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What goes up may not come down! As in this case!

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Real Estate Agent with Red Rock Real Estate (435) 632-9374 UT DRE# 6541633-SA00

What goes up may not come down! As in this case!What goes up may not come down! As in this case!

 

A beautiful, custom-built 3,000 square foot home was scheduled for auction in several weeks, the starting bid set at $25,000.00. The interior boasted granite countertops, gas fireplaces, city-scape kitchen cabinetry, jetted tub and ceramic tile.

 

Now that being noted, I received a phone call from an interested party asking, "Do you think the bank will accept $25K if the bid goes no higher than that?" My answer was simply "No". I was then asked my opinion on how much it would sell for. I replied, be prepared to "GO HIGH!" because once the price starts going up, it will not come back down. Plus most banks require cash up front and a quick close.

 

  • Typically when you see this type of advertisement, it is used to gain the attention of many potential buyers looking for a screaming deal.
  • What ends up happening is the price gets pushed up, up up, by multiple bidders in a frenzy to gain possession.
  • And what started out to be an unbelievable price is now closer to market value. The bank may be satisfied with the outcome or simply decline all offers if the price is not high enough.

 

A bank auction is not for a meek, mild individual. It requires buying power and an experienced professional who is both market savvy and competent while representing a client's best interests. In my opinion, hiring an experienced REALTOR® is a smart move in the right direction.

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I, Wanda Kubat-Nerdin at Red Rock Real Estate Utah am responsible for my opinions expressed in this blog. Information herein is deemed to be reliable but not guaranteed and may change due to market conditions. Please do not take my pictures or artwork and use them as your own, they are my property and copyrighted.

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Wanda Kubat-Nerdin is a southern Utah REALTOR® assisting buyers and sellers in in the St. George area, Dammeron Valley, Diamond Valley, Veyo, Central, Hurricane, Ivins, La Verkin, Leeds, Santa Clara, and Washington real estate markets.
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Red Rock Real Estate
90 E 100 S, St. George, UT 84770

BuynSellUtah.com
Mobile: (435) 632-9374 call or text
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Claudette Millette
The Buyers' Counsel - Ashland, MA
Buyer, Broker - Metrowest Mass

Wanda:

People need to be cautious about auctions. There is much more to it than meets the eye. To be successful in those situations you really need to do your homework before attending to check on the properties that are being auctioned off. Some people specialize in this but the inexperienced should beware.

 

Aug 13, 2010 11:18 PM
Richard Weisser
Richard Weisser Realty - Newnan, GA
Richard Weisser Retired Real Estate Professional

Wanda...

As a licensed auctioneer, I can tell you that I think that listing a starting bid is indeed deceptive but not illegal in most cases. But all auctions are different, so one must always carefully read the "Terms and Conditions" of the auction.

Aug 14, 2010 12:30 AM
Chris Smith
Re/Max Chay Realty Inc., Brokerage - New Tecumseth, ON
South Simcoe, Caledon, King, Orangeville Real Esta

Wanda, auctioning properties is still very rare in my marketplace, but it is an interesting concept.

Aug 14, 2010 01:19 AM
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Wanda, getting caught up in a frenzy is what makes auctions work. One of my agents had a listing a while back you couldn't give away. It ended up going up on the auction block and you wouldn't believe the number of people who were suddenly interested.

Aug 14, 2010 01:41 AM
Daniel J. Hunter
REALTOR® - New Port Richey, FL

Hate to have to break it to the inexperienced folks.  They get so disappointed, but they really should have known better.  You do not get something for nothing, or even next to nothing

Although we have had some properties sell here for less than $25k.  But they were nothing like what you posted about

Aug 14, 2010 03:32 AM
Elizabeth Weintraub Sacramento Broker
Elizabeth Anne Weintraub, Broker - Sacramento, CA
Put 40 years of experience to work for you

I think these are the same people who send rent money to Nigerians because they saw this great deal on CraigsList.

Aug 14, 2010 03:45 AM
Sajy Mathew
Coldwell Banker Residential Brokerage - Lancaster, PA
Making your real estate dreams become a reality!

I have had a few clients all excited only to find it unbelievable that the home sold for what it did.  I try to prepare them for this.  I have seen it happen many times.

Aug 14, 2010 04:16 AM
Nevin Williams
Fairway Independent Mortgage Corporation - Cary, NC
Senior Mortgage Advisor

Wanda - Sage advice from an experienced Realtor.  Nice job explaining some of the nuances of an auctioned home and I agree, always seek guidance from a Realtor.

Aug 14, 2010 04:45 AM
Li Read
Sea to Sky Premier Properties (Salt Spring) - Salt Spring Island, BC
Caring expertise...knowledge for you!

Auctions are not something that occurs in my area....very interesting process!

Aug 14, 2010 05:56 AM
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Wanda-full post........thank you....

