Real Estate Auctions Continue to Gain Acceptance Nation Wide

April 6th, 2007 by PA - Bloger

If you thought real estate auctions where only for emergency liquidation, foreclosure or bankruptcy, think again. In today’s challenging real estate market real estate property auctions are a growing trend and one of the fastest growing weapons in the quiver of tools that home builders, lenders, developers, as well as single family home owners can use to get the price they want, faster and with less worry then ever before. 

Real estate property auctions are the fastest growing method of real estate transactions in the USA. Any negative stigma is changing due to a combination of trends that impact the way people think about auctions. The quip, “Yeah, I bought it on E-Bay”, has become a party joke punch line, yet it tells of a growing acceptance of auction as a legitimate way of doing everyday business and finding what you want at a price you want to pay.

On March 25th, Arizona Republic reporter Dianna M. Náñez wrote, “More than 50 percent of the 88 Valley homes up for auction Saturday in downtown Phoenix got bids that met or exceeded the sellers’ minimum price.” According to Náñez, all sellers got to approve the final bids.  “As traditional real estate sales came under pressure in the recent slowdown, property auctions for houses have become one way for sellers and brokers to generate both buzz and, hopefully, closings.” Prior to any slowdown, auctioneers reported that a non distressed real estate auction communicated to the buyers properly fair just as well, if not better, than a traditionally negotiated transaction through a real estate broker and certainly a lot better than a for sale by owner.

RSI Media reports that real estate auctions are coming of age in Maine. The RSI Media article offered auction enthusiasts positive comments. “With an auction, you get a higher price — fair market value or better,” said Farmington real estate broker and auctioneer Adrian Harris, owner of Harris Real Estate, Appraisal and Auction Service. The report went on to say that, “His wife, Debra, said many sellers prefer the auction method. It eliminates having to constantly show your property. There are two open houses and a showing on the day of the auction and that’s all. People like that.”

While the traditional real estate broker contract and MLS sales listings won’t disappear any time soon, real estate property auction is a real estate sales technique that is here to stay, in good times as well as bad. Now when you show your new home to admiring friends, in the middle of the tour of the master suite and that clever built-in entertainment center, you may find yourself saying, “yea, I bought it at a property auction”.

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2 Responses

  1. Patricia says:

    I recently purchased a home in Phoenix at an auction conducted by REDC, Real Estate Disposition Corp. When I entered the auction area, large speakers blasted upbeat disco music. During the auction about 5 young women, obviously employed by REDC, clapped during the bidding. The houses I had originally been interested in all sold for more than I was willing to bid, however, late in the auction one of the properties I liked was again up for bidding. Apparently the original bidder had not qualified. I bid on the property and won the bid. I was delighted. It was a 4 bedroom model home in Maricopa. I had looked at the three models in Maricopa Fiesta and I had very much liked both 4 bedrooms so when they announced that a Maricopa Fiesta 4 bedroom, 2 bath was being acutioned again, I jumed on it. The next morning I took camera in hand and went to view the home for pictures only to learn that I had bid on the adjacent home, not the 4 bedroom. The auction had misrepresented the property as a 4 bedroom, 2 bath in their flyers as well as during the auction itself.

    Be very careful. I am currently negotiated with REDC and the seller, Frontier Homes, to get my $5300 earnest money back. I have no interest in a 3 bedroom home. REDC and Frontier homes acknowledge that mistakes were made and the house was indeed represented as a 4 rather than a 3 bedroom, however, they are playing “hardball” and after a week of talks, it looks as if they will NOT return my funds. And what are my options? I can sue them. I can go to the Arizona Republic Newspaper, TV, Internet, etc., and I will be doing just that. No one should have to endure what I have over the last week.

    Patricia Arnold

  2. Tom says:

    You definitely have to watch out for “non distressed real estate auctions” where opening bids are meaningless–often low to encourage up-bidding–especially when one discovers there is a reserve price. The seller holds the right not to sell. Much different than “distressed real estate auction” where the opening bid could very well be the winning bid. Also, double check the auction item particulars. I just checked into a REDC Las Vegas auction–found 3 title/address/problems, location maps that don’t jive, etc. And there often is no one to comparison shop in the heat of an auction transaction in terms of the variety of mortgage loans/terms available–just what is offered at the auction. Be very careful.

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