Up to this weekend, I read a lot about, talked with many about and saw online live real estate auctions. I have been part of online real estate auctions and other item auctions but this was not the same. My client and friend was talking about his past experiences with them and then we decided to go to the www.Auction.com real estate auction at the Hyatt Regency O’hare.
We looked at the properties for sale online before attending and had a couple “maybe interested”. We left early in the morning to register about 8:30 and the auction started at 9:30. As an agent I needed to register the day before for myself and my client and bring a letter from my broker stating he is my client along with a copy of my real estate license. He had to bring cashiers checks for $2500 for the first property he wanted to bid on then $5000 for everyone after that. W2s, tax returns for the last 2 years, bank statements, ID. All this before we could walk in the door with his number in hand. I have to say they were not very organized, we had to change lines 4 times as we kept getting incorrectly directed. There were about 200 people there with so much energy in the room. The auctioneer talked so fast, my ADHD definitely was presenting itself along with many other peoples. Many of the real estate buyerswere asking each-other what the price was at and what they had sold for. It moves so quickly and it is really hard to understand.
At the beginning, there was so much energy and excitement in the room. The foreclosure properties were selling for no less than what the buyers could have purchased a home for from a real estate agent, listed on the mls going through the normal process and doing their due diligence in purchasing the property with so much less stress. This comment was made by many attending. I had thought that I would feel a little out of place not knowing as much as the majority in the room, but I found out that I knew more than many in the room. There were first time investors, full time investors, online bidders, home buyers purchasing homes for themselves, a big combination. I kept thinking to myself about the events and purchases taking place that many of the property buyers in the room would benefit so much by having a real estate agentpresent and helping them. The pricing in many cases did not make sense, the strategy for bidding didn’t get many where they wanted to go and many overpaid. There was a 60/40 split between getting a good deal and overpaying. Proper planning, research and knowledge would definitely benefit many of the real estate buyers at the real estate auction.
I think the goal for the real estate auction company is to get as many real estate buyers in the room as possible and that way they can get them into an excited, competitive spending mood. It worked, as the buyers started to leave with fewer buyers in the room, the deals got better with less competition.
My client just missed an opportunity to bid on a property he had his eye on. It was one that they went really fast on and closed the bidding. He was bummed. As the buyers get processed for payment, many deals fall apart. This was one of them, so we waited for it to get back to being auctioned off. While we were waiting we started to use our phones for information on the area demographics and comps, as we did not do our homework before the auction. Low and behold, it was a good thing that he missed it. 4 out of 5 similar properties within a mile were foreclosed upon. It really looked like a great deal at the sale price of $30k for a two-flat in the city but he would have fixed it up and sat on it.
Auction.com auctioned off 284 properties that day and many of them they re-auctioned after the deals fell. We stayed until the end to see just what it would be like. There were maybe 30 people at the end with some online real estate investors, the deals got better because of the lack of competition. One investor purchased a few homes in Rockford for $5000 and less for each. That is less than a car! Some properties were starting at $500 and $1000 and there were no bidders willing to bid. We were tired and hungry by 6:30 when we left.
This was a great experience and one I will incorporate into helping my real estate clients and myself as I can see the potential in attending on a regular basis to pick up some great deals.
Some things I learned about attending a real estate auction:
Get there early for a good seat.
Plan ahead and view as many of the potential properties as possible and do cmas on all that are interesting to get a good range of value. You don’t want to get caught up in the moment and overpay.
Real Estate Auctions are not for people that cannot make quick smart decisions or are very picky and over-analyse (there is no time for that).
Pack a lunch! Boy did we get hungry and there is not any good food around to purchase.
Bring business cards and talk to many of the real estate buyers attending as there is a huge wealth of knowledge in the room.
Get plenty of rest the night before (I did doze a few times even with the loud voice of the auctioneer).
If you would like more information or would like for me to represent you at an auction to help you with your purchase contact me at your convenience.
Posted By: Julie Anne – The Julie Anne Real Estate Team at Keller Williams Success Realty
CDPE Certified for Short Sales and REO
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