Phoenix Real Estate for $500? Welcome to the World of Auctions

avatarthumbnail.jpgOnce upon a time in a prior iteration as a stock broker, I used to receive calls from people who were looking at options contracts – generally representing the right to buy or sell 100 shares of a company’s stick – available at absolutely ridiculous prices.

“Is this for real,” they would ask, not really wanting to hear the real answer.

“If it looks too good to be true,” I would respond, “it probably is.”

These contracts never were what they seemed. Remember when AT&T spun off Lucent Technologies and GTE once upon a time? What seemed like a contract for 100 shares of AT&T instead would represent a handful of shares of the mother stock, along with shares of Lucent and GTE. The price would seem like a terrific deal for 100 AT&T, but it wasn’t what you thought you were getting.

The same goes for the auction listings now filling the Arizona Regional MLS. You’ll almost certainly see some of these appear in the near left sidebar on the rotating “homes for sale” since the algorithm for that module shows the lowest-priced active listings first.

As of the moment there are 249 active auction listings in Maricopa County in ARMLS. Seven of the 249 have list prices of $500. Another one is at $1,000. Five are at $5,000. And the prices go up from there.

These aren’t real list prices – what you see is too good to be true. These merely are the starting bids for the auction. And winning the auction doesn’t necessarily mean you’re going to be buying the house.

Reserve: Yes

That little field indicates there’s a reserve price – a price below which the house will not be sold. It’s just like the reserve price you see on eBay. If the best offer doesn’t exceed that reserve, then the seller’s not obligated to sell the home.

There are more details with auctions that we’ve discussed before and likely will discuss again in the coming days ahead of the latest, greatest auction scheduled for January 20.

This isn’t to say that auctions aren’t worth investigating. But don’t let the excitement over a $1,000 list price that isn’t really the list price cause you to get carried away.

[tags]Phoenix real estate, real estate auctions, bank owned homes[/tags]

About Jonathan

Jonathan Dalton is a 30-plus-year resident of the Valley and has been helping folks buy and sell homes since 2004. He can be reached at 602-502-9693 or info at allphoenixrealestate.com.