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.”
Read the full article here:
I recently commented on this violation of the MLS TOS. If “awkshum dot comm” wants to list then the rules are explicit. The cannot refuse a full price no conditions offer at the advertised price.
They could certainly be sued for the commission owed the buyer’s agent.
Their opening bids are less than half of the reserve price, which may look sexy in ads but buyers are reluctant to go 2x or 3x higher than that.
Then they find out that the 5% buyer’s premium is tacked on top of their winning bid, and the reluctance level goes sky high.
Why the shady stuff? They are getting in their own way!
Make the seller pay the commission, make the opening bid attractive but not ridiculous, and don’t fluff the bidding.
Old guys who attended any of the hundreds of RE auctions during the early 90’s learned how shady, slimy and underhanded they are. No thank you.
Only thing worse is Auto auctions !!
They actually screen off groups bidders so they cannot see who is really bidding.
It’s like going up against Barry on Storage wars LOL !!
http://www.trulia.com/property/3134677388-12074-Salem-Rd-Victorville-CA-92392
So. Jim. I want to engage you as my buyer’s agent with a 10% finders fee for exactly this kind of property. I can have the $100k cashiers check FedEx to you Friday morning. You’re welcome.
One little hitch – I need to be a member of the MLS so the rules apply.
I’m checking SD for same deals.
How about these? (though none in the MLS – maybe they got smart/burned?)
http://www.auction.com/event/California/residential-auction-asset/1462586-5290-7242-ROMERO-DRIVE-LA-JOLLA-CA-92037-E1015
http://www.auction.com/event/California/residential-auction-asset/1374877-5290-1517-SUTTER-STREET-SAN-DIEGO-CA-92103-E1015
http://www.auction.com/event/California/residential-auction-asset/1528420-5290-5252-BALBOA-ARMS-DRIVE-266-SAN-DIEGO-CA-92117-E1015 (HOA in litigation)