths and weaknesses.
If there are aberrations in the market the buyer actually has the power in both cases, simply donât buy. This will bring the market to heel very quickly. I know that I am simplifying somewhat. What if you canât just not buy? This is actually quite rare, in both kinds of goods there are nearly always substitutions available. If you must have this packet of peas now (instead of some other vegetable at some other time) or this particular house right now then you pay what you must.
If you look at my posting history you will see that I am not a big fan of laissez faire capitalism. No matter what kind of economy you have, supply and demand need to have some role in determining price. Unless you go for the strict control of pure communism which leads to huge queues for staples and gross corruption.
Lets not try to intermingle communism as an economic system with how tyrannical governments have implemented it and made many horrendously bad central decisions.
