As always, thanks to L for forwarding me his bulk email! Among last week’s collection of get rich quick seminars and Costa Rican condos was an ad for this auction:
One of our regular posters, SteveC, attended the auction and sent us his report. If you are thinking you will read a tale of buyers picking up properties for pennies on the dollar, think again:
On Saturday June 16th, I went to the home auction at the Marriott on 44th St and McDowell. The first thing that struck me was the sparsely filled parking lot. I registered as an observer. The auction staff was very accommodating and friendly. It was held in a ballroom that could seat several hundred of people. I estimated there were between 75 and 100 people present. I am no genius but my first impression of the crowd was……ain’t no buyers here. I sat down in front of a husband and wife with their two kids and started chatting with them. They have a home in Gilbert that was entered in the auction.
At times in my life, I have been a horse trader. My understanding of an auction is that when you win the bidding on a horse, you load him in your trailer and head home. This was a little different. Each home had an opening bid amount, clearly stated in the auction brochure. EVEN IF THE WINNING BID EXCEEDED THE OPENING BID AMOUNT, THE SELLER HAD THE RIGHT TO REJECT THE BID. As a buyer, if you won the bidding and exceeded the opening bid, you didn’t know if you bought the home or not. Buyers had to bring a $2,500 deposit in order to bid. Sellers were committed to nothing.
I watched about 30 homes go through the auction. Some went slightly over the stated opening bid amount. Some did not reach the opening bid amount. The family sitting behind me expressed their expectations. The opening bid amount on their home was $390,000. They were looking for $516,000. When they saw how the bidding was going on the early homes, they realized they were not going to sell. I saw their neighbor’s identical home auction in the very low $400,000s. It is currently on the market for $569,000. I do not know whether they accepted the auction bid.
When I left the ballroom, there was some very loud complaining in the lobby, it was bordering on screaming. A seller was accusing the auctioneers of having "shill" buyers in the audience. He told me that his home had sold in the auction. When he went to the bookkeeper, she told him it had sold by a phantom bid and it wasn’t “really” a sale. I do not know if this is true, but this is what the seller told me.
Other home auctions require a large deposit and the balance within 24 hours. In this auction, a buyer could apply for a loan after the auction. In fact they had a loan and title company present.
The next auction is being held in September, for those who are interested.
Thanks Steve!
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Sounds like a sham. That seller that thought he was being rooked had better get set for a dose of reality.
Not a sham so much as an idiotic scheme contrived by some “genious realtor” (oxymoron) designed to appeal to desperate sellers. Some day soon the sellers will figure out the only real auctions in this city take place on the courthouse steps. But, I guess, if you hear what you want to hear from a guy who promises he’ll put your property in front of a “large group of ‘buyers’”…
BTW twist, loved your story in the Repugnant. I’m waiting for the Catherine Reagor feature interview…followed by the Catherine Reagor column dismissing you as a doomsayer…after all, (in my best Jack Palance from ‘Batman’) RE in the VALLEY has PROVEN to do NOTHING but GO UP over TIME.
Agnostic-
My favorite part of the Republic’s article was the layout of the print version-
The headline was Valley Realty Bloggers Generate Strong Opinions- But Beware, then my picture was right underneath. I thought the effect was kind of like a wanted poster!
So here’s the real deal; No one there is preapproved. Any ‘sale’ will be listed as a sale, skewing the numbers in the neighborhood once again. Two months from now they’ll do it all over again, and show it as a ‘sale’ again. No one at these is ever preapproved and the observation of ‘there are no buyers here’ is perfectly accurate. I’ve been going to these for many years as entertainmnet. If 10% of the homes ever do sell becuase of an action initiated at the auction I’ll be flabbergasted.
The people who go to those; the sellers, the sellers relatives, the sellers neighbors, people turned down at every lender they’ve ever been to, dreamers, borderline homeless, potential lotto winners, shills, and me.
Please consider them more of a dog show than a sales vehicle.
Sellers are still crossing their fingers and hucksters are still selling scams like “Sell Your House In 5 Days” which claims that you can use the auction mentality and excitement of the bidding process to lure buyers into paying a higher price for your home.
I wish the sellers luck hooking the next big, dumb homebuyer fishies, but I can assure them that the pool or dumb potential buyers is pretty much fished out.
This fake auction fad will pass too, as we work our way further into the slump.
NVMike-
They had the homes listed on the website before the auction, and their reserve prices. I didn’t see any prices that looked like killer deals, but it sounds like sellers expected these prices to create a bidding frenzy.
Delusion remains epidemic.
agnostic:
>>Not a sham so much as an idiotic scheme
Did you read the end of the article? Sounds like a sham to me. Or is it perfectly okay to have a “phantom” bidder in the audience trying to push up prices (then, when he accidentally has a winning bid, refusing to pay because it wasn’t “really” a sale)???
