Roger Pollock , the developer behind Buena Vista Custom Homes, wrote customers Nov. 16 to announce that 248 houses in Buena Vista's admittedly overbuilt subdivisions from Beaverton to Bend will be auctioned off. The Real Estate Disposition Corporation of Irvine, Calif., will stage the auction the weekend of Dec. 15.
REDC's advertising blitz—"Must Be Sold!" "Starting From $69,000!"—obscures the fine print, which seems Roguishly tilted to Pollock and REDC. For starters, the auctioneers add a 5 percent premium to the final sale price. Unlike a traditional home sale, buyers must complete all inspections in advance.
And if the winning bid is below a secret minimum price set by Pollock's company, either the property goes back to auction or the bidder puts up the difference.
"There's a lot of risk involved," says Beaverton broker Michelle Berry, who questioned the ethics of the auction terms on her real estate blog, pdxre.blogspot.com. Pollock alluded to the advertising in his letter, which we excerpt (with our translation) below:
"Dear Current Homeowner,"
"Due to conditions which currently exist within the real estate market in Oregon, we have decided to attempt an alternative retail technique…"
(Then the bubble popped. I didn't know what to do.)
"REDC will use some very aggressive advertising that suggests very low pricing…We anticipate that the actual selling prices will be in-line [sic] with the market."
(Don't worry when you see a house just like the one I sold you being advertised for half what you paid, because the real price is way higher.)
"We feel that this is ultimately in your best interest…"
(Now stop bitching.)
(Rogue of the Week.)
Pollock—no stranger to auction halls (see "Not a Pretty Picture," WW , Jan. 24, 2001)—didn't respond to messages left with employees.