Property Auctions

The properties will sell for less than if the properties were listed with a realtor because the buyer is paying a 10% buyers fee over the sales price to the auctioneer (twice the standard commission.) Didn't find info if the seller also pays commission but assuming they don't so they can sell for at least 5% because the buyer is paying the commission and then some.

Cork-
In some respects you may be right. However, by utilizing the auction method of marketing we can predict when the property will sell & close. If the seller considers current market conditions, they can then estimate the dollars that will be available to re-invest upon closing. Our sellers consistently report to us that, considering the time-value of money, the predictablility of the sale date & value acheived significantly exceeds the "perceived loss" of that extra 4-5%. How long would you want your money to sit idle?


I will be surprised if the sellers take significantly less than they were prepared to take minus the 5% commission. If they get 5% less, the seller pays 10% more. The seller gets the same and the buyer just paid 5% more. 😱

Not necesarily. See above, and other posts.
From their website:

"Within all of us is a tremendous need to win. All interested parties are "forced" to make a decision. Excitement and motivation are used to the fullest with a public auction. Professionally trained ringmen apply continuous motivational pressure to the buyers to gain every dollar possible. This sense of excitement works to create the psychology of impending sale." :nono1:

Cork-
Like you, I represent the seller. Our fiduciary responsibility is to the seller. By the same token, we must always treat our buyers with respect, otherwise we have no buyers for future sales. Our buyers will only pay what they are willing to pay. When was the last time you told a buyer they were paying too much for your seller's property? If the seller and buyer both agree to a dollar value by virtue of the bidding process, then everyone wins.

A ringman's job is to ensure that the buyer and seller both understand the process and the interest in achieving mutual goals.

Might as well throw in the liquor. Is there any difference? :rolling:

Huh???

The standard FAR contract has a clause which allows the buyer to get out of the contract if the appraisal doesn't come in as high as the contract price.

Cork-
We provide notice well in advance of the sale, and property information packets are available upon request.

In our experience, astute buyers are not interested in "our" appraisals. They are free to order their own before the auction, or after. The same applies to mechanical inspections (See below). We will make the property available on request. Astute buyers will know the market and consequently will apply their own value to the property. The only appraisal that is worth anything is the one that someone is willing to write a check for. Please bid accordingly.


How bout the right to inspect? In a standard contract, the buyer has the right to have an inspection by a professional and the seller generally pays up to 1.5% in waranteed repairs and 1.5% for wood destroying organism damage.

I'm sure that you are aware that there are actually two FAR/BAR contracts. One is with right of inspection/cancelation, and the other is "As Is". As indicated above, prospective buyers may visit/inspect the property upon request, and do so with or without the professional of their choice. We are selling "AS IS". Please bid accordingly.


Of course no financing contingency if it's a cash deal.

Correct. Your bid packet should provided enough information for you to pre-qualify with the lender of your choice. Please bid accordingly.



How bout seller's DOC stamps and title insurance? On $500k, sellers doc stamps are about $3500, buyer's doc stamps are about $1700 and seller's title policy is about $2550. Who pays that?

A copy of the Purchase & Sale Agreement, including these terms, is included in the bidder's property information package. This information will also be covered in opening remarks on sale day. Please bid accordingly.

It will probably sell for quite a bit less if buyer pay 10% buyers fee plus all closing costs.

No different than any other deal. Please bid accordingly..

Would also be nice to know comparables - sold prices not list prices.

Buyers typically research their own comps. We prefer this as there is never a question of legitimacy.

Does the buyer get a chance to review the contract prior to purchase?
If anyone knows these answers, please share.

Yes, as noted above, it is included in the bid packet.

Once the property is listed in the auction the buyer has several weeks to look at the property and have it inspected if they wish to do so, however there is no contingency associated with this. Please bid accordingly.

The buyer pays a 10% buyers premium on the bid price to create the contract and/or sales price. Seller provides deed and orders title insurance. Buyer would purchase that insurance and pay doc stamps on the deed. Close in 30 days. I hope I have answered the question.

I am checking with our I.T. department about this issue.

I have beeen hearing that some auctions are experiencing low turnouts and in some instances not one bid even reaches the reserve minium so nothing sells.

Dear Ecopal,

This could be attributed to marketing capabilities of the respective auction company, desireability of the property, local market conditions, overall economic conditions, as well as many other things.

Above all else, the seller has to understand the what the market will bear (supply & demand), and the buyer has to know that the seller is motivated.

