The Truth About Real Estate Auctions

Do you ever hear about scams and worry that one might happen to you?  Well if we ever hear of a scam we write about it asap so you can avoid them.

What is the latest scam revolving around ?

You bet, real estate auctions.

Real estate auctions are interesting, usually there is a reserve price so a lot of people get brought in by a low advertised price and then get caught up in the excitement of it all and pay much more than they had anticipated or budgeted for.

Well just recently six people including two licensed real estate brokers have

pleaded guilty to conspiring to rig bids at public foreclosure auctions in California.

Prosecutors said that the conspirators would rig the auctions so that the prices would stay low.  Once the bidder bought the property at the public auction, the group would hold a second private auction where each conspirator involved in this scam would beidwhat they were really willing to pay.

Then the highest bidder at the private auction with his buddies would win the property and the difference between what was paid at the public auction and what was paid at the private auction was split.

This went on for about one year with more than $10 million in homes purchased at artificially low prices. 

The moral of the story with this is that you need to be careful with real estate.  There is a lot of money involved and so a lot of people want to put their fingers in the pie. 

Ask your real estate agent to tell you about the Realtor Code of Ethics.  You’ll want to know that they are ethical and will treat everyone as fairly as they can.

A recent investigation by the Sacramento Bee found that dozens of California real estate professionals charged with crimes or sued for fraudulent dealings still have their licenses. 

A real shame.

Email [email protected] if you want to work with an agent that is on the up-and-up!