Auction.com is trying to break into the traditional home-selling business.
I believe that the open-bidding format is the most transparent home-selling process and will someday have a place at the table. But auction.com comes from the old-fashioned auctioneering business, and insists on perpetrating two shady practices – an excerpt from Bloomberg:
Bliss Morris, CEO of First Financial Network, an Oklahoma City-based loan broker, said Auction.com misleads bidders by failing to disclose the reserve prices required to close deals and secretly bidding on behalf of sellers to drive up prices.
“You don’t know who you’re bidding against,” Morris said in a telephone interview. “If you have a reputable auction house, they’re not bidding against you.”
Those practices are common in the industry, said Frieden, a native of Anaheim, California, who started trading property 30 years ago and moved to Australia in 1989 to study real estate auctions.
“There’s no mystery about this, and nothing unusual either,” Frieden said of the process. “Well over 90 percent of all reserve auctions are done without publishing the reserve price. And the auctioneer has the right to bid on behalf of the seller to protect the reserve price.”
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