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Does An Absolute Auction Indicate Market Value? Downtown Tampa Condo
February 25th, 2008 categories: Tampa Real Estate, Tampa Condos, Downtown Tampa
Received an e-mail today advertising the absolute auction of a downtown Tampa condo later this week. The seller paid in the mid-$500s for the unit back in late 2006. Now, he’s going to sell it through an absolute auction. That means no minimum bid and no reserve to meet. This condo will go to the highest bidder.
So a quick check on the MLS indicates that the seller has tried to sell the condo through conventional methods, but withdrew it from the MLS back in January. It was priced at $549k when withdrawn.
So will this auction indicate the market value of this unit and similar units going forward? Will they get real buyers? Buyers who are looking to occupy the downtown Tampa condo? Or will it just be “investors” looking for a deal?
I’ll keep track of where it sells (heck I may even attend) and let you know.
Feel free to contact me if you want details on this absolute auction of a downtown Tampa condo.
6 Responses to “Does An Absolute Auction Indicate Market Value? Downtown Tampa Condo”
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Lenny - This article is a great reminder why Tampa buyers need to work with a local real estate expert who really knows their market so they will avoid buying a “bargain” that’s really no bargain whether it’s called an auction, short sale, foreclosure - the true values will still look good after your research and due diligence. Can’t wait to here how it goes!
A properly marketed and handled absolute auction targeting the user buyers, not investors, will prove to realize the real time value of the property on that day, on the terms of sale, in those market conditions, much like the stock market price reflects the real time value at any given point.
Cyndee,
Thanks-Yes a smart buyer will at least have done their homework or be working with someone who knows what’s going on for that property type and location.
Scott,
I agree with your statement, key words being “properly marketed”. Best price will come with maximum exposure to the target buyer(s). I’m sure the competitive nature of an auction doesn’t hurt either. Thanks for the input.
From an appraisal standpoint, an auction sale would not be considered “market value”. Furthermore, the property is more than likely in distress.
It might not be a comp for an appraiser, but future buyers and their agents will surely look at it as gauge for the building/area. It was listed on the MLS, which, (arguably) gives it maximum exposure. He could have begun a series of price reductions until finding the sweet spot. Now, it will go to the highest bidder in a small pool of buyers, those who show up. He’s betting on the competitive nature of the auction to bring a higher price than he could have gotten otherwise (my opinion).
I agree with you Lenny. It can be a good indicator, and the sale could be used in an analysis of the current market conditions within the condo market. However, as far as the definition of “market value” is concerned the sale price of the auction would not qualify.