{ in·deed·a·bly }

adverb: to competently express interest, surprise, disbelief, or contempt


Stupid o’clock in the morning.

The first of the day’s flights thundered overhead on final approach to Heathrow. Legions of homeless were leaving the warm embrace of the night bus, having slept their way through a slow nocturnal lap of the nation’s capital.

I sat perched on the edge of my bed, watching a live stream of a property auction taking place 10,000 miles away.

Going once. Going twice. Sold! Sold to the gentleman on my…

The annoyingly cheerful auctioneer trailed off as the head of his gavel bounced off his open palm and ricocheted across the open space between him and the assembled crowd of bidders, bystanders, and neighbourhood gossips.

The high resolution camera tracked the graceful arc of a wooden hammerhead as it soared through the air. Its microphone even managed to capture the dull thud as solid hardwood projectile connected with the forehead of the winning bidder.

The man’s knees buckled. He dropped like a stone. Another thudding sound as the back of his head met the unyielding concrete footpath he had been standing on moments before.

A commotion ensued.

One attendee went to the aid of the injured man. Several more crowded around to observe the drama.

The rotund real estate agent, who had been managing the property sale, dashed into camera shot.

Dropping to his knees, he earnestly reassured the buyer by his first name that he would be ok. The agent’s shiny polyester suit coat gaped open, exposing a folded document sticking out of the inside pocket. It was labelled “alternative reserve letter”.

A phone appeared in the agent’s hand. A quick tap saw him call someone, the brief conversation suggesting a family member of the felled bidder, asking them to meet at the local Accident and Emergency department.

Once again, he used a first name, this time the person on the other end of the call. Their number appeared to have been on speed dial in his phone. Interesting.

The camera suddenly whirled around, revealing the anxious young face of today’s amateur cinematographer, the estate agent’s trainee.

Don’t worry, sir. The hammer had fallen and the auction concluded before this unfortunate incident occurred. I’m pretty sure that final bid is binding, your property has been sold.

I thanked the trainee and requested a copy of the auction footage. The camera swang back to the accident scene, where the groggy looking bidder was now sitting up and distractedly fending off the estate agent’s attempt to place a pen in his hand and get him to sign the sale contract.

Sensing a commission potentially slipping away, the agent scooted around the other side of the buyer and tried again. The movement caused a folded piece of paper to fall from another of the cheap suit’s pockets. This one bore a handwritten scrawl: “original reserve letter”. The word “original” had been heavily underlined three times.

In the background, the sound of an approaching siren could be heard. Heads turned as an ambulance double parked, lights flashing. Able to offer little assistance from half a world away, I logged off.

FIRE sale?

I had purchased that property a decade ago.

Attractive enough to be easy to let out.

Commanding a rent that made it a self-sustaining investment, more than covering the holding costs.

Located in an area ripe for strong capital growth, where the real money in property is made, as local infrastructure and employment prospects were set for major improvements.

Today, the days of capital growth outperformance were behind us. Improvements complete, the city’s focus and funding had shifted to other parts of town.

An unexpected set of circumstances had led to the property being listed for sale.

The tenants lost their jobs. Broke their lease. Skipped town.

A scarcity of supply coinciding with a huge surge in demand, resulting in record-high asking prices. The local market was experiencing an extremely frothy peak to their property boom.

Auction clearance rates suggested a swift sale was a near certainty, as a feeding frenzy of aspirational buyers bid up prices by 20+% over what any rational financial analysis would deem to be fair market price.

After a brief three-week marketing campaign, the property appeared to have sold.

This was the beauty of auctions in a seller’s market: contract certainty.

None of the hassle and uncertainty that plagues private treaty property transactions in England. Adverse survey findings. Gazumping. Gazundering. Indecisive buyers withdrawing offers without penalty. Jittery lenders rescinding financing arrangements at the last minute. Opaque land titles. Property chains.

Instead, there was a simple straightforward demonstration of the free market at work. Real-time price discovery, as a willing seller and a host of prospective buyers hammer out a legally binding deal.

