A big condo auction is coming up this Sunday in the Summerlin area of Las Vegas and I have advised a couple of very dear clients of mine Maria and Francis to take a shot at it. The condos are located on Vegas Drive which border Summerlin and the cool thing about this is that no SIDS or LIDS are involved. About 80 condos are going to be auctioned for the starting bid of $79,000 for one bedroom condos going up to $119,000 for three bedroom condos. The last three times that I visited the sales office there has been a lot of activity on these condominiums and I expect a crowd at the auction. The vast majority of people were not accompanied by a Realtor, which I happen to think is careless if not dumb..
Given that we are here to serve, a few words of caution about this auction, if you are dumb enough to attempt this by yourself and a lot of people are:
Read the purchase contract that the sellers have provided on their site, auctiontoday.com. In addition to the purchase contract, you can find the CC&Rs , floor plans and a web-site address for a home warranty company. Below are some important points that deserve further discussion.
1: These condos come AS IS as the seller has spelled out in capital letters in the condominium purchase contract.
2: Due diligence expires at the time of acceptance of your bid. You can’t get an inspection afterwards. The sellers recommends that you get a non-intrusive inspection on the condos that you are planning to bid on. That is cool if bidders chose only one condo to bid on, however this is not a likely scenario, most bidders plan to bid on more than one condo, and getting inspections for more than a couple of condos can get very expensive. Additionally people hesitate to pay hundreds of dollars in inspection fees when the chances are that they will not have the winning bid. I repeat these condos come AS IS.
3: These condos have been repainted and this makes a visual inspection ineffective, we found some trash disposals that were not working, a little noise in some air conditioning units and a few hair line cracks in some walls.
4: One of the most attractive points of attending an auction is that if the amount of your bid is more than other buyers at that auction, you should win. But that is not the way it really works. This is NOT an absolute condo auction and the seller’s reserve (the least amount of money the seller is willing to take) has to be met before a bid is accepted. The auctioneer has stated in writing that the auctioneer may repeatedly bid on behalf of the seller to drive up the bid amounts so it can meet the reserve, except where prohibited by law. I don’t know whether this is illegal here.
5: You should have a good idea about condo prices in the area so can set an upper limit on your bid and not exceed it.
6: A 5% premium will be added to your final bid amount to pay the real estate agents or Realtors that are involved in the transaction. If you had an agent advising you in this condo auction, your agent would have gotten 2% and the auction company 3% and you would have been represented at no cost to you. Now that you have decided to attend without being represented by a real estate agent, the auction company will get the whole 5% and you are on your own. Why take a risk that may put you in financial danger when you get absolutely no reward.
Related web-site pages Las Vegas, Nevada Homes, Condos, Land and Industrial Commercial Real Estate, Las Vegas, Nevada Residential Real Estate News, Buying Las Vegas Resale Condominiums.
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1 Las Vegas Condominiums auction in Summerlin area, did these Adagio auction condo buyers get a good deal? // May 11, 2008 at 9:19 pm
[…] as these condominiums were sold as is. I have talked about this and other issues that concern buying a condominium from an auction as these condos are sold as is. Please note that when a property is sold as is, it doesn’t mean that you have to buy it as […]
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