Property Auctions

[Smiling JOe]

Hi Skunk,

You pretty well hit the nail on the head.

We'll bring the buyers, but in a market like this, the best thing for a buyer to understand is that the sellers are motivated. Once the buyers are motivated, then I can truly go to work to bring them the very highest dollar available. Once things are adjusted, it also won't take long for the market to start easing back up, either. Relatively speaking.

I find your statements confusing. Sellers are not motivated -prices and lack of sales show this. This really makes me question how many properties truly are for sale. The inventory of properties is far greater than the wish list of sellers, IMHO.

 

[HighBidder]

Does anybody else think that this auction reflects the current state of the market? Supply would appear to far outdistance any demand. What demand there is is trying to establish the "market" far below asking prices. Sellers still have the luxury of holding and so they do. Soon there likely will be some that don't and so they won't. Only then will the "market" be established. The only logical reading of the current situation is that the market is in a downward transition, the only mystery remains the depth. I take that back, I think it is a mystery that there are so many units on the market, in today's climate, offered by sellers who don't seem to want to accept the reality of the market. Why don't they pull the units off and lower the supply numbers? They are helping to create the very momentum they refuse to recognize. That is a second mystery.

Amen.

 

[Smiling JOe]

Joe,

Using a reserve is a good thing in many circumstances, maybe even most. However, if a seller is not realistic about the current market value of their property then it is best to utilize conventional marketing to sell the asset. Eventually, the market will rise to meet the anticipated price.

Then why would you waste your time on going through the motions, knowing that a seller's reserve price is way higher than the "real price," as you say? I know the sellers like their property very much. I do not question that the prices are too high, just look at the lack of sales to show it. My question is just as I state, why waste your time, money and effort trying to sell today, what may have to wait a year to sell at that price?

Please let me say that I think the auction business is very legit and can serve a great purpose to many peoples needs. I do not question your abilities or professionalism as an auctioneer, highbidder. That is not my intention. My intention is to seek the truth behind the sales. I certainly appreciate your point of view, and to better understand anything, I think we should first question everything. ;-)

 

[HighBidder]

I have heard that some sellers are being pressured by their neighbors not to list or sell too low or it will hurt the neighborhood's market value.

However, flippers stuck with a buildout time lot are either going to have to sacrifice their lot at a low price or build. In Watercolors lot owners are having to pay $2500.00 a month for every month they do not build after the deadline start date in their contract.

I'll second that. I base my decisions on my reality, not my neighbor's reality.

Many flippers are holding the proverbial hot potato. Oops.

 

[HighBidder]

THERE IS NO MARKET PRICE for these properties. The owners are not willing to sell for price the public is willing to pay (both inside and outside the auction--otherwise they would not have been at the auction in the first place)....AND...the buyers are not willing to pay the amount the seller is asking for these properties. (The closest the buyer came to the actual current market price of their property is the highest bid he got at the auction.)

The buyers can now add any costs they incurred for the auction to the carrying costs of the properties and continue to hold out until someone blinks. With inventories raising in Florida (and across the nation) on a daily basis (we've run out of bigger fools?), and carrying costs mounting daily for investulators, my money is on the sellers being the first to blink (or ride the slippery slope down to unprofitability like their stock market brethren before them did during the dot.com bust). In a stagnant market, every day that passes means carrying costs in the form of taxes, insurance and interest eat away at the profit.

A vacation/second home is certainly not a "must buy now" purchase. I think buyers who are toying with the idea of purchasing in Florida are quite willing to hold out until after the hurricane season ends--or until they get the price "they" are willing to pay.

You're on it, Shelly. I agree with everything you said except "--otherwise they would not have been at the auction in the first place)". The auction is a great way to sell property, and do so at market value.

Oh yeah, there IS a market value. We just don't know what it is...yet.

 

[HighBidder]

SJ- I agree with most of your opines on this board, but have to cry out here.
What the heck is a "fair" price - is it 90% of 2005's inflated value so an overextended investor can bail out with a profit? Smart buyers will wait and get as close to a desperation price as possible. If in that process they never buy and miss the boat, they lose. Over the past 3-5 years it's been all seller's market, now it's a buyers market. A small reduction over an inflated, "aspiration" price is no bargain. On the other side of the coin, list price may be a relative bargain if listed aggressively.

In my experience, anyone showing up at an auction (unless it's Sothebys) is looking for a smokin' deal....

Been a long time since I've said this many "Amens".

 

[HighBidder]

That is not a true picture given the number of weeks of advertising leading up to the auction. Also, I have not heard of an actual sale from this auction. Did a property sell?


15 bidders for 21 properties is a week turnout in my mind, not different from the normal market.

Exactly. Weak. Once sellers realize what they are truly facing and are properly motivated, you'll start seeing serious buyer activity.

 

[HighBidder]

Glad to shake things up. I don't want everyone riding in my boat -- we may sink.

I am not sure that I understand your question about a fair price. I never mentioned fair price. IMO, a fair price is a meeting ground between a buyer and seller, and as far as I can tell, it sounds like no fair price was established. Many sellers still love their property to much, and I too, wonder why they are placing them on the market since they love them too dearly. Personally, I think many prices are way too high to sell today. Attractively priced properties are out there and some sell quickly, and others have not. After seeing the listings not sell for 6+ months, the sellers should reconsider their asking prices if they are truly wanting to sell.

Joe's coming around....

 

[HighBidder]

Me neither, kinda went off on a tangent....

Anyways, what I was trying to say is auctions seem to work at the extremes- strong buyers or strong sellers market.

Hi Jelly,

Auctions work in all economic climates but, as you indicated, are exemplified in the extremes.

 

[Smiling JOe]

Joe's coming around....

I've been here the whole time. My thoughts on the subject have not changed, although my ears are always to the ground and my mind is open.;-)