REDC Real Estate Auctions
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Rehabber · Tucson, AZ · Member since 2008 · 1k+ posts · 802 votes
15yOriginally posted by Jimmy C.:
Sorin,
I was just saying that I have seen a LOT of threads here bashing Williamsx2. Mainly when people leave thinking they were the winning bidder, only to find out later that they did not meet the reserve.
REDC/Williams/Hudson are facillitator's and usually use local brokers, attorney's, and title companies to close the deal. As Don said, this is an elective sale and the owner of these properties have a predetermined value in mind. So, in my experience there is a higher rate of failure with these types of auctions.
When it comes to reimbursement EMD's and buyer's premiums, you might be fighting three or even four separate entities to get your full refund. The facillitator, the property owner, the title company, and/or attorney are necessary cogs in the wheel which creates a mess when someone drops the ball or drags their feet.
In my opinion, REDC/Williams/Hudson sometimes gets unfairly held responsible even though they may not always be the culprit. When your involving multiple parties, communications can breakdown and this is generally what causes the delays.
Most complaintants fail to read the terms of service agreements and disclosures or fail to understand all process entirely.
In my opinion, most properties sold through these sources are to retail or slightly lower than retail buyers. I was at an REDC last month and I spent several previewing properties and the best deals that actually closed did so around 90% to 95% of FMV.
The real scam here is that these properties are marketed for 10% above FMV as an REO and then when unsold, are remarketed and sold for 90 to 95% of FMV. The average buyer then proceeds to pay 10% higher price becuase they based it on the inflated original list price.
Out of 60 properties, not a single one actually closed where it would have closed at an effective price for me. However, one of my partners did get a very good deal on a turnkey property in a gated and secured subdivision where you flipped it in 42 days with less than $1K in rehab.
So, once in awhile a deal can be had, but it certainly is not a source I would highly recommend.
6 Replies
As an REO Broker,I've had several of my properties go to REDC for auction. The auctions typically produce poor results for the sellers. There are a lot of really low bids from investors, but they don't get accepted. The sellers set pretty high minimums. Usually if the properties don't sell for a decent price at auction, they are sold off through bulk sale.
Hope this helps...
- 15yDon KonipolBusiness MemberInvestor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
In discussing real estate auctions, it is important to distinguish between a forced sale auction and an elective auction. A forced sale auction, such as a foreclosure sale or tax lien sale, or auction ordered thru a bankruptcy court, has many elements that can conribute to a buye obtaining a property at a very low price. These auctions are mandated, not elective; they usually have very little advertising; often it is difficult if not impossible for the potential purchasor to obtain access to the property before purchase; they often have hostile tenants requiring court action to obtain control of the property from; the auctions are often held in inconvenient places at inconvenient times; and the terms are not buyer friendly often including immediate all cash sale, no title insurance, and no guarantee as to title marketability. All leading to a situation in which only the most well financed, well educated buyers participate.
An elective auction on the other hand is one in which the property owner wishing to sell the property has elected the auction sales method as a marketing tool for selling the property. These auctions usually require a relatively small earnest money deposit (10% or less of the sale price), have title insurance available, marketable title is part of the equation; financing is available; the auction is well promoted; property inspection is available and auction location and times are convenient. Although sometimes the seller will sell a few properties absolute, the majority have a reserve price (usually the minimum the seller would sell for at a conventional sale), and a shill is often used to jack up the price if a minimum bid amount is not offered.
Hi Jimmy,
I purchased 2 properties from WilliamsX2. They've been very decent to deal with, not at all a sham. Prices (bids accepted) are mostly better than you'd get it anywhere else. But maybe that's just in my area.REDC, I have a very poor opinion of them. Never bought anything from them but attended several auctions. Prices are inflated (I suspect thru shill bidding) and most properties return to the market afterwards.
Last, Hudson and Marshall, I consider them to be somewhere in between. Haven't heard that many people complaining about them either.
But still in my book, WX2 is tops. As I'm currently looking for a residence for myself, I wish they'd have something in my area that meets my needs because I know I'll get a good price. Just my $.02
Sorin,
I was just saying that I have seen a LOT of threads here bashing Williamsx2. Mainly when people leave thinking they were the winning bidder, only to find out later that they did not meet the reserve.
Jimmy,
A high bid isn't necessarily a winning bid until the bank approves it, but I'm sure you already know that. However, I've seen some bids approved thru WX2 that I could not believe it. For example, assessor value 700K sold for 383K, and 290K sold for 154K. And the properties needed some updating (first) or a good cleaning (second) but weren't trashed by any means, in very good condition. So I'd consider those good deals. I also saw a 59K bid fail on a 200K property but I expected that. And the market here isn't nearly as bad as some NV, AZ, FL or similar markets that have been severely beaten.
In the end, it's all up to the bank, it depends for how long they had the property on the market before the auction, what the market is like, etc. Still I've seen better (lower) prices and more success with these guys than any of the other ones. I'd bid with them with no hesitation, as opposed to REDC where they're not even worth my time.
To note, I've been going to/watching their auctions for about 4 yrs now. For what it's worth.- Rehabber · Tucson, AZ · Member since 2008 · 1k+ posts · 802 votes15y
Originally posted by Jimmy C.:
Sorin,I was just saying that I have seen a LOT of threads here bashing Williamsx2. Mainly when people leave thinking they were the winning bidder, only to find out later that they did not meet the reserve.
REDC/Williams/Hudson are facillitator's and usually use local brokers, attorney's, and title companies to close the deal. As Don said, this is an elective sale and the owner of these properties have a predetermined value in mind. So, in my experience there is a higher rate of failure with these types of auctions.
When it comes to reimbursement EMD's and buyer's premiums, you might be fighting three or even four separate entities to get your full refund. The facillitator, the property owner, the title company, and/or attorney are necessary cogs in the wheel which creates a mess when someone drops the ball or drags their feet.
In my opinion, REDC/Williams/Hudson sometimes gets unfairly held responsible even though they may not always be the culprit. When your involving multiple parties, communications can breakdown and this is generally what causes the delays.
Most complaintants fail to read the terms of service agreements and disclosures or fail to understand all process entirely.
In my opinion, most properties sold through these sources are to retail or slightly lower than retail buyers. I was at an REDC last month and I spent several previewing properties and the best deals that actually closed did so around 90% to 95% of FMV.
The real scam here is that these properties are marketed for 10% above FMV as an REO and then when unsold, are remarketed and sold for 90 to 95% of FMV. The average buyer then proceeds to pay 10% higher price becuase they based it on the inflated original list price.
Out of 60 properties, not a single one actually closed where it would have closed at an effective price for me. However, one of my partners did get a very good deal on a turnkey property in a gated and secured subdivision where you flipped it in 42 days with less than $1K in rehab.
So, once in awhile a deal can be had, but it certainly is not a source I would highly recommend.
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