We've all seen advertisements in the paper, the mail and online about properties being sold to the public at "auction". These ads entice buyers to attend by advertising unrealistically low prices; then after you've registered, they disclose the advertised price is simply the starting bid. What they don't reveal is that the seller's Reserve Price (The lowest price they will sell for) is substantially higher. Some auctions also require you to make a non-refundable deposit immediately after bidding and pay an additional ‘Buyers Premium' that could add up to 6% or more to your purchase price. These ‘auctions' are nothing more than advertising schemes designed to entice buyers into participating in the "auction experience". The more people that attend these "auctions", the more the excitement; the more the excitement, the higher the bidding.
These auctions are great at creating huge profits for the auction company and the seller, but rarely prove profitable for the average buyer. Most buyers have found that they could buy a similar property, without all the hype and additional buyers premiums and fees directly from a real estate agent and may even get the bank to pay for their closing costs, repairs or other credits and provide for inspection periods and your initial deposit is fully refundable.
