Buyers' agents warn of blind auctions

Posted on 10/11/2011  

Home buyers are being disadvantaged by the increasing use of “blind auctions” by selling agents. The national association of buyers agents says the process puts buyers are risk of paying too much for properties.

In a blind auction, buyers are asked to simultaneously submit one bid only to the selling agent, without knowledge of the amounts bid by other participants.

Real Estate Buyers Agents Association of Australia (REBAA) president Warwick Brookes says he is seeing more and more buyers frustrated by the trend of sealed-bid auctions.  

“The practice is becoming more prevalent, particularly in this current market where more and more agents are trying to facilitate a sale prior to auction,” says Brookes.

 “Most of the time you don’t even get to see the end result with many homes selling in secret. The bottom line is that the process is not transparent and buyers in a blind auction don’t get the ability to buy at market price.”

He says the process allows the selling agent to have total control of the property transaction, which is not in the best interests of the buyer.

“It concerns me that buyers are being manipulated by a sales ploy that works completely in the agents’ favour,” he says.

ENDS

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