I’d like to say it was an honest process, but this was a real estate deal after all! My inner saboteur was getting antsy, suspecting there was more to this transaction than was apparent at first glance.

Detective indeedably

Rather than going back to bed as I had originally planned, I instead spent a couple of hours doing some long-distance detective work. It might have been the wee small hours where I sat, but that meant the great and the good of the property industry were earning their living ten time zones away.

An auctioneer I had previously dealt with explained the multiple reserve letter game.

One would have been the letter I had signed to put the property on the market. Containing the actual reserve price I had agreed to. This gets used during a free-flowing auction with multiple bidders.

The second letter would have been a fake, dummied up by the real estate agent, containing a vastly inflated reserve price. This would be produced had there been only a single bidder at the auction to establish a high starting position for subsequent negotiations.

The agent would proceed to reluctantly step down from that artificially high price during subsequent haggling with the potential purchaser. Creating the illusion of the buyer landing a bargain, as the price eventually ends up at or above the true reserve number.

Next, I called a property manager who used to work alongside the real estate agent. After catching up about his family and new role, I asked if he knew a couple with the first names I had learned from the live stream?

The property manager laughed. The couple owned an eight-figure property portfolio and were considered the agency’s “favourite” buyers.

Cashed up.


Keen to scoop up any bargains that happen to be steered their way.

Very appreciative to those who looked after their interests. Which created a conflict of interest, as real estate agents are supposed to be working for the seller, not the buyer.

While I worked the phones, an email containing the auction footage I had requested arrived.

I skimmed through the video. The first couple of minutes contained a random collection of disjointed shots, as the trainee tested out various camera angles and vantage points from which to film the proceedings. With each snippet, the number of attendees increased until a small crowd could be seen milling around the front yard waiting for the show to commence.

Abruptly the view changed to the now familiar camera angle from which I had observed the live stream earlier. The auction played out largely as I remembered, with an epilogue showing the winning bidder being led unsteadily into the back of the ambulance, before the scowling agent walked into the shot and berated the trainee to “turn that bloody thing off!

By the time the ambulance departed, the crowd had dispersed. Just two cars remained visible parked on the street.

One was a mid-life crisis special. Probably leased. Slightly worse for wear. Silver. Convertible. Paid parking vouchers and empty coffee cups littering the dash. A vacuum cleaner was barely visible, peeking out between the driver and passenger seats. An estate agent’s car.

It was the second car that captured my interest.

A high-end luxury sedan. Of a make and model jarringly out of place in the local neighbourhood.

Too upmarket for a suburban real estate agent. Auctioneer. Or lowly trainee.

I thought about that for a moment. If the punters had already departed, and the estate agents were still arguing on camera, then who did that expensive car belong to?

Could it be the winning bidder, who had been chauffeured to the local hospital for a concussion test?

I skipped back to the beginning of the recording, watching for when the winning bidder first appeared.

One of the random framing shots taken early on had been pointed towards the front of the house. Visible reflected in a floor to ceiling sidelight window, the winning bidder and the portly estate agent could be seen leaning against the luxury sedan. They appeared to be earnestly discussing something on a piece of paper held by the agent. Smiles were exchanged and the beginnings of a handshake, before the footage abruptly cut to another random framing shot.

I played the segment of the recording again, pausing to take a screenshot when the two men were holding the piece of paper.

Next, I attempted to enlarge and sharpen that still image. No easy task, given the image was a partial reflection and the two men were quite some distance from the trainee’s camera.

Eventually, I could see the rough shape of some text near the top of an otherwise blank sheet of paper. It was illegible, but there was distinctive underlining beneath it.

The underlining sent my inner saboteur into a frenzy. I fast-forwarded through the footage to the point where the estate agent was kneeling beside the prone winning bidder. Stepping through the video frame by frame until the piece of paper fell from his pocket and onto the ground.

Another screenshot. Swiftly inverted. Rotated. Resized to roughly the same size as the earlier reflected image. The shape of the text on the back of the dropped piece of paper was similar. The distinctive underlining identical.

The words “original reserve letter” were discernable in the second image.

To give credit where it was due, the trainee had done a commendable job as a cameraman!

