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1) They aren't absolute auctions, meaning there is a secret reserve sales price and if this price is not met the sale is cancelled. So you could wind-up with the winning bid only to discover later the bank rejected it for being 'too low'!
2) There is a 5% sales commission for REDC on top of whatever you wind-up paying for the house itself. On $300K that's $15K!.
3) Since REDC does not hold absolute auctions you have no guarantees that the home you're buying is clear of any liens or other debt. In an absolute auction OTOH homes for sale are sold clear of any liens & encumbrances.
4) REDC uses trained agents to put psychological pressure on bidders in order to get them to overbid. They use loud music, constant yelling & other high pressure sales tactics to get people to become excited and lose track of their personal budget. And guess what? It works!
5) REDC auctions allow the auctioneer to place bids representing the seller! That means while yours might be the first & only bid on any given home, the auctioneer can suddenly say "I'll raise another $5K in representation of the seller"!. The auctioneer will in fact keep doing that until the secret reserve price is reached. And guess what? It's legal!
6) REDC also uses other schills (besides the auctioneer) placed among the audience in order to drive-up the bids even further once the reserve price has been met!.
REDC is in the business to make money, not to help homebuyers 'find a deal'. The whole purpose of these sham 'auctions' is to get a group of bargain hunters all together under the same roof at the same time so as to create a competitive bidding frenzy. It's like shooting fish in a barrel for these P'sOS!
Welcome to the USSA, where fraud and embezzlement are an officially sanctioned way of life!
Some auctions are absolute and some have reserves.
Almost all auctions impose a buyer's premium.
The auctioneer's sole purpose is to get the highest price for the property for his client, the lender, now owner.
Any business that does not make a profit doing what they do will not be in business for long.
Sorry you did not get the steal of the deal you had hoped for.
What are you talking about? I never even set foot in any auction as of yet thanks to the fact that I did my research beforehand.
I'm simply posting this here for the benefit of the innumerable stupids out there.
PS
Quote:
Originally Posted by middle-aged mom
The auctioneer's sole purpose is to get the highest price for the property for his client, the lender, now owner .
At a time like this when homes were driven to absurdly overpriced levels thanks to rampant corruption & fraud and considering the huge amounts of inventory available, the auctioneer's real sole purpose should be to unload the house for any reasonable price vs still trying to make an obscene profit!
Last edited by Marka; 12-29-2008 at 09:51 AM..
Reason: edited quote
The auctioneer has a legal responsibility to his client to get the highest price possible. The bidder is not his client.
Unless you think that if you hire someone to sell something for you they should sell it to the lowest bidder, you should understand this.
Does the auctioneer have the legal responsibility to dupe the poorly informed buyers by allowing schill bidding? Does the auctioneer have the legal responsibility to scam bidders by failing to openly disclose the fact that there is a secret reserve price?
If you hire someone to sell something for you at auction they should sell it to the only bidder if that's the case and not bring in fake bidders to try to continue to drive the price up.
Most kinds of auctions, not just real estate (even ebay!) have the option for the seller to have a reserve price and even in some cases to "no sale" an item.
If the auctioneer is stating specifically that they are raising the bid on behalf of the seller, then that's hardly "duping" anyone.
Auctions can be, and frequently are a great deal more complicated than you seem to realize.
Most kinds of auctions, not just real estate (even ebay!) have the option for the seller to have a reserve price and even in some cases to "no sale" an item.
If the auctioneer is stating specifically that they are raising the bid on behalf of the seller, then that's hardly "duping" anyone.
Auctions can be, and frequently are a great deal more complicated than you seem to realize.
Moderator cut: personal attack
First of all; most types of electric chairs will electrocute you which is why you should try to avoid sitting in one. That's exactly the same reason buyers should avoid any auction that has a reserve price regardless of whether it's e-bay or k-schmay because it's not a real auction it's just an organized duckshoot for the sellers, in disguise!
You want to make it seem like it's common knowledge what the difference is between an Absolute auction and that phoney-baloney ripoff that masquerades as such BUT THE TRUTH IS THAT 90% OF AUCTION GOERS HAVE ALMOST NO CLUE AS TO THE DIFFERENCE. Most don't even know there ARE real absolute auctions out there.
You want to make it seem like it's common knowledge what the difference is between an Absolute auction and that phoney-baloney ripoff that masquerades as such BUT THE TRUTH IS THAT 90% OF AUCTION GOERS HAVE ALMOST NO CLUE AS TO THE DIFFERENCE. Most don't even know there ARE real absolute auctions out there.
Well, ebay was an example I used - more folks are aware of auctions than you might think. However, if someone is considering making a large investment in real estate (and just about every investment in real estate could be considered "large"), then it's their responsibility to FIRST either educate themselves on what they're getting into (study up on auctions and the kinds of auctions and what to expect, at the very least, before going to one and bidding) or find a professional to show them the ropes their first few times out (and get the education that way with someone whose job it is to look out for their interests).
What you're not supposed to do is just jump in and then complain when things don't go your way that you didn't know how to play the game and it's everybody else's fault. You take responsibility for yourself and your actions rather than trying to blame others for them.
First of all; most types of electric chairs will electrocute you which is why you should try to avoid sitting in one. That's exactly the same reason buyers should avoid any auction that has a reserve price regardless of whether it's e-bay or k-schmay because it's not a real auction it's just an organized duckshoot for the sellers, in disguise!
You want to make it seem like it's common knowledge what the difference is between an Absolute auction and that phoney-baloney ripoff that masquerades as such BUT THE TRUTH IS THAT 90% OF AUCTION GOERS HAVE ALMOST NO CLUE AS TO THE DIFFERENCE. Most don't even know there ARE real absolute auctions out there.
Good try tho.
What you are stating is that many of those who attend auctions ain't too bright. That is probably true. Same guys who go in and bid REPOs at 50% of list price and feel screwed when they don't get an answer.
Much of the effusive Real Estate sales of REPOs and shorts is less than rational. But there are those dolts who believe they will buy a distressed property for $12,000 today, provide cosmetic fixes tomorrow and sell it for $100,000 on Thursday.
There is one born every minute.
Last edited by Marka; 12-29-2008 at 09:56 AM..
Reason: edited quote
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