Under the Hammer

This morning our agent, Mary-Anne, told us she was showing up early Saturday to put up bunting. She urged us to ask our family and friends and neighbors to all show up for the auction. And she admitted that it was entirely possible that no one was going to bid at the auction.

It seems a little like having a block party to celebrate the fact that we're going to have to stay here because the house didn't sell. Actually, Mary-Anne and the auctioneer both are making sales-y positive speak and telling us that the house is likely to sell if the auction is a failure. Only, of course, they don't use words lie failure in a sentence with anything they do.

The auctioneer strongly suggested that we would greatly increase our chance for a sale if we are willing to accept a lower price. Which, as I recall, is one of the basic tenets of capitalism. If we were willing to lower the price enough, I suspect I could go outside and sell the house and skip the auctioneer's fees. But I don't think that is what he was getting at.

As LK noted later, it is becoming obvious that the auctioneer is Mary-Anne's agent. If her job is to be our agent and get people to buy our house, it is quite evident that one of the auctioneer's job is to get us to sell at any price. And the only person sitting at the table who benefits from that, of course, is Mary-Anne who gets commission on the sale.

Back in our working days, LK and I had different approaches to sales people. I tried to motivate them and give them ideas that experience taught me they would never use. LK tended to be very dismissive and tough on them only to screw with their heads once in a while by rewarding them for good work.

I let her deal with the auctioneer and Mary-Anne about lowering the price.

Because Americans don't auction homes, I keep getting asked how it works. Since LK and I received a couple of quick lessons this week, let me try to explain.

This is the theory. People auction their house hoping to get more money than they would through a normal sale. You are not at risk of getting less than you want, because you set a reserve and the house is only sold if bidding goes above the reserve. (I should qualify that to read: You're only at risk of getting less than you want if you listen to your agent and auctioneer.)

If you set a date for an auction, you don't have to have an auction. If someone offers you a decent price ahead of time you are always free to take it and cancel the auction. If nobody has shown any interest in bidding on the house, you can cancel the auction.

But - and this is the interesting part - if nobody has shown any interest in bidding on the house, it is strongly suggested that you go ahead with the auction. To me, it seems like a very public way of letting the world know that nobody wants your house. I can't think of a poorer marketing message.

But we are assured by our agent, our auctioneer, several of our friends, and numerous people we barely know but who feel compelled to talk about selling houses, that not selling at auction can be a really good thing. The thinking goes that there are people who may want the house but are afraid of getting caught in a bidding war and paying more than it is worth. Once the auction fails they come out of the shadows and make an offer.

Or so the theory goes. The alternate theory is that the agent and auctioneer have come up with a great story that means failing to sell the house is really a success of sorts.

Anyhow, the bunting goes up Saturday morning. Shirley is coming over, fulfilling our obligation to get friends to show up. Jason and Lora have said they may come, but I don't know if they knew how early the auction was. If they do come, we will have pretty well brought in every one we could - which may seem kind of sad in its own way, but I can't quite get up the energy to ask others to come over and watch what is likely to be nothing happen.

Mary-Anne thinks there is one couple that definitely are interested in buying but may not bid unless there's some else who starts. She has talked another potential buyer into coming even though they haven't committed to bidding. It's very possible - and looking probable - that the only bid will be the one they call the Vendor Bid. That's the pathetic one the owners put up to kick off the process in the hopes that some one else will say, "Hey, that's pretty low. I'm jumping into this!"

I've decided that Friday night LK and I are baking dozens of muffins. I figure if we put on an auction where nobody bids, at least we can pay some of the auctioneer's fees by selling them to the people who come to our block party.

And on Monday, sale or no sale, we're on the plane to America.