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Real Estate Auctions

Has anyone ever attended an absolute real estate auction? I went to one this afternoon. It was quite an experience.

An agent that sits next to me in the office said that she would be going to this real estate auction in the afternoon and invited me to join her. So we hopped in her SUV and away we went. The auction was being held in Venice, FL by VanDeRee Auctions . It was a 3 bedroom plus a den or 4th bedroom/ 2 bath/ 2 car garage, tile throughout, granite countertops, wood cabinets, 55+ community, 2278  sq. ft. under air, built in 2004 and was  in a planned community.

We pulled up to the house and the whole street was lined with cars on both sides. It looked like a pretty good turn out. So Connie (the agent from my office) and I went and started looking around. The house looked as though no one had ever lived there. It was in great condition. As we wondered from room to room she asked me what I would list it for if it were my listing. I told her $399,900. The funny thing was that the previous listing agent showed up at the auction and we started talking to him, and that is exactly what he had had it listed for.

Inside there was probably 50+ people. We saw several agents, a local news station, a couple newspapers and a lot of bystanders. Once 12:30 rolled around Mr. Van De Ree, the auctioneer, got on the mic and introduced himself and went through all of the terms of the auction and the amenities of the house. He said that there would be a 10% buyer's premium, $15,000 deposit on auction day and a second deposit due in 7 days for a total of 10% down. The buyer would be paying all closings costs and closing would occur in 30 days.

When coming in the door people were registering for the opening bid. So when Neil Van De Ree started the auction out he said I have one bid of $100,000 and a three way tie for $200,000. So he started the bidding at $200,000. Out of the 50+ people in attendance only two people in the audience and one person calling in by phone were bidding. The bidding quickly got up to $235,000 and then no one wanted to budge. Mr. Van De Ree went over what a great deal the property was and went over the amenities again and then spoke with each of the bidders. Finally, one of the bidders went up to $240,000. Mr. Van De Ree lifted his gavel and said, "Going once for $240,00, going twice, and one of the bidders chimed in at $250,000. Again Mr. Van De Ree lifted his gavel and chanted the $250,000 price. The phone bidder increased their bid to $255,00. Going once for $255,00 Mr. Van De Ree said, going twice, sold for $255,000 to bidder number 16, our phone bidder.

What a deal! This house that was listed a few weeks ago for $399,900 just sold for $250,000 plus a 10% buyers premium and closing costs. My best estimate is when all said and done they would have bought it for around $300,000.

I was going to look into the auction process for my listings and now I think may start bringing my buyers to the auctions instead. This person sure got a heck of a deal!

So if you've never been to a real estate auction go check one out!

Comment balloon 13 commentsShannon Moore • August 15 2006 02:34PM

Comments

I have not been to one, but Dmitry has.  The home went for more than it was listed for!  Crazy, but true.  It had been on the market for a while.  

We've seen them popping up in the higher end too.  Not always successfully.  There is a home that has been listed here for about 3years.  The sellers just tried the auction.  I don't know what happened but the for sale sign is back up and the auction is over.

Posted by Maureen Francis & Dmitry Koublitsky, SKBK Sothebynulls - Metro Detroit (SKBK Sotheby's International Realty) almost 11 years ago
There have been a couple of auctions here on Marco Island, both with many properties (but with reserve pricing) and both times none of the properties sold.   Now the last one that there was several properties sold after the auction...
Posted by Colleen Kulikowski, Creative Real Estate Solutions... (The Griffin Team @ Keller Williams Realty) almost 11 years ago
I believe auction fees are higher than most real estate commissions in our market.  Which is something to ponder.  Consumers are willing to pay for results.
Posted by Maureen Francis & Dmitry Koublitsky, SKBK Sothebynulls - Metro Detroit (SKBK Sotheby's International Realty) almost 11 years ago
10% to be exact! It`s a shark frenzy and many deal collapse....Sad..
Posted by Scott Daniels Florida Real Estate 2.0. Agents Earn 100% Commission. (Florida List For Less Realty, Inc. Broker/Owner. ) almost 11 years ago
Too many auctions in our area are not true absolute auctions - the seller withdraws the home, etc.  Some of our clients went to auctions and were too disappointed at how they were conducted that they don't attend anymore.  We've had some that were unbelievably successful as well, but it's hard to know in advance which is which.
Posted by Sharon Simms, St. Petersburg FL - CRS CIPS CLHMS RSPS (Coastal Properties Group International - Christie's International) almost 11 years ago

It's an interesting process, but it sounds as if there is a lot of risk for the current owner or lien holder if they expect to get a maximal return.  I'll be the first to admit that I am not familiar with the property auction process, outside of what happens on the court house steps, but would love to lear more.

