Posted by Matt (MPD) IL on July 14, 2002 at 14:03:39:
JT makes a good point, although I’m not so sure the seller is including themselves as a possible bidder in the circumstance.
More likely we don’t know exactly how the ad is worded. It could simply state that the house will be sold to the highest accepted bid. With that in mind the seller could legitimately reject any and all offers.
In any case, in my experience with these types of transactions the wording and pricing in the ad is designed to get the buyers to the auction. 90% of the potential buyers will leave shortly after they arrive and hear what the bids have gone up to. (They thought they could “steal” a house at the advertised price).
And what the seller will have left is those that are truly interested in the property. At this point people’s emotions will come into play. Husbands/wives will fall in ‘love’ with the house and refuse to let it go to the next bidder, subsequently the price continues to rise and eventually all other bidders back off. If the price is still not high enough, the seller has the right to refuse the offers based on any number of reasons that should be spelled out when you arrive to start bidding in the first place.
The whole idea of selling a house this way is to create the illusion of a bargain. It happens all the time and we’re seeing it more and more in this area especially during the nice weather months when people are most actively looking to purchase and move. The ad will undoubtedly draw a great number of “interested” bidders but only a few will end up staying for the end result. It is a marketing tool that rivals “closeouts” and “clearance” sales at most supermarkets and the like.
However, this could be as JohnBoy pointed out earlier, a second mtg, a foreclosure, or any other number of things like a burnout etc. Let the buyer beware.
MPD Investments Inc.