Monday afternoon, February 9, I went to an auction being held in the Sunset District of San Francisco. The home was a typical 2BR/1BA single level over a full garage, with a pretty, landscaped little garden in the back. The home was on a short lot, being near a corner. Debt owed was said to be $705K. Over 100 bidders showed up, with their family and RE agent. Asking was $349K, and it was apparent that the house would go for more than asking.
There was the listing agent, several other people who checked that every bidder issued a bidding number had a letter of loan approval and a blank purchase contract, and another person who helped to spot the people committing to the dollar amount at each level, and was filming the crowd. It took me a few minutes to realize that this last person was documenting who made the offers on each level of bidding.
When the bidding actually started, it took less than 15 minutes to get to the selling price of $775K! The agent conducting the auction said this would not be done in a rush, and it wasn't. However, I believe the crowd did get caught up in the excitement of the auction. My partner's client had set her upper limit at $600K, repeated it to us several times, yet bid $50K higher than that!
The top 5 bidders were asked to come back into the home with their contract and their agent. Each of these bidders had bid over $700K. The listing agent said that it was possible for an absentee bidder to fax in a higher offer after the agent returned to the office, so the high bidder at the location was NOT guaranteed the house. Conversely, a high bidder could change his mind by the following day and have all his earnest money returned to him, with no penalty!
When I described this auction to my broker, he said that this auction method was the technique that this particular agent/agency used to sell their listings. My agency is more traditional in their marketing. How about yours?
Comments(4)