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US auction house ramps up UK launch for this month

09 March 2009
Written by Rosalind Renshaw

The American auction house Real Estate Disposition Corporation launched adverts in national newspapers at the weekend for its first sale on British soil.

Headlined as ‘Lender Repossession Auction’ with 500-plus homes that must be sold, the five-day sale opens in Newcastle on March 31 before going to Leeds, Birmingham, Manchester and London on the next four consecutive days.

The speed at which REDC has mounted operations in the UK has caught its competitors by surprise, and none has yet released an official comment.

REDC is now expected to advertise on television, appealing to ‘ordinary’ people to go along to pick up a bargain at rock-bottom prices. Its website is www.AuctionToday.co.uk

Audiences can expect blaring pop music and men in tuxedos mixing with the crowds and whipping up buying fever.

REDC, America’s largest auction house, is also known for its use of For Sale boards in front of properties that are to be auctioned, which say “Lender foreclosure – public home auction”.

REDC makes much of the fact in its UK advertising that it has no starting prices and that catalogues are free. The firm will also have a mortgage broking facility on-site at each sale.

Most of the properties in the first UK sale are labelled with their last valuation – and suggesting that no one in their right minds would pay that. In the US, the norm is for buyers to pay 50-60% of the last valuation.

However, buyers do have to pay a premium of 10% compared with the average 2% buyers’ premium at property auctions in this country.

Last year, there were 7,505 repos sold at auction in the UK, accounting for around 18% of the total of 40,000 properties taken back by lenders.

Comments

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    Hi, good post. I have been wondering about this topic,so thanks for writing. I'll certainly be subscribing to your blog.

    • 03 May 2009 23:54 PM
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    Be truthful. A lot agents slap a picture in the window put a small ad in the press and say oh look we are marketing. There are some good agents but god there are some awful ones too!. Regarding getting best price, again, worth what someone wants to pay. Auction houses doing well? Maybe if EA actually valued at the correct rate then properties would sell, or is that to easy!!!!!!!!

    • 12 March 2009 17:44 PM
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    Of course we can't match the price estate agents achieve when we sell at auction but we gotta make a living, who cares about the client, you EAs don't!

    • 12 March 2009 16:16 PM
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    Come on be honest, if you had a property to sell would you put it in an auction? No of course not you want to get the best price, the only peolple doing well are the auction houses and parasite buyers.

    • 12 March 2009 16:01 PM
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    UK lenders are far more likely to sell properties that are in the UK by using UK auction houses like us. What is the point of selling a property in a London auction house when it is in Cumbria. FOR EXCELLENT AUCTION RATES PLEASE USE SELL BY AUCTION
    WWW.SELLBYAUCTION.ORG
    TELEPHONE: 08450509283

    Agents please join us as members it is free for you to do so.

    • 12 March 2009 13:16 PM
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    Why do UK lenders use USA auctions? Lenders why do you use Sell By Auction Tyne and Wear.
    www.sellbyauction.org
    Tel: 0845 050 9283

    • 12 March 2009 13:13 PM
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    This is a sure blow to the corporates living off reposession income.

    • 09 March 2009 19:10 PM
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    Snake oil.

    • 09 March 2009 13:08 PM
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    "Change"- I did Darwin at school so do appreciate that. Nice rant at the EA world. What is not in doubt that they are already advertising on TV , they must have or believe they have property from lenders. The lenders must now demonstrate they have achieved the best price, this looks impossible with that model. Parasite buyers will not pay 110% of value, by definition the lenders are than failing in their legal obligations and their doctrine of “treating clients fairly”. Everyone of these means, as ever, an EA will have done loads of abortive work for nothing. Change for change sake is not necessarily good

    • 09 March 2009 12:54 PM
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    Edward winge, winge, insults insults... sort it out will you I have one question for you what are you doing about the current situation to help others oh that's right NOT A LOT. Terry traditional Estate Agents don't make me laugh will you their is a very small % of you that don't rip people off constantly. Why is it we Brits are always moaning instead of being creative. I bet both of you complained about right move when you first heard about it. and are probably people like those who turned down JK Rowling when she sent her book to publishers or the guys that took a look at Dysons inventions and told him it would never take off. CHANGE happens for a reason you either embrace it, think how can you be a part of it or moan and winge. Get positive about something and stop thinking the world owes you something. Start thinking outside of the box and put your imagination to work.

    • 09 March 2009 12:36 PM
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    There is another important point to consider here. A prudent buyer would calculate his top bid to be 90% of what he would have bid without this buyers premium. This means the bank/building society in possession are not acting in the mortgagees interest and obtaining the 'best price'. Would this give grounds for a mortgagee to sue the bank for the difference?

    • 09 March 2009 12:35 PM
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    A fool and his money are easily parted.The prices quoted ie last valuation are meaningless. In Lpool, Manchester, London and Elsewhere new builds can be picked up on average for 50% of last years prices, so why bother with the hustle and bustle of a property auction. And anyone who pays a 10% fee to these people for selling them a property that they can go and find themselves is a bigger mug than they think. This is the Jim bowen and Bullseye watchword (look what you could of won).If your paying a 10% fee then your paying 10% to much.The last thing this country needs is a bunch of American spivs earning fortunes for something you can do yourself.If you want proof just look at the state of the American property market. Or maybe they think we are as thick as the American public.

    • 09 March 2009 11:52 AM
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    The Banks and Building societies should be ashamed of themselves. They have been given billions of pounds by the government. They are selling properties at stupidly low figures. They will then chase the borrowers for the shortfall. The way to get the best price is still to use a traditional agent and if need be reduce prices in sensible steps.
    I am doing 3 viewings today on a repo that the auctioneers have failed to sell in two auctions.
    What about British jobs for British workers. Estate agents are British Workers too. This is blatently allowing this US firm to bleed the current situation. I bet the UK auctioneers would love to get a 10% premium plus fees from the vendor.
    UK agents selling repos get a 1% fee if they are lucky for a lot of work.
    I reckon this smells...

    • 09 March 2009 11:42 AM
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    This is excellent news. This is what the UK needs to instill a bit of competition and get transactions going again. The only way out of this hole is to get prices down quickly (i.e. take out some of the 'bubble inflation' to where people actually feel that properties represent good value again. The quicker this happens the quicker we can get back to a properly functioning market. So this is good news for everyone.

    • 09 March 2009 10:32 AM
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