Anyone sold a property at auction recently? - Posted by Ed

Real Estate Investing Auctions
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Posted by michaela-CA on January 15, 2009 at 09:31:21:

Ron,

wasn’t trying to say that it doesn’t work. I’ve seen your other posts and you’re obviously very creative, which is what it takes to be successful in this market.
And if you can make it happen - great.

Just wanted to point out that it’s ‘emotion’ instead of ‘rational thinking’ that brings prices high in these auctions in my opinion.

So, maybe if you find a way to shorten the time span (to keep bidders from cooling down) and find a way to bring emotion back into the picture then you may improve on what you have now.

Michaela

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Anyone sold a property at auction recently? - Posted by Ed

Posted by Ed on January 12, 2009 at 11:28:39:

Anyone sold a property at auction recently? How did it work out? Can you give your experiences and impressions, any suggestions for someone considering selling that way? Thanks.

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Re: Anyone sold a property at auction recently? - Posted by Ron McIntire (Spokane)

Posted by Ron McIntire (Spokane) on January 13, 2009 at 15:06:59:

Hi Ed,

I am a Realtor and I currently am representing 2 properties that I am selling using a modified auction system. I say modified, because I am not setting an auction date, having everyone show up simultaneously and then auctioning the home and collecting cash. Instead, I am advertising the property with a starting bid and a bid ending date. All bidders submit their offers on standard real estate contracts and then on the bid due date we open them. I then go round-robin with all bidders offering each an opportunity to beat the highest bid until all but 1 drops out. Because these are pre-forclosure homes I then submit the highest offer to the lender for a short-sale acceptance. I continue to accept higher bids for the property if any come late to the party, up until the bank signs off on the deal and the property is then marked pending in the MLS. So far, this has primarily brought out only bargain hunters, I was hoping it would work with non-distressed properties as well but with the ones I have tried it on, there hasn’t been any success. Auctions don’t drive the prices up high enough for most retail sellers in my limited experience.

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Re: Anyone sold a property at auction recently? - Posted by michaela-CA

Posted by michaela-CA on January 15, 2009 at 07:25:48:

Ron,

granted, I have not done an auction, but doesn’t that really defeat the purpose of an auction, which is partly to get the ‘competitive juices’ going and have a ‘bidding frenzy’. With each one doing their own bid it cuts out emotions and brings it down to numbers, where I think a lot of success at auctions are due to emotions.

Just my thoughts

Michaela

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Re: Anyone sold a property at auction recently? - Posted by BLCohen

Posted by BLCohen on January 14, 2009 at 20:44:03:

Ed, I like this idea, I would like to talk with you more about your "modified auction’ how do I reach you?

BL
Evergreen18@charter.net

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Re: Anyone sold a property at auction recently? - Posted by Ron M (WA)

Posted by Ron M (WA) on January 15, 2009 at 09:08:52:

This lack of emotion that you speak of could be why this hasnâ??t been effective on traditional sales with non-motivated sellers so far. It is however, working pretty well on distressed properties that I am representing as a Realtor in Eastern Washington State.

For example, I have a 2,800 sq.ft home on 10 acres in an outlying area. No one was even looking at it because of its location, condition, etc. Loan balance is $235K and the really the condition of the home is deplorable. I started the bidding in the local MLS and internet sites at $130,000 and within a relatively short period of time had a $130,000 offer.

I changed the starting bid to $135,000 while waiting for the bank to review the short sale package, and got 2 more offers. I used a round robin bidding system by telephone with all 3 agents and currently have the bid at $150,000 with the bidding still going between 2 of the parties. If it stops at $150,000, I am $20K more likely to get a bank acceptance and I have a history to show the lender as to how the offer was arrived at.

I will continue to accept offers on the property at $151,000 or better until the lender agrees to accept the short sale or counters the offer with a price of their own. I am hoping to drive the price up another $30,000 before then. I think using the round-robin brought the emotion back into the deal, but giving each bidder a day or so to think about it also keeps them thinking logically so that they are less likely to walk-away, before the lender signs off, if they win the bid.

When selling a home on a short-sale as a Realtor, it is common for the buyersâ?? to withdraw before the bank agrees to the deal. My goal here is to stop the foreclosure, give the buyer a good deal and get paid for doing it; getting the best offer possible for the lender is likely the best way of doing that on a rural out of the way property that I donâ??t think anyone would show up to for a quick auction, let alone bring cashiers checks.

Thanks Michaela for your thoughts. I am definitely looking for ways to improve the system so that it will work effectively with more traditional retails sales if you have any ideas. I have actually considered running a more traditional type of auction or using the “5 day sale” system at the end of the process that I am using now.

Ron M (Spokane, WA)