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How auctions get lower prices
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8. SELLS TO THE WRONG MARKET
To attract buyers, agents will market the home by advertising it to "start from" a low price. This is supposed to attract buyers. And indeed it does. But it attracts buyers who want to buy at the LOW price NOT at the price the seller wants.
Many of these buyers can't afford to pay much more than the price advertised. And so, on the day of the auction, there will be a crowd of buyers all wanting to buy at a low price.
The agent will then say to the sellers, "This is what the market is telling us."
But the agent has been looking in the WRONG market - a market BELOW THE VALUE of the home.
This is how auctions get lower prices.
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