Regards,

To all,

Thank you for your questions & concerns. Due to my schedule over the next three days I may not be able to keep up with this forum and may answer questions from multiple members in one response. I will try to respond to all posts twice daily thru Friday morning, but if you don't hear from me please contact us at Higgenbotham Auctioneers. Our number is (800) 257-4161.

or
http://www.higgenbotham.com

BTW, You can only register to download bid packets on our website. it is not a place to register to bid.

We look forward to seeing you all at the auction.

Signed,

A "Professional Ringman" 😀

BTW,

To all R/E brokers & salespeople:

We pay (from our commission) participating brokers/salespeople who are registered by their buyers in advance of the auction.

If you believe you have an interested party please call our office, ask for Karen, and let her know you need a BP form for the North Florida sale. She'll provided details and fax it to you right away.

Karen Jones
(800) 257-4161
8:30-5:30 EST

Actually, auctions are quite common these days. We've had them here for years. Now if you see a list of foreclosures in the area - let us know ( absolutely:roll: ).

Amp,

You're absolutely right! In 2005 Higgenbotham sold right at $100 Million worth of real estate at auction throughout the U.S.

None were due to foreclosure.
None were due to bancruptcy or distress.

The auction process is merely another method of marketing.

Cork-
Like you, I represent the seller. Our fiduciary responsibility is to the seller.

Sounds like dangerous legal grounds on your part to say this, unless of course, you are acting as a Single Agency, where the Broker is the fiduciary. You should not assume that Cork works as a Single Agency Brokerage, because most agents in this area are not Single Agents, but Transaction Agencies.

By the same token, we must always treat our buyers with respect, otherwise we have no buyers for future sales. Our buyers will only pay what they are willing to pay. When was the last time you told a buyer they were paying too much for your seller's property?...

You cannot lawfully tell a buyer that unless you are working as a Single Agent, and then you can say it and should if it is true, if you have their best interest in mind as required by the Realtor's Code of Ethics.

We are selling "AS IS". Please bid accordingly.

You mention that the buyer has the right to inspect the property after the purchase, but if the contract is "as-is," that leaves the buyer in a bind if it is not to his or her liking. Is this correct?

Sold!!!

Sounds like dangerous legal grounds on your part to say this, unless of course, you are acting as a Single Agency, where the Broker is the fiduciary. You should not assume that Cork works as a Single Agency Brokerage, because most agents in this area are not Single Agents, but Transaction Agencies.


You cannot lawfully tell a buyer that unless you are working as a Single Agent, and then you can say it and should if it is true, if you have their best interest in mind as required by the Realtor's Code of Ethics.



You mention that the buyer has the right to inspect the property after the purchase, but if the contract is "as-is," that leaves the buyer in a bind if it is not to his or her liking. Is this correct?

Joe,

I'm smiling, too. I stand by all earlier responses. Please re-read each question by Cork in the context which it was intended, and my reply to same.

The auction process is fair, open to all, and works well. Conventional brokers can reap the benefits, and are certainly invited to participate.

It is not my intention enter a debate forum, but only to answer legitimate questions about these properties and the auction process. We look forward to seeing each of you there on Saturday. Remember, you only pay one bid more than the last guy.

I just remembered, auctions are not required to provide the Agency Disclosure to a customer. Please bid accordingly. ;-)

There is nothing wrong with an auction, if the buyer is very informed of the contract and the property, and he or she knows there is no out to the sale.

In the ECAR (emerald coast assoc. of relators) listings, for the last six months, there are two condos which show as sold in auctions in SoWal. Either the properties are not moving, or the Auction people are not properly recording them with ECAR.

If they are not selling, I read a bit of fluff. ;-)

FWIW,

The five houses being sold at auction on Saturday will be open one more time for preview from 9:30am-10:30am Saturday morning. The auction will be held at 11:00am Saturday March 4 at Cafe 30A.

This auction was actually put together by Jim Phillips and Michael Harbin of 30A Realty and 30A Auction Services. You are probably aware that they are both SoWal real estate agents. You may not have been aware that they are also quite familiar with the auction process.

You are welcome to call Michael or Jim at the following numbers. They'll be glad to answer your questions and/or show you the properties between now and sale time. You may also call me or Laura Whitt at the 800-number below if you have any questions specifically related to the auction process.

Jim Phillips' Cell 850-276-1316
Michael Harbin's Cell 334-233-2362

We look forward to seeing you at the auction!

Regards,

Scott Oglesby
Higgenbotham Auctioneers
Lakeland, FL
(800) 257-4161