This is from http://www.blog-auction.com
Downtown Los Angeles (DTLA) is thriving. My good friend Mike has lived there for years and is constantly raving about it. Having the benefit of visiting Mike on several occasions I quickly shared his enthusiasm for the area and decided to look for a loft of my own.
The rest of the world is catching on too. Since I started looking for a pad in downtown, I noticed glowing newspaper and magazine coverage of the DTLA scene. The media is raving about hip, cool, trendy, and foodie DTLA.
MY SITUATION: I frequently visit Los Angeles on business. Iâ€™m there at least one week per month â€“ Iâ€™ve been staying at nice (not the best) hotels. After a year or so of shelling out big bucks for hotel rooms, it occured to me that I may benefit from the areas sliding real estate prices.
It wasnâ€™t long before I found some great areas to live in DTLA for affordable prices.
THE HUNT IS ON: Iâ€™ve got a few bids on short sales in the area. But short sales are notoriously long â€“ and the banks tend to keep you out of the loop. Itâ€™s an untraditional way of purchasing property - no baked cookies at the open house or big hugs from a happy seller.
Iâ€™ve felt in the dark most of the time. I wouldnâ€™t charactorize myself as a â€œseasonedâ€ buyer, but Iâ€™ve bought and sold a few homes over the years so I initially thought that this would be somewhat familiar territoryâ€¦
While visiting an open house in the arts district (east side of downtown) an agent mentioned that the property would be auctioned off in a few days.
THE PLOT THICKENS: I liked the unit, the location and the building. I changed my plans to fly home and extended my hotel stay. I went to the live auction (the one I was interested in was one of about 100 to be auctioned off) with my bank documents, checkbook, and bank check in hand. AND I WON.
My property was among the first to come up for bid. I observed how the first few were handled and within an hour the unit I was interested in was up on the block.
Itâ€™s somewhat blurry what happened next. Kinda like standing at the alter. There were guys in tuxedos in the aisles and a bit of praying going on.
I had a dollar limit in mind and just before the final drop of the gavel â€“ I blurted out my offer.
â€œGreat jobâ€, â€œcongratulationsâ€ and â€œgood luckâ€ were belted out by the staff as I was ushered out of the room by my new tuxedo-clad friends.
THE PLOT SICKENS: Among the reams of documents that I signed was an agreement that my â€œwinning bidâ€ was subject to the sellers approval. I was told that if the seller didnâ€™t accept the bid, I would be notified and all my money would be returned. According to my documents the seller has 15 working days to get back to me.
Several days later I was surfing the web and noticed that â€œmyâ€ property was up on the online version of the auction websiteâ€¦Huh? Is this how they notify bidders that the seller has refused the auction? I immediately called the title company â€“ they hadnâ€™t been notified of the sellerâ€™s decision, nor had the auction-assigned representative from the bankâ€¦
I contacted the online auction company â€“ I was given their legal office contact number and before I could get more questions answered the lady hung up on me. Rather than call their legal counsel (real estate lawyers are so 90â€²s) I checked out the front page of the auction booklet instead. Turns out that fifty percent of the auctions listed on the very first page of my booklet that were â€soldâ€ at my auction were back up for bid along with mine. Hmmm at least Iâ€™m not the only moron in the world â€“ Iâ€™ve got company! I wonder if my fellow suckers already sent out invitations to the house warming party too?
THE POST MORTEM:
I learned alot with my little foray into the auction world. Some points to ponder:
-According to the terms of the auction company, they can make bids on the sellers behalf. In auction terms thatâ€™s called a â€œshillâ€ bid â€“ apparently itâ€™s perfectly legal. It says so right in the disclosure documents that I signedâ€¦of course itâ€™s not legal in states where itâ€™s not legalâ€¦it says that too.
-In some cases (like mine) the seller has an undisclosed reserve price and can deny your â€œwinningâ€ bid, and apparently put it back up for auction without notifying you. That tactic must be legal too. Legality and morality should do more than rhyme.
-If it sounds too good to be trueâ€¦
Win five bucks if you have succesfully bid on and won property. Tell me your success story and I will pay the first ten folks. If youâ€™ve had a similar experience to mine, share it here â€“ it is good therapy.
I feel better already.