BN

4MySales.com Agent Success Tools

Posted by Brian Nelso, Brian Nelso (Thneed, LLC) almost 11 years ago

I just went to an auction today.  It was amazing, there were around 80 people bidding, and that auctioneer got $25,000 more then the seller wanted for the property.  His name was Vanderee, and he really did a nice job for the sellers.  The auction was with a minimum, so I guess the seller was happy, since they could have said no to the offer that they got.

 

Jim

Posted by Jim Miller over 10 years ago

A properly conducted real estate auction can bring a seller a quick sell with the terms they want. Homes at auction sell for the true market value. You can learn more about auctions on my active rain blog or here: www.TowerAuctionCompany.com

Douglas Hostetler

AUCTIONEER/BROKER

Posted by Douglas Hostetler (Tower Auction & Realty) over 10 years ago
Wow, this seems like a big trend. We have the same going on in Bradenton. Very interesting.
Posted by Bonnie James about 10 years ago

The auction process is designed to obtain fair market value of any item, including Real Estate. Keep in mind that proper marketing and preparations must be completed prior to the auction in oprder to create a true cross referrence of the pool of buyers. Advertising is VERY expensive, therefore it is not normally possible for an individual real estate agent, nor small local auction company to provide adequate marketing. If the right buyers are not aware of the auction....the selling price will reflect that fact. Our company conducts Auction Events which offer multiple properties at auction, in a quality facility normally just off the Las Vegas Strip, along with an extensive state of the art Online bidding system. Online bidding allows out of area buyers to participate, just as if they were at the event in person. Additionally, properties from any state can be sold and purchased through these events. Due to the number of properties offered, we are able to provide marketing in areas not normally available to individual properties for sale. Massive amount of property details are provided to propspective buyers, All closings are performed by licensed escrow/title companies to insure buyer and seller financial safety. When choosing your auction company to buy or sell through, always verify the benefits and limitations of their service. No one company is all things to all people. Please feel free to contact me any questions you have regarding the auction process. We will not offer legal advice of any kind.

Dave McCormack, Pres.

RealEstateAuctionByOwner.Com , Inc

Las Vegas Office  702) 451-2095

Posted by Dave McCormack about 10 years ago

We were very dissapointed in an absolute auction held in Winchester,KY by Tom Goebel&his auctioneers.Any and all bids MUST be accepted,yet the auctioneer reapeatedly threatened to" shut the auction down and leave" if he didn't get better bids!He was refusing bids!It was very unprofessional ,illegal,and unethical.People like this need to be reported to the state board,and can be fined and/or have their licenses revoked.Please report if you see anything corrupt,don't let slimne like this intimidate or trick you.

Posted by joe almost 10 years ago

Auctions are nothing but a seller wanting to trick you into buying a home for what it's worth.  These sellers are not going to let you steal their house/property.  Wake up, people; this is nothing more than a shell game where the buyer becomes the sucker. 

I went by an auction the other day, and it was a scam.  It was supposed to have a very low reserve.  Well, no one even bidded on the house.  I called the auctioneer to see if I could buy it at the reserve price ($60,000), and they added $30,000 dollars to the price of the reserve (the reserve price was $60,000).  So, you see that the auctioneer had no intention of selling that home for $60,000; he just thought that he could find a sucker to pay him $90,000.  I went to another auction a few years ago, and homes were selling for MORE than their appraisals.  I found out later that the auctioneer owned every one of these properties, and he was, in essence, "flipping" each one; he made a mint off those pieces of junk that the suckers bought from him.  Another thing:  Don't believe a word that a real-estate agent tells you.  And, don't believe a word that they write.  That should keep you from losing your shirt (or blouse).

Posted by frankie over 9 years ago

I went to an auction in March.  The room was packed, I guess that there were 500 people there.  I went to buy a vacant lot near my home, but it sold for more then it was worth.  The auctioneer, Neal VanDeRee sold most of the properties, but a few of them were passed, and so, I guess they did not get enough.  The one I was interested in was absolute, so they did not have a reserve on it.  All in all, it was a fun and educational event.

Posted by Jim Miller (MSV) almost 9 years ago

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