“A seller was accusing the auctioneers of having “shill” buyers in the audience. He told me that his home had sold in the auction. When he went to the bookkeeper, she told him it had sold by a phantom bid and it wasn’t “really” a sale.”
Together with the fact that the sellers have the right to decline any final sale price, this is not an “auction” by any means.
Mike -
(chuckling) …and never was an auction, any more than a Pulte “Sale” is a Sale. I guess everything depends on your perspective. It’s a sham until some guy who is such a tool shed he is Home Depot actually makes a live bid and buys a place (in which case it is a “brilliant marketing strategy”). Not that that will ever happen. But the organizers and the sellers are PRAYING there is somebody out there dumber than they are.
If you look at it from the perspective of a potential buyer who thinks he is going to go in and steal a property for 50% of comps or something, I mean, sheesh. It’ll be a while before the 4500 sf DC Ranch houses come to the market at 295k.
By the way, if anybody is looking for the next bull market out there, it is in stripper garb. Not to upset anybody’s sensibilities on here, but the number of realtors turned strippers so they can pay for (1) nursing school, (2) their upside-down interest-only bump, and (3) the X5 is parabolic and now off the 10-year chart.
I think you could also make money off these girls by putting up a gas station just this side of Wikieup, because they have to refuel on their way to Vegas on friday nights. Those X5s do drink a little gas. And have some Red Bull in the cooler.
Perhaps the auction company logo should include an image of that doll that people bury in their yards?
Or each seller gets a free doll to hold at the “auction” while their property is on the block?
agnostic -
Funny stuff!
Seriously, several months back a friend of mine sent me a link to an unbelievable personal ad in Craiglist (San Francisco page, I think?). No, it’s not that I’m looking – it was the hilarious content that was the reason he sent it to me.
Basically, it was an “adult” personals ad by a lady realtor. To put it in tamer words than she did, she was looking for home buyers to connect with, because lets just say she gets “hot and bothered” when making a sale, and was looking for buyers to enjoy that with her (when they buy through her).
I didn’t really consider posting the link or story here, because it was definitely racy stuff. But I had to shake my head in disbelief – I never thought that Real Estate and the Wolrd’s Oldest Profession ever had anything in common up until then…
Asset Hunter-
That would be a statue of St. Joseph. I did a post on a company that was claiming to sell virtual St. Joseph’s awhile back- you send them the money and you dont have to bury it or pray or anything- bulk discounts for realtors, etc…
I cannot tell you how often someone is Googling How to bury St. Joseph or the name of the saint you bury to sell your house and comes by and reads that post.
M told me that they have a basket of them available for sale down at ARMLS- just in case anyone needs one!
Also seriously, there was/is a mortgage broker in Vegas, same thing, advertised in the Craigslist personals about the “benefits” of doing your refi with her…no word on whether it was for “cash out” refis only…at least she’s in the right state if her day job doesn’t pan out ???
That burying St. Joseph is a great idea – it might get people to dig harder for the diamond mine everybody has in their back yard!
MikeC-
Oh dear. I could just hear Keith at HP if he ever gets wind of that one!
I’ve run across some odd stuff on Craiglist, but that tops the ads I’ve run across!
the problem once again out loud, people still think that Joe down the street sold his house for so many dollars and they should be able to get the same for their’s too. when are people going to understand no one can afford the payments on a 500,000 house. One has to earn at least 160,000 a year to purchase a house conventional at that price. The people were just too greedy (spurred on by developers). People are going to have to bite the bullet and ask for less. But if people want to sell a house so that they can buy another one they like more but need to make a little off their house now in order to get the new one, no one wants your used house they want a new one if the prices are basicly the same. What a mess.
I still stand by the word “Sham”. These guys are trying every trick ion the book to get the buyers out.
Ouch! That’s gonna leave a mark. One second: SOLD!, a minute later: Sorry!
This “auction” was clearly one big scam.
NVMike-
I would have to say that it sounded more like a “mixer” than an auction- with an incompatible guest list. You’ve got sellers with hopes of sky -high bids and buyers looking for bargain basement deals.
However would you come up with a seating arrangement?
Twist:
>>Oh dear. I could just hear Keith at HP if he >>ever gets wind of that one!
(Sorry, who is Keith at HP?)
>>I’ve run across some odd stuff on Craiglist, >>but that tops the ads I’ve run across!
I think it is the oddest thing I have seen there too. I mean, I know some real estate agents are desperate for a sale, but really…!
Sorry about that- I was referring to our friend Keith at Housing Panic. It brought to mind one of his favorite terms.
[We love you Keith!] : )
Two things I have learned to never buy at auctions…..houses and horses.