Home auctions have become all the rage in the U.S. Auctions are a chance to bid on unwanted real estate at rock bottom prices. They inspired a Vancouver Island developer to hold a "condo auction" on Saturday. But was it really a great deal, or just smart marketing?
The Victoria-area developer was hoping to sell 40 units at "reflections" -- homes that pre-sale buyers walked away from when the market tanked.
Buyers were encouraged to secretly "bid" on the units, with a minimum price set by the developer.
"Our lowest is at $199,900. I someone comes in at $199,900 and no one else bids on that suite, then that [is the] person whose bid gets that,'' said Peter Gaby, Reflections Sales Director
But since would-be buyers didn't know what other people were bidding, the process seemed less like an auction and more like putting an offer on a condo.
It's similar to what Onni Group did two months ago, selling off dozens of its unsold condos in a " bulk sale." They too advertised "huge savings."
Tsur Somerville of the Sauder School of Business had some reservations about the so-called auction.
"What if they were 20 per cent above the market and now they're just gotten down to where the market was?" he said.
"You just don't know. Clearly from a marketing standpoint, when everybody else is trying to be silent about their discounts and you're out there banging the drum, we're all noticing,'' he said.
But auction or not, the idea did get noticed.
Fifteen units did sell, a number that amounted to half what the developer hoped.
But that's 15 more than were sold on Friday, proving that the first step to a successful sale is getting people in the door.
With a report by CTV British Columbia's Shannon Paterson
