I keep hoping that the auction format will take hold, and at least become one of the choices for sellers to consider. The Harcourts hubbub has settled down – I haven’t seen or heard of any of their auctions lately – but auction.com is finally sticking their toe in the water.
They are beta-testing their Select division, which is a happy blend of an online auction and regular transaction terms. From their website:
- A Buyer’s Premium of $2,000 will be added to the Winning Bid amount to determine the Total Purchase Price (TPP). The buyer is responsible for paying the TPP whether using financing or cash to purchase the home.
- An Earnest Money Deposit of 1% of the Total Purchase Price, or $1,000, (whichever is greater), is required at the time you execute your Purchase Sales Agreement. This $1,000 will be applied towards your closing costs and/or down payment at closing.
- A Buyer’s Broker Commission of 2.5%, or $1,200 (whichever is greater) is available to registered Buyer’s agents/brokers. Click the Agent/Broker Info link at the bottom of this page to find out how agents/brokers can register to be eligible for commissions.
- A 15-day Finance Contingency is available for qualified buyers who intend to purchase using financing. To learn more about finance contingencies, view our FAQs.
- An Inspection Contingency is available on this property as follows: A 10-day Inspection Contingency is available for financed transactions, and a 7-day Inspection Contingency is available for cash purchases. Find out more about inspection contingencies on our FAQs.
- Buyer may request a Seller Concession credit of up to 3%, not to exceed Buyer’s recurring and nonrecurring closing costs, for all financed purchases. View our FAQs for more information on seller concessions.
- Buyers will receive insurable title upon successful closing. View our FAQs for more information on title insurance.
- If Buyer uses the Seller’s designated closing company/agent, Seller shall pay the Buyer’s title policy premium for a state-specific standard owner’s title policy.
- Until the Seller’s reserve price is met, Auction.com may counter bid on behalf of the Seller. Counter bidding gives Buyers and Sellers more flexibility to find a mutually agreeable price. Counter bids do not occur after the Seller’s reserve price is met.
They just couldn’t resist the last paragraph, and it’s one that will likely be a turn-off to casual bidders. But unless they get to the reserve price, who cares – if their shill has to try to bid it up in order to hit the reserve price, then the buyer can always say no.
But they’ve only had five listings in the state so far:
The online aspect sounds convenient, but it’s the live event that makes it worth it. The live auction is where buyers might get hyped up enough to bid a little higher than they thought, and be more likely to hit the reserve price.
They have Google behind them:
So if the beta-testing works out the bugs, and Google can spend millions on advertising it, then the auction.com Select format could be what brings residential resale auctions to the masses.
If they could incorporate a platform where ANY listing agent could utilize the service and have it be friendly to all, then we’d really be cooking!