HighBidder
Beach Comber
Camp Creek Kid said:Perhaps most people misjudged what this auction was all about. These properties weren't in foreclosure, but when I hear "real estate auction," I think of desperation or "smokin' deals". Obviously that wasn't the case here. Isn't this a rather new way of selling properties?
Hi Camp,
The auction process is not a new way of selling property, whether real or personal. It is actually the oldest recorded method of selling any item, dating back thousands of years and used throughout the world. Notify the prospective buyers and offer the property for sale, selling to the highest and best bidder. The auction chant as we know it today originated about 150 years ago and is uniquely American.
The auction method of marketing has a stigma of "distress" due primarily to the advent of mass communications combined with several serious economic adjustments in United States history.
What do I mean by this?
The Great Depression was the first major market adjustment in US history, a result of the incredible (and unsustainable) economic boom of the Industrial Revolution. Beginning in 1929, massive dollar volumes of assets were suddenly available on the market and with no buyers available to purchase these assets. The auction process was utilized as always to find the highest and best buyer, but at a frequency never before seen, much less reported upon in the media & history books. In this case the auction process did exactly what it was designed to do, acheive the highest and best dollar available for the seller under that day's terms and conditions.
In more recent memory we experienced a massive selloff due to the S&L/RTC fiasco. Everyone here remembers all the media coverage of that.
Under our current situation, some of the problem is that so many properties are on the market not because the seller is intent upon selling, but rather "hoping" to reap the rewards of the boom. Now supply significantly exceeds demand thereby killing a market that was questionably sustainable to begin with, and we haven't even touched on "interest only loans" yet.
The auction process is an incredibly fair method of marketing, and is the best way to exchange assets for the highest possible dollar value under the current set of conditions, whatever those might be.