Your picture with the words......says it all...."hire an experienced Realtor" and I would add.. DO IT RIGHT NOW.

Aug 14, 2010 09:10 AM
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate (435) 632-9374 - St. George, UT
St. George Utah Area Residential Sales Agent

Rich, We've had several auctions here and there were a few sales but not many.

Don, The price does spiral upward once the bidding begins.

Thanks Eileen, I looked one up today that had a 5% buyer premium attached to it so it's important to obtain all the facts before moving in this direction.

Craig, Auctions of any kind are for the experienced. If I was buying cattle, I'd have someone who knew his 'beef' there to guide me. It's no different with real estate, hiring  an experienced REALTOR® will be most helpful!

Gerry, I agree, I agree!

Fred, Now, that would be most painful!

Good example Marney, An experienced REALTOR® can be that objective force that some emotional buyers cannot.

Russ, A much desired home will get any offers and it does go to the highest bidder!

Chris, Great analogy! Hire an experienced REALTOR®.

Aug 14, 2010 09:47 AM
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate (435) 632-9374 - St. George, UT
St. George Utah Area Residential Sales Agent

Lou, You are welcome and the best to you!

Yikes Todd! And that could have been avoided by hiring an experienced REALTOR®.

Most definitely John...Buyer representation is highly suggested!

Claudette, There is no luck involved in an auction. It is a strategic action-packed event! Hiring an experienced REALTOR® will serve a buyer well.

Richard, That is wise advice and will benefit all involved! Our industry is detailed oriented so reading the fine print is indeed necessary!

Chris, We have had a few. They are a very interesting event!

Michael, That tends to happen and doesn't surprise me at all!

Daniel, The closest thing to price I could find was an old double-wide on jacks on a rented lot.

Elizabeth, You may be right about that.

Sajy, Some people see the unbelievably low price and go forward without any cares. They are sure disappointed!

 

 

Aug 14, 2010 10:01 AM
Curt Hess
ExecuHome Realty - Annapolis, MD
Luxury Home Consultant, Team Leader & CEO

Auctions are the ultimate test of market conditions. The only time a "steal" happens is when the auctioneer fails to fully motivate bidders to show up. There are usually enough true capitalists in the neighborhood to show up and pay a fair price. Econ101, yes?

Aug 14, 2010 10:02 AM
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate (435) 632-9374 - St. George, UT
St. George Utah Area Residential Sales Agent

Nevin, It just makes sense to hire an experienced REALTOR® when purchasing a home in any venue!

Li, They are a way to gain a lot of attention in a short amount of time on a property for sale by boasting a low starting bid price.

Thanks Richie! I appreciate that and yes...hire an experienced REALTOR®!

Erica, Good point. When several buyers have their eyes on the prize...the price will definitely go up, up. up!

Aug 14, 2010 10:09 AM
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate (435) 632-9374 - St. George, UT
St. George Utah Area Residential Sales Agent

Curt, It true! Getting people through the door is most important regarding an auction event! Highly motivated sellers are necessary as well!

Aug 14, 2010 10:14 AM
Eric Michael
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519

Hi Wanda, That's how a good percentage of buyers that I run across think, until I explain it to them. And even then, some of them don't believe me and go to another agent to get them to put in the offer. Using your auction house as an example, I've had buyers say "since it's listed at 25,000, let's offer 22,500 with 6% back." People are amazing. Listing price means absolutely nothing, unless the listing agent is trying to get sign calls. Then maybe it helps them out.

Aug 14, 2010 10:49 AM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Most of the listings in the MLS are scam "auctions".  They will have a reserve for list or close to it.  We have them in our MLS for $1,000 when we know it will not be sold for that amount of money. 

Aug 14, 2010 12:51 PM
Russel Ray, San Diego Business & Marketing Consultant & Photographer
Russel Ray - San Diego State University, CA

I've been involved in that feeding frenzy a few times back in Houston and just once here in San Diego.

Aug 15, 2010 06:10 AM
Dale Baker
Baker Energy Audits and Commercial Properties Inspections - Claremont, NH
New Hampshire Relocation Real Estate Information

Howdy and evening to you Wanda

Wanda,
bank auctions don't do well in my area. There has been 10 in the last few months, and not one of the properties sold.


Have a good one
Dale in New Hampshire

Aug 15, 2010 12:54 PM
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate (435) 632-9374 - St. George, UT
St. George Utah Area Residential Sales Agent

Eric, Part of the process is educating potential buyers and then going forth with realistic expectations.

Lenn, That should not be allowed for the reason they will not accept anything near that price and it's just to gain attention.

Russel, It is quite a process that requires a certain degree of experience.

Dale, We've had a few here as well. Some properties sold, most didn't.

Aug 15, 2010 02:46 PM