Real Estate Auctions Seminar

Brokers Guild Press Release

With the housing market in its worst slump in decades, and more properties heading to the auction block, consumers and investors alike are going to the auctions looking for bargains. Unfortunately, being unaware of auction procedures, contracts, and so much more, the good deal can become a disaster instantaneously.

For example: a couple purchases a home at auction and is thrilled to get the property for such a reasonable bid. They admired the home in the brochure, but not until they actually see the house do they realize how much major repair work will be necessary to make it habitable, to pass inspection, or to obtain a mortgage. They may feel cheated until they are shown a copy of the contract they were agreeing to when they signed the paperwork at the auction. The contract clearly states it is the buyer’s responsibility to have the property inspected prior to the sales. Although the contract was available well in advance on the auction house web site (with reference to it in the newspaper ad), no one actually read it. The dream house became a nightmare instantaneously and cost much more than ever anticipated.

Another example is when the opening bid is based on the “previous market value” and without checking the current market value, the property is overbid. The property is sold to the highest bidder who has now entered into a binding contract to purchase for the amount of the bid. Unfortunately, the current market value is far below the previous market value and the bid. While no lender will mortgage the property for the overpriced amount, the bidder is still responsible for the full balance.

Even licensed agents and realtors are not always aware of the auction house contract components and are often surprised and embarrassed when attending an auction with a client.

“I’ve been to auctions where as many as 50 people attended with licensed agents and over half the agents didn’t pre-register with their clients as required by that auction house. Consequently, the agent is not paid. “The agent just didn’t do his or her homework and they weren’t aware,” says Shay Lowe of Brokers Guild – Cherry Creek Ltd.

Lowe believes in the value of the auction process: “Auctions can definitely be a way of purchasing property at a great price, but it’s the bidder’s responsibility to take the time and effort and due diligence, whether on their own or through a realtor, and these issues are only the tip of the iceberg.”

Lowe has devised a solution. She will be conducting a seminar on Real Estate Auction Basics every third Wednesday of the month. The seminars will be open to the public as well as other realtors and will cover a variety of topics: pre-auction due diligence, hiring an agent, property evaluation and inspections, title work, financing options and much more.

The first scheduled seminars will be held this Wednesday, February 25, at 7995 E. Hampden Ave., Suite 100 (Bank of the West Building ). Doors open at 5:00 p.m. for registration and the seminar begins at 6:00 p.m. Registration at the door is $30.00, cash or check. Early registration is only $20.00 and is accepted by phone until 4:00 p.m. on Tuesday, February 24. Call for more information or to register at 303-795-7009. Cherry Creek Mortgage and American Family Insurance are co-sponsors of the event and will have representatives available at the seminar to answer questions.