Auctions: Buyer be aware!

The banks have done it again. It is not a secret that bank owned properties also called REO’s created multiple offers the first day back in the days.  Buyers have the notion that REO’s are being sold at a discount. Our monthly sales data showed that the best deals were bought through short sales.
Come again…with auction websites – glorified marketing tool rather than under market deals. Consumers connect auctions with discounted properties, below market price and deal. Sorry, no deals here rather auction websites can bid against you and hereby bid up the price. Also, sellers have a reserve price which should be the starting bid but seldom is. Buyers, agents, loan agents are wasting a lot of time bidding on properties with banks just teasing you with the low starting bids. Most auction sites have NO inspection period and all your due diligence needs to be done before the bid process starts.
Let’s assume you are the winning bidder , don’t open the Champagne yet…after paying the additional 5% surcharge on top of the price- you might not feel like a winner. The bank is the winner!

For example:  single story 1073 sq ft home with 3 bed rooms, 2 bath, in Oceanside, condition: heavy rehab, all windows were boarded up and graffiti inside.
Starting bid : $121,000, reserve bid: $ 241,000, final winning bid: $269,000, estimated value: $241,000.