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Realestate auctions a good deal or not, food for thought

I found this on http://countrywide-foreclosures.blogspot.com/

Update: (And thanks Bubble Sitter for posting this)

“US Home Auctions allow SHILL BIDDING. The quote below is right out if their brochure (and this is the second time I have posted this quote on your web site):”

“On page 122 paragraph 3, I quote verbatim: ‘Except where prohibited by law, the Auctioneer may open bidding on any property by placing a bid on behalf of the Seller and may further bid on behalf of the Seller, up to the amount of the reserve price, by placing successive or consecutive bids for a Property, or by placing bids in response to other bidders.’”

“Your advice to be very careful is right on the mark. US Home Auctions wants to get the bidding going and get people invested in time and effort, then PUMP THEM UP!”

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Posted by Andrew Monaghan CRS, GRI, EPro Associate Broker on 03/01/2008 12:42 PM

Comments (7)

reo auctions, foreclosure, the monaghan group

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7 Comments on Realestate auctions a good deal or not, food for thought

MAR

2008

Hi Andrew:

I am an auctioneer here in California. Most auctions that are held, have very savvy attendees, who will not bid up a price on a home that they think is not worth it. Most buyers do their home work, before an auction. Also, many attend with their real estate agents. Buyers attend auctions to get a deal. As far as shill's go you have to qualify to purchase a home by speaking to a lender and placing $$$$$ down as a deposit to be allowed to bid..With out a bid paddle no bid.

Now if you want to talk about ring man or bid assistants that is where I can see where many buyers are being influence.

Lorraine

Shill is illegal and unethical, however in this instance the auctioneer is providing full disclosure of what is going on. It is up to the bidder to decide if they want to bid.

They are having one of these fake auctions in DC next week as well,

"Reserve Price. All Properties have a Reserve Price, meaning the Seller of each Property has established an unpublished, minimum selling price. The starting bid is not the Reserve Price. In order to become the Winning Bidder for a Property, a Bidder must meet or exceed the Reserve Price and have the highest bid, and such highest bid must be accepted by the Seller (see “Subject to Confirmation” section below). Except where prohibited by law, the Auctioneer may open bidding on any Property by placing a bid on behalf of the Seller and may further bid on behalf of the Seller, up to the amount of the Reserve Price, by placing successive or consecutive bids for a Property, or by placing bids in response to other bidders. If no bidders meet the Reserve Price, the Seller is under no obligation to sell the Property"

Why risk 5% down when there are so many identical houses are for sale from the same banks that one can buy with a Realtor and inspections. A real auction has a disclosed minimum bid and no shills. In this auction the buyers give up all their rights and get nothing in return. Realtors can get a whole 1%, but only if the pre-register before the event.

MAR

2008

Are any auction companies or banks doing ABSOLUTE bank-owned auctions?

NOVA - You have read the terms and conditions and now have the option of bidding or not bidding. It is up to you.

Shari - Some of mine are absolute, but it is not the norm.

MAR

2008

Still, it is a great job you did by pointing out the fine print. This really shows you how exuberance and the potential for profit can turn around and bite you when playing in a field of pros. All the more reason to use an agent.

OCT

2008

I am finding that most auction listings are simply part of the posting process by trustees. Most of these are going to end up back with the REO Asset Manager post auction. Most reserve pricesa are based upon the outstanding notes and fees, etc. So many reserves are above market.

I don't know if this helps, but I found a list of auction websites. http://www.laneguide.com/Foreclosure_Trustee_Auction_Websites.asp

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