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13 Comments on Do You Read The Terms & Conditions Before Your Buyer Does?
TOTOH, since the property is listed in the MLS, why not just accept legitimate offers in the normal way??
Why re-invent the wheel??
Just because the house is now burdened with the auction process doesn't mean that the sellers wouldn't benefit from a serious written offer, although it appears that the offers attempted were not serious.
That so often happens with homes listed for sale that have the overlay burden of "auction".
Auction companies operate differently, but the process is basically the same. Many auction companies are now doing online sealed bids while it it listed in MLS. But buyers are looking for a deal at auctions, and many don't know they have to add a 6-10% buyers premium to the amount of their bid if successful. Agenst need to have a complete understanding of auction laws in their state. We had a top agent in our Mclean office think he was going to get into auctioning properties, and since he didn't learn the rules first, he started off wrong and almost lost his license.
It has been a learning experience for me as a listing agent as well, kind of like my hands are tied a bit because of the contract between the seller and the auction company. Combine that with me trying to keep marketing to bring in my own buyers for their shot at a "auction deal", and it makes it an interesting process.
And yes adding in the 10% buyer's premium is what confuses most agents as I explain that is not stopping them from getting their commission rather it is guaranteeing them that they do. Buyers do need to be educated as they think that the auction price is their bottom line until we tell them think of your total as offer + 10%.. which in this market, this specific property is still a fabulous deal for some lucky buyer.
And Jeff... just learning here.. do not want to get into this world at all, rather leave it to the experts for now haha...
And yes Lenn, this can go with a legitimate offer early should the right one show up. We are just waiting for those offers to roll in.. and we have a few more on the way!
Auctions started creeping in Naples a few years ago and now they are gone gone gone. When I found out that the buyers agent gets royally screwed on an auction deal, I started slamming down the phone when the Auction Houses would call. No thanks.
with this auction as long as the agent registers their buyer they are protected, and yes that was one of my first questions to see if not only they were protected but I would be as well.
Oh this is my major pet peeve...agents not reading the MLS before doing something. Ugh
Hi Mark, congratulations on your FEATURED post. If the property is listed in the MLS, why the seller wanted to spend more money up front for the auction?
Good discussion. Could you provide a link to the property auction advertisement. I would think it is advertised other than just on the MLS. I think the lack of understanding the auction method of selling real estate is the issue not the method of selling. Thanks for sharing your experience to this point and I look forward to reading an update after the auction. Although the three offers mentioned in the post didn't meet the auction criteria and you had to contact the agents to explain, there were three offers and as you mention a few more on the way. Curious to know if you think you would have received the same activity on the sale had the seller not decided on auction.
Good luck.This is an area i know very little about. Thanks for the education. If I am ever involved in an auction situation I will make sure to read the terms and conditions and have clarity of any added amounts above my bid.
yes pet peeve it is for me too, why put attachments in if they will not review them.
I also advertise it as a property site at www.14024WindFlower.com. and yes the auctioneer has taken the lead and is follwing up with the offers to iterate that the terms and conditions are what the seller dictated and are not negotiable. The buyers can offer anything they want but the T&C gets sent back to the prospect to sign off on so they understand the rules of the auction.
I do recommend two things for agents, one register your client as soon as you are able and two read the terms.
Mark, Great subject and congrats on the feature! One of my clients was excited until he found out about the 10% fee on top of the offer. It wasn't such a great deal after that...according to him. It is pertinent to appear educated if a client wants to take these transactions on.