Condominium Auctions Emerging as Another Means of Sale

July 31, 2007 (KABC-TV) (KABC) -- In this sluggish real estate market, some property owners are looking for new ways to sell their homes fast. Eyewitness News Consumer Specialist Ric Romero reports some are turning to property auctions. But the auction could be just another sales gimmick.

One Irvine condo is up for sale, but the owner is trying something new to get it sold: a home auction.

"No realtor can guarantee the homeowner they will sell the property. This is pretty much an automatic sale if both seller and buyer agree," says Juliet, the condo seller.

The auction company is Pacific Auction Exchange, and they claim 96 percent of homes sell at auction.

"Most people, at least in Southern California, associate the auction process with distressed property, REOs and foreclosures," says auctioneer Kirk Lewis. "However, the method of auction is very commonly used across the country."

So how did this one work? Well, one woman thought she had won with a bid of #&36;420,000 plus 10 percent in auction fees, but when the bid was presented to Juliet it was too low.

"I just feel that someone should honor the system if she intended to do this, and she should go through it. Otherwise there's no point," says Evelin Chang, the would-be buyer.

When I talked to the president of the Orange County Real Estate Association, he wasn't surprised.

"I know of no instances where it's been successful, and we don't have a track record, a good read on this type of system just yet," says Orange County Real Estate Assoc. President Michael Caruso.

But in all fairness, shortly after the auction was over, Juliet lowered her price and Evelin raised hers, and a sale was made.

Home auctions like this are new. There is no track record for success, so choose it wisely.

"The word 'auction' sends a red flag to me. The first thing I think is, 'What's wrong with this property? Why wouldn't it be sold in a more traditional manner?' So I'm suspicious right away."

Get more News »

• Email
• Print
• Report a typo
•