Real Estate Auction Fraud – Having no reserve price meaningless if auction cut short

At the the Heart of Scottsdale Realtor Tour today a friend told the story of going to an auction last week for a group of condos in Antigua in McCormick Ranch in Scottsdale, AZ. Many (but not all) of the condos were promoted as having no reserve price.

He said the first 3 bedroom home went for $180,000 which was a good price for the buyer but not crazy. The auctioneer then lectured the crowd about how bids had to be higher.

Next, went up a 2 bedroom home. The ~~sale~~ highest bid was $155,000 which again was a good price for the buyer but not crazy low.

THE AUCTIONEER THEN CANCELED THE AUCTION!

He just shut it down. The many potential bidders complained bitterly, according to my friend, but the auctioneer said he would rather be sued than sell at those prices.

Having no reserve price doesn’t do a buyer any good if the auction is canceled when prices are low.

I bet neither of the 2 homes that were “auctioned” will actually have their ownership transferred. There will likely be some escape clause for the seller.

Do you have any real estate auction stories? Success stories? Horror stories?

November 12, 2008 by Realtor John Wake

About The Author

John Wake

Born in Phoenix, trained as an economist and now a licensed Realtor, John uses hard data from the real estate market to help his clients -- buyers and sellers of residential real estate -- uncover their best choices for finding the right home or finding a buyer for their current home.

Visit Authors Website →