Auction Company that buys the property

By
Real Estate Agent with Michael Saunders & Company

Have you heard of an auction company that will buy the property from the seller at a pre-determined price if the property does not sell?  Gulf Front Condo

Well, I was contacted by this auction company on one of my condo listings over $1,5m  - they only go after properties over $750,000.   I thought this process could be a useful tool to sell this property or at least justify a price reduction.   Wrong on both counts. 

$811,000 is the value they would pay the seller if it did not sell at auction and they felt it would sell at auction for $1.1m.  Also, the seller only gets 50% of the difference between $811,000 and the sale price, if the property sells at auction.  On the upside the seller is free of the property on auction day - no matter what.  I guess this could work for some sellers.  

I did go over the process with my seller but the $811,000 sale price was so low that the process lost all credibility.  

 

Comments (1)

David Saks
(retired) - Memphis, TN

I went to an estate sale Saturday and saw an antique guitar pickup on a bric a brac table that I could have used with an old guitar. The estate host saw it and grabbed it from me and said he wanted it for himself but that he'd give me an even bigger discount on anything else that I wanted from the table. I told him he knew where he could shove the guitar pickup and the estate sale. I left with most of the money I arrived with, happily, although I did snag three beautiful antique radios.

About your auction company; the sale price difference would have been 289k in this case and the seller would have netted an additional 144.5k at 50% of the difference in the auction realized price based on the auction companies prediction o 1.1m, therefore realizing a total of $955,500 for the seller if they had done business with the auction company. Even at that, it was still pretty low as opposed to 1.5m.

Proof that many are still searching for something for nothing in this unhinged economic climate.

Nice post, Edie.

Jul 22, 2008 04:54 AM