BUYER TO AGENT: Is this a good time to buy a home? I've heard that there are some really good buys in foreclosures, auctions and short sales.
AGENT: Could be. But, foreclosures, auctions and short sales might not get the best home for your family in the location you need. Think about what you really want to buy for the long term.
BUYER: O.K., but show me all of the foreclosures, auctions and short sales first. I'm sure I'll find a good one.
AGENT: How about this foreclosure? It's priced about 5% lower than other homes in the neighborhoodd.
BUYER: Are you kidding me? There are no appliances. The landscaping is dead. I can see the high water mark in the basement. Do you know how much money it would take to put this home in shape to live in? What's going on here?
AGENT: We'll go to the auction for this one Tuesday.
BUYER: Are you kidding me? The agent had the house listed for $492,000 but the auction started at $700,000. You showed me the comps for $690,000. The people are still living in the house. What kind of "auction" is this? What's going on here?
AGENT: How about this Short Sale? It's the only one in the area of your children's schools.
BUYER: Are you kidding me. The comps on this house are $425,000 and the thing is listed for $499,900. The owner is so far behind they might as well let it go to foreclosure. What's going on here?
BUYER: Is that all there is?
AGENT: What about this new listing in your price range. It's in the right school area. I looked at it last night and it's got everything you want.
BUYER: O.K. We'll look, but I want a good buy.
UPDATE: 04/14/2008. AUCTION MARKETING HAS BECOME MORE POPULAR AS A WAY OF SELLERS TO GET MORE EXPOSURE FOR THEIR HOME FOR SALE. While many homes listed as "auctions" are not expected to bring far below market, there are some good buys to be found in real estate auctions, particularly the "absolute" auction.