PROPERTIES sold at auction in Melbourne may not go to thewinning bidder after a real estate agent yesterday sold a BurwoodEast home for more money after the hammer fell.
The auction exposed a legal grey area sparked outrage among thecrowd — and drew the promise of a probe by the Real EstateInstitute of Victoria.
Hao Chen thought he had bought the home at 10 Aruma Court afterthe auctioneer brought down his hammer and declared the propertysold. But moments later — in front of a large and dismayedcrowd — the auctioneer's boss allowed a late bid of $1000more.
"(The auctioneer's) hand hit the piece of paper the propertywas sold," said Martin Bona a local resident at the auction.
Waverley City First National auctioneer David Makris said he hadclosed the auction before accepting the new bid at the behest ofhis boss. First National managing director Thomas Som.
Buyer's advocate Chris Koren of Morrell & Koren said thepractice while rare undermined the integrity of the auctionprocess.
"For want of a little bit more money this will cause a lot ofcriticism in the industry and about the industry," Mr Korensaid.
"They told us because contract had not yet been signed thevendor would sell to whoever would give them the highest (amount). I wouldn't negotiate. It's not a money issue this is bullshit," MrChen said. The property eventually sold for $3000 above Mr Chen'sbid.
Robert Larocca a spokesman for the Real Estate Institute ofVictoria said convention holds that a property is sold at the fallof the hammer although legally the sale only occurs with thesigning of a contract.
"It's a bit of a grey area," Mr Larocca said. "The (StateGovernment) is currently reviewing auction law with a view tochanging the law so a legal contract comes at the fall of thehammer."
Mr Som said that while the outcome was regrettable the agencywas obliged to look after the best interests of its client.
"We're not happy with the way it happened we were not lookingfor this to happen," he said. "But again we are working to get thebest price for our vendor."
Mr Chen said he intended to lodge a complaint with the REIV. MrLarocca said the institute would be happy to investigate after aformal complaint was lodged.
CONSUMER Affairs Victoria says that when the auctioneer hasreached what seems the final bid he or she will announce. "Goingonce twice three times … SOLD!" "There are no further offersaccepted after this point," it says but there is no legallybinding contract until the buyer and seller have signed thecontract of sale.
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http://www.theage.com.au/news/national/outrage-as-house-auctioned-twice/2007/11/17/1194767024532.html?s_cid=rss_national
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