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Esquire Real Estate Blog

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Where are the Best Deals? Real Estate Auctions or the Open Market?

Bryan Zuetel

Many times, people ask for advice on where to find the best deals on property, either as a home or for investment properties.  I still believe that the best deals are found on the open market, although sometimes you have to dig hard to find the deals.  Conversely, it is becoming more and more apparent that the best deals are not found at real estate auctions, and the California Legislature has stepped in to put a stop to some unscrupulous practices. 

A new law prohibits a practice known as a “shill bid” where a person bids at a real estate auction for the sole purpose of increasing the bid on the real property being sold by the auctioneer.  Certain very limited exceptions apply to this prohibition.  You can view the new law here: 

The very fact that persons for the auction companies or lender companies were making “shill bids” at these auctions should be a deterrent to potential participants in these auctions.  Although an auction for real estate might seem like the place to purchase real estate at a great price, you will be best protected in the common real estate process of offers, counter offers, disclosures, inspections, and escrow, where you are represented by a trained real estate broker and given sufficient time to consider the property condition, title record, and property value.

If you have any questions, Esquire Real Estate is here to help.