The price of the final bid had been for the exact same amount as the reserve price I had set a couple of days prior to the auction.

Which might have been a coincidence, had the reserve been a nice round number. But it wasn’t.

When combined with the camera footage, it suggested the agent had sabotaged the auction by tipping off the winning bidder as to the exact amount required to secure the property.

No guarantees of course. There was always the risk that some emotional first home buyer, squandering their inheritance via the Bank of Mum and Dad, may have bid over the odds.


A few hours later, the real estate agent called to inform me that the winning bidder had been released from hospital, and he had secured a signature on the sales contract. My property had been sold.

After listening to him blow his own trumpet for a couple of minutes, I let some air out of his tyres by asking a few pointed questions about his dubious trading practices and conflicted loyalties.

To my surprise he didn’t deny the conflict of interest. Nor attempting to rig the auction.

Instead, he simply pointed out that the property had successfully sold for the price I had wanted.

Much to the frustration of my inner saboteur, I inwardly conceded he was right. Without the errant gavel, I would have been none the wiser about the shady practices, and happy with the outcome.

Real estate deals are much like laws or sausages, ignorance is bliss when it comes to knowing how they are made. My inner saboteur and the trading standards body may not like that reality much, but in a largely self-regulated industry, how they feel is of little consequence.

By way of an apology, not for having done the wrong thing but rather because he got caught, the agent offered a heavily discounted sales commission on the transaction.

This property investment had provided an entertaining story and an annualised return on my investment of 18%. The original deposit had been sourced from accumulated equity in other investments, while the balance was funded via leverage in the form of a flexible line of credit.

In other words, it had cost me virtually nothing and earned me plenty.

I’ll celebrate the win, though everyone is a genius in a rising market!

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  1. ryangibsonclever 30 June 2021

    Wow. I never knew this type of ‘shenanigans’ went on?

    Who would have thought it? In any event it seems as though you have come out of the deal with more than you would have imagined having bought the house all those years ago.

    Look forward to the next part of the financial journey.

    • {in·deed·a·bly} 30 June 2021 — Post author

      Thanks Ryan.

      I would like to believe such things are unusual, but have done enough real estate deals to be surprised by little and take nothing for granted.

      By way of illustration, my local neighbourhood provides an interesting case study. A single agent has a virtual monopoly on listings in the area. On the rare occasion that a vendor chooses to list with other agencies, this particular agent subsequently refuses to allow that vendor to view any properties on his book ever again. He transacts enough deals to lead a comfortable existence, but this little bit of power he wields has forced several people out of the neighbourhood entirely. Unfortunately you can’t do business with someone who won’t do business with you, a problem when they control the only game in town.

  2. John Smith 1 July 2021

    Congratulation for the high yield (and good market timing) in investments.
    10 years at 18% CAGR should be celebrated!

    “he simply pointed out that the property had successfully sold for the price I had wanted.” I do not care if someone did something unethical (by whose rules?) but legal, if he helps to fullfill my goals, as reasonable expectations.

    Famines in Africa, deaths due to climate heat in Canada, lack of vaccines in India… Capitalism is not fair (ovarian lottery, rigid markets), only pseudo-democracy makes it bearable (sometimes) to masses.

    I see estate agents as (un)necesary parasites, as long as they charge procent % instead of fix amount for a transaction which even a robot / AI could do it.

    • {in·deed·a·bly} 1 July 2021 — Post author

      Thanks John Smith. I was pleasantly surprised at the outcome, the property prices in the neighbourhood had surged as the infrastructure improved, but frothy market peak at the end certainly didn’t hurt the final result.

      I’ve got mixed feelings about estate agents. It must be a horrible job, dealing with delusional vendors and time wasting prospective buyers/tenants, then trying to obtain and then shepherd a deal through to a successful conclusion. That said, based on my own experiences over the years, their poor reputation is richly deserved given so much of what they do is underhanded and dishonest.

      Providing I had aligned the commercials adequately, it is possible to use their powers for good (for me) instead of evil, but that is easier said than done, particularly if they are playing both ends against the middle.

What say you?

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