Real Estate Auctions, What a Joke

Since when is too little enough?  How many of you have been checking into this new auction craze in real estate?  Have you read the 6 pages of fine print that come with some of these auction houses?  How about the part that reads, "we reserve the right to cancel a sale at any time."  What does that mean?  I've seen too many things go wrong in my carrier to have a buyer sign an agreement that gives the seller the right to kill a deal at any time they wish. 

Some auctions will not clear the title of a property.  Buyers may be responsible for back taxes and existing mortgages.  Buyer beware. 

What about the commissions?  I had a short sale that of course didn't sell.  Ran out of time waiting for the lender to make a decision on an offer over market value, only four thousand less than what was owed on the two loans.  Now the property is up for auction.  I would bet they receive less than half the price of the offer.

The auction company has a sign in the yard.  I call the 800 number and ask a few questions.  They have no idea of the property condition.  Can not supply information about a minimum bid requirement or closing date of the auction.  I would have to go on line and register for information.  I have seen some auction companies charge a fee to register, the operator does not know if there is a fee to register. 

To make a long story short, the commission on these properties is between ½ and 1%.  This is one case where too little provided me with enough information to help me decide to ignore auctions.  Do I need to mention the fact, it would have cost me more to write an offer, than the auction house was willing to pay for my services. 

I might consider a Buyer Agency Agreement, having the Buyer pay my commission.  I use this on occasions such as City of Milwaukee owned properties sold at low, low prices.  But the city pays a 5% commission. This is more of an issue of principle than income.  Auction houses do not belong in the Real Estate market.