Home auctioneers are back in action - Los Angeles Times
A sign of the distressed real estate market and growing volume of foreclosures, the auction of 92 homes, condominiums and apartment buildings in Los Angeles, Orange and Ventura counties was the kind of event not seen in the Southland for more than a decade. In fact, the company that staged the auction — Real Estate Disposition Corp. of Irvine — came out of hibernation to do it, said its chairman, Rob Friedman.
The winning bidders had to tack on a 5% commission to the purchase price. The discounts were 10% to 20%, according to the article. Given the 5% fee and the inherent risk in buying at auctions, you would really need a 20% to 30% discount from the market value.
“The market is not nearly as bad as it was back in the ’90s,” Friedman said. “We’re having a correction. It’s not going to be a major league correction…. People are getting a discount today, but probably not a huge discount.”
In fact, many of the investors walked without buying because the prices were too steep.
3 responses so far ↓
1 Doug Trudeau // May 21, 2007 at 3:17 am
Good pespective. Sounds like “Buyer Beware.” If the discount margins aren’t high enough and the buyer ends up dumping money into the home, they could end up worse off than the poor individual who lost the home before them.
2 John L. Wake - Realtor // May 21, 2007 at 9:22 am
Doug,
Long time, no see! How’s business in Tucson?
3 Astroz // May 21, 2007 at 10:29 pm
Another bad thing about these auctions is that many of the homes have a reserve price set that is not visable. If you win the bidding and it doesn’t meet the reserve then you don’t win the home.
There was a housing auction here in Phoenix recently and very few were sold because of the high reserve prices. I didn’t see any bargains and I think people are better off following the conventional method.
Leave a Comment