(SVO) – Judging by how many people are reading the article about the upcoming Chilali auction, people find the notion of a real estate auction attention grabbing. Given the doldrums that the local real estate market has been in, I’ve often wondered why we aren’t seeing more real estate auctions. Certainly there have been some properties that are distressed/foreclosure properties but why not others?
I recognize that some people attach a stigma to selling their house via auction, however selling homes via the auction method is the norm in many countries. As long as the property auction is adequately marketed, it stands to reason that one finds the true market for their property. No doubt, some people aren’t motivated to sell or in denial about their property’s true value. However, there are others who would be interested in selling their real estate and I would think would be receptive to the approach if educated on how they work.
I have heard of at least one auction locally where there was an undisclosed minimum bid that didn’t get reached. This left a sour taste in people’s mouth. In the past, I’ve spoken with Larry Flynn who has done quite a bit of real estate auctioning. His firm has been adamant about only doing auctions with no minimums which has the perhaps paradoxical effect of driving a higher price.
Why do you think we haven’t seen more well-marketed auctions? There’s certainly money out there looking for deals on assets including real estate. Can you see if happening here? If so, how?