Why isn't housing a normal auction process?

[Raikki]

When a house becomes available, start an auction period on it (1 week perhaps) where anyone can go up to the placard and place a bid. At the end of the auction the highest bid wins the plot and everyone else gets their money back. No incentive for buying low just to resell, a more powerful gil sink, and no having to pray that you get lucky and catch a vacant lot some day before it gets scooped up. I'm a little surprised that it doesn't work this way already.

[seraphuslol]

Because that's not how real estate works.

[Kyuuen]

Because that's not how real estate works.

Uh.. that's exactly how it is actually... especially if there's multiple offers for the parcel or property.

Bad idea due to a few factors:

1) The people with bigger wallets will hold even more of a monopoly: You think it's bad that they bought houses now? Imagine if they were able to spend 8mil to lock you out of the house you wanted. How about 10mil? 15mil? As long as they are below the 40mil mark, that house is a profit for them (At least on Balmung.)

I'm not so sure I agree with this. I mean it has the potential to fall into your scenario as you suggested, but at the same time making it an auction reduces those chances. Right now you just have to be near the property and buy it quickly @ pricing x, then turn it over for profit over x.

But if the price soars up to a point that people can't turn profit over cost of auction, then they lose reason to bid in the first place.

But again, it could still go either way.

[seraphuslol]

Uh.. that's exactly how it is actually... especially if there's multiple offers for the parcel or property.

Not gonna argue. Reevaluate your statement after you actually buy a house

[Kewitt]

Because that's not how real estate works.

Really real estate works a lot closer to an Auction then you think... More so when 2 people want the same place.

[seraphuslol]

Really real estate works a lot closer to an Auction then you think... More so when 2 people want the same place.

Housing market is polar opposite.

Material merchandise auctions (non estate) start low and progressively go up until someone wins by time or reaches the buyout price.

Housing markets do the opposite. Sellers start high and gradually lower their price to find acceptable buyers.

EDIT: I'm not saying bidding wars never happen, is just incredibly rare that housing does turn into an auction IRL.

[Kyuuen]

Not gonna argue. Reevaluate your statement after you actually buy a house

Housing market is polar opposite.

Material merchandise auctions (non estate) start low and progressively go up until someone wins by time or reaches the buyout price.

Housing markets do the opposite. Sellers start high and gradually lower their price to find acceptable buyers.

If a single offer comes in on the house then yes, you are right. However if multiple offers come in on said property then a bidding war can be started. In which it's the sellers option to choose who it goes to; which more often than not, will end up going to the highest bidder.

[Jeykama]

The main problem is that the housing prices haven't been adjusted since 2.38. There has been a considerable amount of inflation since with no new gil sinks. Dutch auctions are all good if people aren't willing to pay the max price, but here the max prices are cheap enough and land scarce enough that people will do it with an adrenaline rush in their haste.

Auctions by default take the ecosystem into account, and also give time for people to pay what they're willing (and any reasonable auction system would have minimum bid increments to prevent penny ante + time extensions to prevent obscene bid-sniping). True, the rich will win out over the lucky, but is it really fair to be lucky? Or maybe it will just make RMT more attractive, but I don't see that getting any worse. You'd get 80% back just by letting the land rot, so it's not like you'd losing everything by sinking gil into property.

One personal house per account should have been there from the start but it's too late now barring mandatory relinquishment (get full $$$ back I guess).

[Stormrider]

Housing market is polar opposite.

Material merchandise auctions (non estate) start low and progressively go up until someone wins by time or reaches the buyout price.

Housing markets do the opposite. Sellers start high and gradually lower their price to find acceptable buyers.

EDIT: I'm not saying bidding wars never happen, is just incredibly rare that housing does turn into an auction IRL.

I am going to guess you are american and have never been in a community where housing shortage and an abundance of fools and money. In Canada in the province of Alberta this has happened in the last decade. Most houses sold for hundred of thousands of dollars more then listing. Realtors would not even sell houses until they got 4 or 5 competing bids. Some properties literally doubled in price from bidding. You still after the bid have mortgage insurance approve the property value. But at the time they were approving everything sky was the limit.

[seraphuslol]

I am going to guess you are american and have never been in a community where housing shortage and an abundance of fools and money. In Canada in the province of Alberta this has happened in the last decade. Most houses sold for hundred of thousands of dollars more then listing. Realtors would not even sell houses until they got 4 or 5 competing bids. Some properties literally doubled in price from bidding. You still after the bid have mortgage insurance approve the property value. But at the time they were approving everything sky was the limit.

Holy cap that's awful