Real Estate Auctions: A Growing Trend That's Good for Who?

Link below is to an article in the Sarasota Herald Tribune concerning the recent auction of some luxury properties by a local brokerage. It's the second time they've done it in recent months and you have to admit - it's gotten them lots of press coverage. Heck it's made them lots of commission. And it's gotten some buyers some bargains. But exactly how much does this serve the interests of sellers?

I'm most interested in the quote from the article below:

"Mark S. Miller, chief executive officer of Sarasota's Westwater construction, had six high-end properties for sale in the auction.
He said he sold all of them at about an average of 60 percent of his asking price.
Miller said he had hoped for 70 percent and termed the auction a "success but a necessary evil" in difficult times like these for developers like him.
One Miller-owned property sold at absolute auction was a home at 204 Bird Key Drive. Miller had asked for $8 million but was forced to accept nearly $4.2 million, the highest qualified bid."

He AVERAGED SIXTY PERCENT of ASKING PRICE? You know as slow as the market may be nothing sells Real Estate like price does and if all my sellers would lower their asking price by 30% and then accept an offer for 10% below that - why all my listings would likely be gone in days!!

And that sure would make me smile and put a nice boost in my checking account. It probably would also represent a SEVERE beating for many if not all of them but it sure would be exciting wouldn't it?

Maybe, just maybe, if folks properly price property to begin with, then a day where your customers are accepting offers 40% off your suggested list price might NOT be the cause for celebration it seems to be.

Lastly what do you think those low ball sales do to appraisals of other like properties? Why drive them down too. OK so sellers take a nice big haircut, the market is driven even further down across the board. But hey some Realtors got some nice commission checks. Certainly some folks need the cashflow and need out desperately - still for the majority of people whose realtor tells them they should consider an auction - they need to consider just how LOW can they go?

Why wouldn't you be excited about auctions......

Here's a link to the complete article from the Sarasota Herald Tribune:

http://www.heraldtribune.com/article/20071117/REALESTATE/711170534

- Mike W.