DIYbanter - View Single Post - Are "Real Estate Auctions" just a clever marketing technique?

DT

In article ,
says...
On Wed, 04 May 2011 08:04:34 -0500, Ignoramus15919
wrote:

I did not get the house. The auction conditions were that I am
completely obligated to follow through with the sale if the seller
(bank) agree. But the bank, has an option of rejecting my bid.

Being used to honest industrial auctions, I paid no heed, and bid $70k
for that house that I talked about.

After I won the bid, I wasted a lot of time and even bought some
cleaning supplies (nothing major) in anticipation.

Anyway, after two weeks or so, I got this email from the auction
company:

``The seller has notified us that they are needing something closer
to $107,000.00 for this property. Is there any way you can come
up to
this amount? Please let me know how you wish to proceed.
Thanks!''

Well, my answer to this, politely phrased, was that no, I am not going
to come up to that sort of a price, the house is crappy in many ways,
in a flood zone etc. Payin $107k leaves no room for profit and no room
for risk. I am not going to play that sort of a game. And so, the
seller rejected my bid.

I am now wondering if, perhaps, the whole "real estate auction"
concept, as practiced by this auction company, is just a clever "new
age marketing technique"?

What if what they want is to either get a sucker bid, or if the bid is
not a sucker bid, to just get the bidder excited about the property,
and ask for more money later?

In other words, this is a cleverly planned psychological ripoff, and
not an honest "let's just get rid of it quickly at an auction"
approach, like I see in industrial sales.

Any comments?

i

Sounds bogus. Most auctions I've seen are either absolute or if
there is a reserve it is stated right there and then if it was reached
or not, not 2 weeks later.

In the real estate auctions I have attended, the opening bids were real
low. A representative of the owner (bank) just sits there and casually
raises the bid $10,000 at a time until it hits their real selling price
(as long as there are other bidders). Then he sits back and sees if
there are further bids. There were *none* at the two auctions I have
been at. No houses sold and the auctioneer announces, "Property remains
with the seller" or some such.

--
DT