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Originally Posted by Don
I wanted to add our experience with an auction. For us it was a disappointment and waste of time. I'll admit that we had never been to an auction and didn't know much about how it all works.
A few years ago we heard about a condo being auctioned. We always admired them but the original $399,000 price was out of our range. We watched as year after year For Sale signs were posted and the price eventually dropped to $299,000 (still too much for us).
When we heard about the auction we decided to attend and be prepared to bid up to $150,000. We didn't think it likely that we'd win but thought it was worth a try. We drove up to the lake for the auction and were surprised that there was only one other person in attendance. The auctioneer then told us that there was a $269,000 minimum bid. That information was never mentioned in their website or emails.
As we were leaving we asked the agent if he'd like to take down our name and phone number in case they would consider a lower price. The agent said "no, we'll just put it back on the market if it doesn't sell here".
Our conclusion was that the "auction" is just another sales tool to get you in the door. It worked with us since we took a day off and drove all the way up just for this.
We later learned that what we were hoping for was an "absolute auction" where the property is sold for the highest bid with no minimums. Does anyone know if absolute auctions ever occur around the lake?
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Don, being hindsight, I will only offer this as an option for you to look into next time.
Anyone that has been to New London is aware of Peter Christian's Tavern on Main Street. Well the property went up for foreclosure auction and was to be auctioned as a whole (the restaurant, all equipment, the building which included 6 other rentals and all the rights to anything that was ever PC related). When the auction started there was only one set of bidders that showed up, they were the gentleman that owns CC Tomato's and a friend of his in the real estate business. One would take the restaurant and the other would handle the rentals.
Anyway, the auctioneer started the bidding at $700K and they just stood there for a moment, talked to each other for a moment and turned to leave. The auctioneer stopped the auction and called them over, after a minute or two, he called over the bank reps (there were two seperate notes on the property, with different banks). After a brief discussion, the auctioneer started the auction again with an opening bid of $469K, the bidders raised there hands and then the auction closed.
The banks were willing to take a loss to unload a very tax heavy building. The total note that was owed was just over 1.3 million to both banks combined. One bank did get paid before the other, but I have no idea how that part was worked out, just what I saw while attending the auction as an on looker.
Next time, try and call their bluff and see how interested they really are. It can't hurt, especially if you are the only folks there to actually bid.