AUCTION - Palmeira Villas of Seagrove Beach - NEW published minimum bid of $750,000

[seaside2]

Re: AUCTION - Palmeira Villas of Seagrove Beach - NEW published minimum bid of $750,0

P. A. G., Again I ask: How do you justify a 10% buyers premium on top of what appear to be fairly significant marketing fees when conventional realtors get 6% or so and usually have to split that with another agent?

This just does not make sense to me.

Or maybe you don't want to answer the question.

 

[P.A.G.]

Re: AUCTION - Palmeira Villas of Seagrove Beach - NEW published minimum bid of $750,0

Seaside2,

The marketing fee and the premium are completely different. The marketing fee is paid by the seller to market the property. Again, PAG does not profit from this fee. The 10% buyers premium is standard in the auction industry and has been for many years. Auctions generally offer an attractive price to the buyer, therefore they pay a premium.

 

[egrp]

Re: AUCTION - Palmeira Villas of Seagrove Beach - NEW published minimum bid of $750,0

10% can be justified in that an auction typically renders a buyer quicker...so instead of putting it on the mkt for 120 days and auction may sell the property in 30 days thus saving 90 days of carry/expenses.

10% commission makes sense...but you can't auction properties in this mkt at those prices...it needs to be a WOW price and i'm not talking 10% discount from recently sold/asking...i'm talking 30%+

 

[P.A.G.]

Re: AUCTION - Palmeira Villas of Seagrove Beach - NEW published minimum bid of $750,0

http://thepremierauctiongroup.com/auction_list.php

Please take a look at our November 17, 2007 multi-property auction. You will find the WOW prices that you speak of.

 

[amw]

Re: AUCTION - Palmeira Villas of Seagrove Beach - NEW published minimum bid of $750,0

Did anyone go to the Hudson and Marshall 'auction' held at the Embassy Suites Destin (Miramar Beach) last night? If you did, any comments re: number of people there, quality of the bids, etc?

I put 'auction' in quotes as it is not an absolute auction, and there is NO guarantee that the seller (banks) will sell the property to the high bidder.

I called H&M. Their process is as follows: They offer broker commision equal to 2% of high bid. Total sales price is Highest Bid plus 5% fee. Bidding is opened to the floor with bidders thus setting opening bid. You can bid on-line prior to the auction, but I'm not sure how they treat internet bids- whether used to set opening bid or whether they are unsealed in another way at auction. Their rep hinted that properties could pre-sell, they are all on the market via regular MLS. Anyway, high bid from the 'auction' gets taken to the bank who then decides if they want to accept, ... or counter (or ignore-- but I didn't get specifics on how long it would take before they get back to buyer re: accepting/declining offer, certainly it must be within a few days as there is a mandatory
30 day close). All accepted offers are treated as cash offers, so if financing isn't or can't be obtained earnest money is at risk. In other words it's a way to get offers in front of the bank.

So what we appear to have is a way of marketing real estate. I am curious to whether H&M are seeing much success. Any thoughts?

 

[SHELLY]

Re: AUCTION - Palmeira Villas of Seagrove Beach - NEW published minimum bid of $750,0

Snacks? What about Snacks?

.

 

[seaside2]

Re: AUCTION - Palmeira Villas of Seagrove Beach - NEW published minimum bid of $750,0

Seaside2,

The marketing fee and the premium are completely different. I fully understand that point. Who gets the residuals from any unexpended marketing fees? I bet it is not the owner!! The marketing fee is paid by the seller to market the property. Again, PAG does not profit from this fee. The 10% buyers premium is standard in the auction industry and has been for many years. While this may be "Standard in the auction industry", that answer does not answer my question. Auctions generally offer an attractive price to the buyer, therefore they pay a premium. People that are in the position to require an auction are usually in trouble and auctions appear to be a quick way out. The problem here is that the buyer does not have the benefit of a considered offer with a real estate profesional advising him/her along the way. The only way that the buyer can be assured he/she is getting a good deal is for the price to be extremely attractive, leaving enough on the table to cover contingencies[/quote]

And no, I am not a Realtor.

 

[scooterbug44]

Re: AUCTION - Palmeira Villas of Seagrove Beach - NEW published minimum bid of $750,0

I find it hard to believe that there is no profit or benefit whatsoever to you tied into the marketing fees.

Most auction marketing & signage I've seen quite prominently tout the name of the auction house, sometimes it seems more so than the featured properties.

 

[Joe Mammy]

Re: AUCTION - Palmeira Villas of Seagrove Beach - NEW published minimum bid of $750,0

What attracted me to PAG's next auction was that they wised up and lowered the upfront marketing fee for the seller from $10K to $2500, hopefully the marketing doesn't suffer.

I've been to many auctions in our area put on by PAG, Roebuck and Anderson. The absolutes always attracted the most buyers but I witnessed some questionable actions of what looked like a real nice buy outbid by a "proxy bidder" on the phone at the last minute.

My seller's did not want to roll the dice with an absolute so we pushed for the minimum bid avenue. The only way it will work is to make the minimum bid + the 10% buyer's premium a WOW price. The sellers had to do some serious soul searching and find the very bare minimum that they could live with. We've accomplished this with 4 properties.

From a buyer's perspective I would think the minimum bid info is great. They know going into the auction what the seller will accept and will not be wasting their time bidding only to find out the reserve was not met thus no deal.

 

[seaside2]

Re: AUCTION - Palmeira Villas of Seagrove Beach - NEW published minimum bid of $750,0

While the minmum bid approach does have a great level of appeal to it, there is still the question of the mysterious "on the phone" bid. Autioneers have used planted bidders for years to raise prices to the unsuspecting bidder. I am not accusing anyone of doing this, but what has happened before can happen again.

To my earlier point, the Realtor assumes all of the cost for advertising, marketing, office expense, etc with absolutely no assurance of getting any of the money back. They do not charge a "marketing fee" or anything like that. And they do it for 6% or so gross. For the auctioneer, he gets his marketing costs covered up front, and then gets a huge 10%. and he does not guarantee a sale either. If he really wants to add value, guarantee a sale and if the sale does not consumate, he buys the property from the owner. Now you have added value.

If an owner will stop and think about it for a moment, he is really paying the marketing fee plus the 10% because the selling price plus the 10% is the true market value on that particular day. If he/she really wants to sell in 30 days, place the selling price near the minimum and let the Realtor get to work. The same people that are at the auction are looking at Realtors as well.

Bottom line, I have a hard time seeing where the auction process brings anything to the table, especially at 10% plus a hefty marketing fee.