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Real Estate Auctions
- Thread starter Spencer
- Start date
I bought a property in Park City, Utah at auction a little over two years ago. It was a developer closeout auction on a condotel property. The initial fees were only about $100 I think to register and participate in the phone auction part for all out of state participants (others were live at the auction site).
Premium was 10% of the bid, which you just need to factor into your bid to determine if that is a price you are willing to pay. I thought I got a great deal and appreciation since then has proven all prices at that particular auction to be a steal (so far).
Premium was 10% of the bid, which you just need to factor into your bid to determine if that is a price you are willing to pay. I thought I got a great deal and appreciation since then has proven all prices at that particular auction to be a steal (so far).
OnMackBayou
Beach Lover
I was speaking with a friend of mine earlier today. They inquired about selling their SoWal property through Roebuck Auctions. They owe about $700,000.00 on it, and have lowered the asking price to about $775,000.00, down from their original asking price of around $850,000.00.
Roebuck told them they require a non-refundable $7,500.00 listing fee to sell at auction, and that they could expect to get a bid of around $500,000.00 at the sale.
I assume this means the auctioneers get money up front, and an additional % if the property sells. In this market it seems like a great deal for the auctioneers and the buyers. If you're a seller, be prepared to get bottom dollar if you decide to sell this way.
Roebuck told them they require a non-refundable $7,500.00 listing fee to sell at auction, and that they could expect to get a bid of around $500,000.00 at the sale.
I assume this means the auctioneers get money up front, and an additional % if the property sells. In this market it seems like a great deal for the auctioneers and the buyers. If you're a seller, be prepared to get bottom dollar if you decide to sell this way.
The upfront fee is for advertising. If they have 6 properties in a single auction, they may have a $60K budget. My understanding is they take that 60K and split it up among the sellers depending on value of the property. The 10% is a buyers premium. If they bid $500K, they will write the contract for $550K. The seller doesn't pay it. It's not always a bad deal for the sellers. Of course, the deciding factor on that is going to be when they bought and how much they paid. If your friend had paid $300K for the property, and it brought $500K at auction, it wouldn't be such a bad deal.
Spencer said:
The problem with auctions is that many people think an auction will change market fundamentals...which it usually won't. The best way to sell a property is to price it so that it's attractive to a buyer. In today's South Walton market, that means turning the price clock back by about 3 years and get the widest exposure possible, and that's usually by listing with a Realtor. Say what you want about Realtors, but they're the ones with the buyers. Unless you just want to unload a property at any price --- and it's done every day by estates and other circumstances --- I think an auction would be a terrible way to sell property in South Walton under current conditions. Just my opinion.
OnMackBayou
Beach Lover
I understand the % on the back end is paid by buyer. I guess what I should have said is this is a good deal for auctioneers, buyers and advertisers.
I've been doing some research on this and have seen a lot of different views. One of the main points the auctioneers are making is that there is no better way to set a price on a property than having 10-15 people competitively bidding against eachother. A property is worth only what someone is willing to pay for it. What's your view on that?
Diane4145
Beach Fanatic
Spencer said:
I've dated a VERY successful Auctioneer,( another story...
won't bore ya) that works all over. He's known for his audience participations and that's the biggest advantage, in my opinion! He can pull money, out of a rabbitt's ****!:clap_1: :clap_1: :clap_1: Anyone interested, PM me.
Smiling JOe
SoWal Expert
From what I am seeing and hearing at auctions, there are not 10-15 people bidding. Most of the time, there may be 2-3 bidders, and I know of plenty with one or zero bidders. Are you suggesting that your auctions are different?Spencer said: