People watch the auctioning of a house at 6707 Burford Street in Burnaby, British Columbia by Able Auctions on June 29, 2016. In the end the home's reserve price was not met and a sale was not finalized.Ben Nelms/The Globe and Mail
It wasn't a silent auction, but it sure felt like one.
A Burnaby house described as a tear-down failed to sell at auction on Wednesday, when bidders did not meet the reserve price. None of the bidders showed up for the event in person, and those who did participate did so online.
This marked the second time in June that a home in British Columbia's red-hot real estate market failed to sell at auction. A Victoria residence drew just one bidder last week, and the property remains up for sale.
Greg Klemke, the realtor for the five-bedroom, two-bathroom Burnaby house, said he was stunned by the auction result. "This is totally bewildering to me. I really don't understand it," he told reporters. Jeremy Dodd, president of Able Auctions, chuckled when asked if the auction went as expected. "Um, no, no, I wasn't anticipating this," he said.
The house – built in 1947 and listed at close to $1.7-million – is near Burnaby's Deer Lake Park. The listing notes that the house itself is of little value, but it sits on a lot that's nearly 7,500 square feet.
Housing auctions are rare in British Columbia but common in other countries, such as Australia. The event – which was held in the home's driveway – drew the attention of several media outlets, as well as about 20 onlookers.
The excitement level dropped, however, when it was announced that all of the bidders had opted to participate online. Bidding started at $2.5-million and then dropped to $2-million, before a bid of $1.5-million was confirmed.
But despite the auctioneer's repeated calls of "1.5 looking for 1.6," a higher bid did not materialize. "As with any real estate transaction, the seller had a price that they did not want to sell it below. And, unfortunately, we didn't reach that price today," Mr. Dodd said, adding that the list of people who were interested in the property will now be turned over to Mr. Klemke.
Mr. Dodd would not disclose the exact reserve price, nor say how many bids were submitted. But he said 40 people received registration packages and all of the bidders were local. He said he's confident the property will sell quickly. When asked if the auction had been a failure, Mr. Dodd noted it had brought significant attention. But he said that attention – particularly from the media – might have scared some out of attending the event in person.
"People did not want to come and stand and be filmed. And that's fair," he said.
Mr. Dodd said the auction also showcased a new way to sell property in this market.
Mr. Klemke, who is with Macdonald Realty Westmar, said the bidders who did participate appeared to be looking for too good of a deal. "It looked like all we had were bargain hunters that were trying to steal a property and that wasn't going to happen," he said.
When asked if he would recommend an auction to his next client, Mr. Klemke said he would take some time to think about it. He said going to auction was not his idea and he believed the seller had reached out to the auction company.
Kelly Alm, a former realtor who turned out to watch the auction, said he approved of the process because it's more transparent. "You see the price and who's willing to pay it, the value, right in front of you," he said.
Another man, who identified himself as a local developer but declined to give his name, said he attended the event because he was curious about how it would unfold. "It's a new way of selling, it's a new process," he said.
Andy Stephenson, a sales associate with Sotheby's International Realty and the realtor for the Victoria home that recently went up for auction, said his clients were from Australia and familiar with the process.
He, too, said the auction generated significant attention for the property, even if it failed to sell.
Mr. Stephenson said he would not be afraid to try the auction process again. "I think I would try it again because I think that the benefit my seller received from the exposure of it was undeniable."