Vancouver Condo Auctions

Over the past 2 weeks, at least two condo developers have put condo developments for sale under auction.

The problem with auction type sales is the absence of full disclosure. Now 10 days after one auction has taken place, the problem is that the developer will not disclose the status of the auction. All we know is that far less than 50% of the units to be sold, under a so-called Dutch Auction method, were sold, for prices 25-40% less than list price.

We seldom recommend buying using the auction process because it is so difficult to know the details of each sale. For instance if the developer sells a condo under auction that was never pre-sold, the buyer has 10 days to back out of the contract. But if the developer sells a condo that he has taken back from a buyer, then it is a resale and the buyer can't back out. In addition, when units are auctioned, they are often "made-up" meaning that high end appliances, electronics etc are placed in the unit, but when the transaction closes, regular appliances show up. Often the auction contract will simply state "stove, fridge, washer/dryer" making it impossible to get recourse.

We are very focused on proper disclosure in contracts. And of proper disclosure of market conditions. In one Vancouver development, the developer is bragging that he is still getting sales despite not lowering prices. What was not disclosed is that for every unit now being sold, he is now throwing in a $70,000 2009 Mercedes SUV!