Josh Parker, a seasoned REO Listing Agent, has noticed a trend among Bank Owned Properties of late, "We've sold several homes recently through multiple different auction channels" he said.
"One of our larger clients is moving towards the auction initiative in a larger scale, utilizing Auction.Com & even Hudson & Marshall recently."
When speaking with other local real estate professionals, we got a myriad of responses when posing the questions of whether or not the Auction of Bank Owned Properties was perceived as good, bad, or indifferent. Specifically, the question posed was, "I'm curious, and looking to understand more about the consumer & agent view of Bank Owned Auction properties. Can you tell me why you like or dislike Bank Owned Auctions?"
The responses were glaringly negative,
"Kim Broyles, Broker, Real Estate Review:
I have quite a few investor clients who are buying multiple investment properties who are not interested in bidding on any auction properties. They think the auctions are rigged. They are convinced that someone with the bank or the auction company is up bidding the bids. I myself have to wonder after watching a few and the winning bidders were ridiculously high. Also, the buyers premium, the not being able to get in touch with a lot of the auctions agents. Also, some of them do not trust the title companies and are worried about clear title. Getting clear title is a big one. As it is when there is a foreclosure property with an agent that is easy to get ahold of there are still all kinds of things that come up- especially with code enforcement. Most of my clients are investors right now and only one has been bidding on any auctions recently and I think he is done with them as well. The others gave it a few shots and they were finished."
"Bob Duncombe, Florida Luxury Realty:
If they don't allow our clients inspection contingencies, we do not show them."
"Brian Powell, Prospect Mortgage:
There is typically a 5% buyer's premium added to the sales price, so that has to be factored into the offer price."
"Kim Lee Herring, Keller Williams Realty:
If it fits the clients needs and they thoroughly understand the risks involved, then certainly. Since all of our buyers are on signed buyer agreements, they are aware that they also have to pay any difference in commission to my 3% minimum. Never done an auction."
"Ana Milena Vega, Coldwell Banker:
I don't even bother, especially with those that say 1% commission. It does matter who the listing agent is, because people like you and Christina are above the norm; some agents you can call, email, text - you could even show up in their offices & still not get a response."
"Cyndee Haydon, Keller Williams Realty:
Lots of risk & complexities - we almost mandate that they hire a real estate attorney to understand the bank/auction contracts - not a fan at all and don't like the bait & switch I've experienced. I don't have confidence in the process. Listing Agent has limited (if any) ability to help, they're just a front person to get the bank's property into the MLS. We try to avoid them. Only valuable when able to buy at a deeply discounted price."
So we have to ask our Tampa Bay Agent readers:
- Do you show auctions to your client(s)?
- Do you intentionally avoid showing auctions your clients?
- Do you only show auction properties to savvy investor clients?
- Do you only show auction properties to cash buyers?
- How do your financed buyers receive the auction properties?
- Do you even send them to your financed buyers at all in their searches?
- Would your buyer expect to pay a discounted rate vs. market value?
- Would they be willing to pay market value at an auction?
- Would they be willing to pay over market value at an auction?
- Do you care who the listing agent is?
- Do you care if the listing agent is easily accessible?
- Do you care if the listing agent understands the auction process?
- Do you care what co-op commission is being offered?
And what about our loyal consumer readers:
- Do you want to look at auction properties?
- Do you want to waive your inspection contingencies?
- Do you want to waive your financing contingencies?
- Do you want a clear title?
- Do you want to pay a 5% or 10% Buyer's Premium over the sales price?
- Are you going to lower your offer amount to offset the Buyer's Premium?
- Are you willing to pay market value, or over market value at an auction?
- Or do you expect to get a deep discount by purchasing at an auction?
- Are you willing to hire a real estate attorney to review the auction-specific contracts?
- Does any of this matter, or do you just want the house?
Please share your input & feedback on this widely discussed topic on Foreclosure Auction Properties!