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Lately a lot of listings have been coming up with a represented listing price, but are actually only available from Williams Auctions, with a 1% buyers agent compensation.  I wonder if others have seen this and how they feel about it?  One of these had a listing price of $69,900, but the Auction sign on the door said the bidding starts at $1,000. 

 

I have always felt that if you represent a price, the property should be for sale at that price.  Short Sales have seemed to disprove that, though it just doesn't seem right.  It seems the $500 Million $$ Bonus Guys at Fannie Mae and others, are figuring to make Real Estate agents work for nothing, to make their books look better! 

 

As far as I can tell, the Brokers posting these "listings" are breaking several of our MLS "Standards of Practice".  My Principal Broker says I just should not show these listings if they do not pay enough!  My clients see them on the internet represented as being listed. 

 

What to do?

 

Al V

 

 

 

 

 

 

 

 

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I agree that auction properties present a whole bunch of issues. As you say, many have a specific list price in the MLS which does not necessarily represent what the property is available for. Secondly, auction companies market an opening bid minimum such as $1,000. The low opening bid price is a marketing ploy designed to deceive the potential purchasers into thinking that they may actually buy a property for such a low price.

Behind the scenes, however, the seller will have a minimum price that they will accept for the property that is never disclosed to the public. So, the property goes to auction. Using your example price of $69,900, buyers may bid the price up to $50,000. The sellers may have a minimum price threshold of $55,000 so all bids on the property are rejected. In the meantime, the listing agent has held four open house dates on the two weekends prior to the auction date wasting four full days of otherwise productive time.

You bring up two issues; one is the integrity of listing a property in the MLS for a price that may not be available. In my opinion, doing this is dishonest and these listings shouldn’t be accepted by the MLS. Your second point is why would anyone work for 1%? Auction properties are not listings that I pursue, however, I have had several of my REO listings that have been pulled for auction so I go along with the program and do the things the auction company requires. Obviously, it isn’t worth my time on low end properties but it balances out with the higher end properties. Now, if you can snag a buyer at one of your open houses and represent them at the auction, you can double your commission to 2% where it gets more worthwhile. It all boil down to the fact that I do not like participating in auctions; however, I do what my client asks.
All in all, I think the auction process is damaging to the real estate market in general by putting properties on the market at reduced prices. The sales that do go through have a negative impact on the overall values in neighborhoods. I also believe that the auction process is deceitful in that opening bid prices are not what properties are available for and the minimum price acceptable to the seller are never disclosed.

One of my clients will auction any property if it doesn’t sell within 90 days of being listed. In my opinion, sellers could recover more by pricing the properties appropriately in the first place and avoid the auction process and the losses that auction properties incur. At least in my market, homes priced right will sell in less than 90 days.
Thank you for the point of view. In my experience, everything about being a Realtor revolves around honesty, transparency, and full disclosure. The Auction listings seem to be short on these attributes. IMO. The listings never mention the "Buyer's Premium", usually 10%. I think I am right in trying to push our MLS into not allowing these unless they meet all our Standards of Practice.

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