Transcript Auction Listings on the MLS

Managing Auction
Listings on the MLS
James Harrison, RCE, CAE
President and Chief Executive Officer
MLSListings Inc
Auctions – A Real Estate Perspective
 In California, auctioneers are bonded by state
Controller’s office, however no license is required
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CAR opinion: Auctions could be included in the MLS if:
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A valid listing agreement exists
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A list price is entered (starting bid price or range is OK)
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Unconditional compensation is offered
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Some degree of agency is in place for the duration of the
time the listing will be on the MLS.
Otherwise, auction listings could appear in a separate section
of the MLS, such as a bulletin board.
Research – The Auction Business Is Unique
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The major types of auctions are:
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Absolute – No minimum bid and the property will be sold to the
highest bidder the day of the event.
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Minimum Bid – The minimum bid is published in advance and a
sale will not occur unless the minimum bid is reached or exceeded
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Reserve – The reserve price is not published, and the seller may
not be willing to accept less if bidding does not reach that amount.
However, seller may accept less than reserve.
Auctions have a language of their own:
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Crier – the auctioneer
Gavel/Hammer price – the accepted final bid (going, going, gone)
Buyer’s premium – auction company fee automatically added to
bid
Research - Sale Price Recording May Vary
 When adding a “buyer’s premium” what is sale price?
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The 5 Title companies contacted varied in their practice
regarding including a buyer’s premium in the reported sale
price.
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1 would include it
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2 may include it
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2 may break it out
 Two county tax assessors said they use reported contract
sale price as transfer value, but reserve the right to
reassess.
 MLSListings currently uses “contract sale price”
MLS Rules Adjusted To Provide Listing Guidance
 Auction rules were added to the section on Estate Sale,
Bankruptcy and Lender Approval Listings
 Auction listing requirements:
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Clearly identify it as an auction listing
Specify auction type: “absolute or reserve”
Specify if seller has minimum bid price
How participants/subscribers can represent a bidder
Compensation to be paid to the participant representing
the successful bidder
When/how potential bidders may inspect the property
MLS Rules Adjusted… (continued)
 If the seller will accept a purchase offer prior to the
scheduled auction, these are additional requirements:
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Must specify the compensation to be paid in the event of a
pre-auction sale
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Remarks must state that:
 The property is available for showing
 Purchase offers may be submitted prior to the auction,
specifying any time requirements
 If an offer is accepted prior to the scheduled auction, there
will be no auction
3 Commonly Asked Questions
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How is list price determined?
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How is the offer of compensation expressed?
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Usually price in listing agreement. We use the minimum or
opening price, if there is one; otherwise a challenge if none
exists (absolute auctions)
Currently no exceptions for offers of compensation
What disclosures are necessary?
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Public remarks – Identified as an auction; date & place;
inspection availability, material facts
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In private/agent/confidential remarks – Commission
details, how to represent a bidder
Listing With Inadequate Auction Disclosures
Minimal
Information
Absolute Auction With Required Disclosures
Disclosures
In Remarks
Reserve Auction With Required Disclosures
Disclosures
In Remarks
Minimum Bid Auction With Required Disclosures
Disclosures
In Remarks
Proposed Auction Disclosure and Search Fields
 Available in an upcoming software release