Private Treaty changing to Private Auction

JonatanMack

Hi there. My partner and I have been looking to buy our first home for a while. We saw an ad for an apartment stating: for sale by private treaty. Guide price 155k.
We went to see it and were told there was a bid of 147k from a cash buyer (we are also cash buyers). We bid 150K. The EA said that the other bidders had an engineers report and were happy with it and suggested we do the same. We thought this was a little strange as these reports are not cheap and it seemed unnecessary at that early stage - no point getting a report when we might be outbid. We said as much to EA and he said it was something the vendor wanted. We spoke again and said that we didn\'t want to pay for a report until it went sale agreed.
A few days passed and bidding went to 152 and we then bid 153.
At this point he asked how we would feel about a private auction. We said that we would rather just get it over with and were not sure about the need for a private auction (he said there were only 2 bidders). He said he would ring back.
We left it a few days and then called him back today. He said that ours is still the highest bid but that they were going ahead with the private auction and there was a newly interested party in the process of getting an engineer\'s report. He said the vendor\'s solicitor was drawing up contracts and the auction was likely to go ahead in a week or so. He said contracts would be signed on that date.
We said we were not particularly keen on this and might not be prepared to take part in an auction. We\'re thinking about it now.
I was just wondering does this kind of thing happen often? Any advice?
It clearly states private treaty in the ad but seems like some kind of auction was planned form the outset. As for the price we would be prepared to go a little more but not a lot. I don\'t think it will go a whole lot more but who knows. What I don\'t like is the fact that we took time out to look at the place twice assuming it would be sold by private treaty. I would also like our solicitor to look over the contract before we sign anything. Are we expected to bring a solicitor to this auction? Adding yet more expense to the whole thing.
Thanks for any info.

Ms Doubtfire1

sounds like a right set up of a bidding war. These things always make me uncomfortable and I always walk away as I don't like being played. never heard of something like this happening in the property market though?

Michael D Not Higgins

By private auction do you mean sealed bids? It seems like the EA and/or buyer sense some more money to be made by switching the game up. Unless you think there's value in it, I'd suggest walking.

davindub

Tell him your interested in other properties and if you can't close it, walk away, I know its hard but these "modern auctions" are just there to place loads of pressure on you rather than allowing you to think and then act. You don't even have the protections of a public auction. So the price you end up on might not necessarily close the deal, it might remain on the market at the new higher price.

I know one agent in Dublin was trying them a lot, they don't advertise them anymore but there was bad reports at the time about them.

BTW he wanted you to get invested in the property by spending money on the report..... he knows all the tricks so I'd actually avoid his agency altogether. You can't trust EA's too much but you don't want to work with the dodgiest EA's either. I just won't deal with 3 agencies in Dublin, and the properties went for lower than I would have paid if I felt I could work with the EA.

JonatanMack

Thanks for the replies.

Michael D you asked what exactly I meant by private auction and that's part of the problem. I am not entirely sure what he means myself, those are the words that the EA used. Maybe you are right he means sealed bids, as explained here in the Irish Times:

There are ways that sellers create “auction-like non-auctions”. The practice of best bids or sealed bids occurs regularly, it is like having an auction where you get only one chance to make a bid, but that bid isn’t binding the way an actual auction is.

So that says that it doesn't follow true auction rules which is part of what was scaring us off.

Davindub I know exactly what you're saying about trying not to work with dodgy EAs. We walked away from one before because he was pushing us too hard to the point where he acknowledged we were the highest bidders but we could close for 5 or 6k more. We said we'd take our chances but he didn't want to hear it. Kept pushing us to add to the bid. I wouldn't deal with him in the end. There's just no way we are going to incur 300+ euros expense prior to a bid being accepted.