Auction Information

Auctions: Below is a link to the fine print explaining the Auction process. But before we go there, just a few brief highlights.

If you've watched the infomercials on TV of late, they can be very misleading. For example, they may suggest a home is worth $200,000. This may or may not be true as the fine print suggests that number may be the higher of the appraised value of the property in connection with the most recent mortgage on the property, the most recent asking price, the assessed value or the most recent broker price opinion.

There is always a "reserve" that must be met. If the reserve isn't met, the seller doesn't have to sell the property. It is totally the seller's discretion. And the seller has 7 days to make the determination as to whether they want to sell or not.

The starting bid is not the reserve. In fact, the reserve is not disclosed to the public. A bidder must meet or exceed the reserve to be declared the winning bid.

Here is a strange part as the auctioneer may further bid on behalf of the seller, up to the amount of the Reserve Price, by placing successive or consecutive bids for a property, or by placing bids in response to other bidders.

The buyer must pay a "buyer's premium" of 5%. This is in addition to the winning bid.

All sales must close within 21 days..

Extensions are expensive...The buyer must place $5,000 of non-refundable money to extend the closing date..

If a buyer decides to use a third party lender, the deal is not contingent upon the buyer getting financing. This means if your lender turns you down, you will lose your earnest money.

Realtors get shafted as well. They must show up with the buyer, be registered and have their client have a winning bid in order to get paid (1%). I know of very few Realtors that would take on such silliness. Most Realtors will require a retainer that will be refunded to the buyer at the buyer's closing. This means that if the buyer doesn't have a winning bid, the Realtor would not have wasted their time at an auction.

One last comment. I can only say that if the deals at the auction were so good, my wife and I would be there with checkbook in hand. Stop and think about it. If I could sell someone a house and make a 3% commission and that house was $100,000, that would mean that I'd make $3,000. If the house could be purchased by me for $30,000, why would I show a client the home? I'd buy the home myself and make a ton more money. OK, I will never buy a home out from under one of my clients. But there are tons of other agents in the Dallas area and they don't owe my clients anything. They'd purchase the home.....The point is simple. Be prepared to spend a lot more than you thought you were going to spend if and/or when you go to the auction.....

And now the link to the fine print as promised: www.ushomeauction.com/terms.php