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?
{ 3 comments… read them below or add one }
Irene Hammond 11.13.08 at 8:40 am
Great story. Thanks for sharing John! People see the low low prices the bidding starts at and think the house will go for that price. Like you said, many times the bidding never gets high enough to satisfy the sellers.
John Wake 11.13.08 at 3:50 pm
Irene,
Karl Stauffer with NXT Realtor mentioned auctions that advertised “no reserve price” but then they have an opening bid price that they won’t go below. Sounds like fraudulent advertising to me.
I don’t know much about auctions but these stories have the same feel to me as those mortgage scams during the boom.
Jim Zirbes 11.21.08 at 12:55 pm
What part of “no reserve” does the auctioneer not understand?
It either is or is not…shame on them for such misrepresentations!
Jim
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Jim Zirbes
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