In eleven days, Brazos Place will auction as many as 20 units to the lowest bidder. The May 17 auction has received lots of press and attention — in particular because the units are being promoted with incredibly low opening bids. The opening bids start at a too-good-to-be-true $80,000 — as much as 58% lower than the original unit price.
Are the opening bids too good to be true? Like any auction, it’s important to read the fine print. Here are some of the rules of the Brazos Place condo auction:
– The opening bids are not the reserve bid: the reserve bids have not been made public. The units absolutely will not be sold for the starting bid price.
– All buyers must pay a 4% buyers fee on top of their bid.
– Like any resident, buyers will need to pay a monthly condo fee. The average is $400 per month.
– To participate, you must register by 5/14.
– Before you bid, you must provide a $2,500 deposit via cashier’s check for each unit you are approved to bid on. You need to show them the check to bid, but you don’t hand it over unless you win.
– Successful bidders need to put a 3% deposit if they are purchasing one unit or a 5% deposit if they are purchasing multiple units. This needs to be paid upon successful bid but can be paid with a personal check.
– To be eligible to bid, you must be pre-qualified by Bank of America — even if you have other arrangements for a loan.
– You can register your broker / agent and they will receive a 2% commission.
– You must close within 30-days (or 45-days for an additional $1,500).
– If you don’t close, you will lose as little as $2,500 or as much as 3% of the purchase price.
These rules are not unusual for a condo auction — in fact, they are quite fair. But it is very important for bidders to understand how the auction will work. In particular, it is essential for buyers to know that they will need to meet a reserve price and pay a 4% buyers premium, important considerations for bidders looking for a great deal.