Agent2Agent in Minnesota>Question Details

Joe Houghton, Real Estate Pro in Plymouth, MN

Just a few of the many curiosities I have about online and live real estate auctions.

Asked by Joe Houghton, Plymouth, MN Tue Oct 12, 2010

Why is the starting bid lower than the reserve?
Is it better to make a formal written offer via traditional means or bid online or bid at the live auction?
Pros and Cons of Auctions in both representing the buyer and representing myself as an investor?

It seems to me that selling your home traditionally via an agent and the mls is the same thing as an auction any commentary is very much appreciated.

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Answers

1
Joe,
I assume that you are speaking of Bank auctions and not public trustee auctions for you questions. I will answer as if the answer is Bank Auctions.

1. Teaser amount is the best I have come up with, but the company can decide to take any bid the owner will allow. In a live auction vrs online, this tactic gets the feeding frenzy going and has been an auction technique for many years.
2. A formal bid works up until a cutoff date. It shows a real committment and will generally be accepted if it meets the owners needs. Once you reach the cutoff date, the auction company will require you to go to their bidding process. This is, in my opinion, where common sense is not the driving factor for the sale of the home. They may also be legally bound to do the auction process at that point.
3. Representing the buyer in an auction will gain (PRO) you a small commission or fee (CON). You must use their forms which may be an issue with your brokerage or commission (CON). The ability to negotiate is small, so you can only advise on what they are getting into. Some E&O insurances require that you work on standard commission accepted forms.

4. Repreenting yourself as a agent/investor should not be an issue as long as you disclose per your state requirements.
Web Reference: http://www.georgelewman.com
0 votes Thank Flag Link Tue Oct 12, 2010
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