Are "Real Estate Auctions" just a clever marketing technique?

Ignoramus15919 · 2011-05-04T13:04:34+00:00

I did not get the house. The auction conditions were that I amcompletely 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 $70kfor that house that I talked about.After I won the bid, I wasted a lot of time and even bought somecleaning supplies (nothing major) in anticipation.Anyway, after two weeks or so, I got this email from the auctioncompany: ``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 goingto 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 roomfor risk. I am not going to play that sort of a game. And so, theseller 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 "newage marketing technique"? What if what they want is to either get a sucker bid, or if the bid isnot 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, andnot an honest "let's just get rid of it quickly at an auction"approach, like I see in industrial sales. Any comments?i

May 04, 2011 20 Replies

Rate this thread:

I understand this a little better now, after having read countless forum threads about "house auction rejected by bank".

The auction company would love to see 100% of sales close, to get commissions and move on.

It is the banks and SPVs that are playing games, listing homes on auctions in hopes of sucker bids, and if none materialize, as a basis for negotiations. They routinely keep listing a house and putting it on various auctions etc.

The result of this, of course, is that bidders are less inclined to bid.