Aliant Bank is auctioning the Water’s Edge neighborhood on Lake Martin. It’s going off tomorrow at 1 PM at the end of Coosa 20. PLEASE NOTE IT IS A NON-ABSOLUTE AUCTION. This means they have a reserve price, if the winner is too low, THEY DON’T HAVE TO SELL.
Water’s Edge, formerly known as Eagle Point, was a proposed waterfront development on the Big Kowaliga section of Lake Martin. It was (by my unscientific estimation) one of the largest, if not the largest, waterfront loan in Aliant’s history. It is located at the end of Coosa County Road 20, directly across the water from the old Veazey’s Marina near Willow Point.
Aliant loaned the money to real estate developers that tried to market it as Eagle Point on Lake Martin, but the bank ended up taking that land back, and now has hired auctioneer JP King Auction Company to auction off the whole shebang.
My second grade son has a little savings account with Aliant Bank. You know the type – you go in with them to open it up, it’s all cute, the ladies in the bank give him lollipops and what not. When he gets $10 for his birthday, I have tried to encourage savings by telling him I will match whatever he deposits. We call it my 401 “J.”
He’s not very old, so he hasn’t had many birthdays. No matter, because Aliant, or at least J.P. King, thinks he has enough bling to swing at the auction. Yes, they sent an auction flyer directly to him in the mail.
Yes, they are marketing to my second grader. Do they really expect him to bid for lots that are worth, in total, at least a couple million dollars?
I am sure they don’t. Obviously, they sent it to all account holders if they are sending it to a minor with about $34 in his account.
But it does draw one into questioning the manner that Aliant thinks this property will sell, and the advertising used to get it done.
Will this auction be a success for Aliant? Will they sell all of the lots and homes in a non absolute auction, without neighborhood covenants and restrictions (maybe they will be present at auction, I don’t know), with minimal advertising strategy, virtually zero web presence, and minimal effort to garner referrals from Lake Martin realtors?
I have no clue. We will see, though.
Because I am a glutton for punishment, blissfully disregarding the “fool me twice shame on me” principle, I have been registering people for this auction. Don’t contact me now, it’s too late. JP King requires that broker registrations be turned in yesterday. If you are just now reading this and want to bid, you’d best contact JP King Auction Company directly here. Good luck.
So why do I think that JP King puts broker registered buyers at a disadvantage? Because they pressure buyers to declare an opening bid when they fill out the registration form.
That’s right. Any real estate broker that helps a buyer register has to fill out a blank that says “Opening Bid.” I think this is antithetical to the whole auction concept. The reason buyers like auctions is (they feel at least) they start low and go high. JP King wasn’t forcing the buyers they register to make an opening bid. So why require it of ones that us brokers register? And what buyer in their right mind would toss out an opening bid, a week before the auction, without any neighborhood covenants, deeds, and restrictions? And what real estate broker would encourage a high opening bid if they care one whit about their reputation or their buyer?
JP King’s answer to this was: this is how we calculate the Broker Referral Fee. For this auction, they offered to pay the broker (e.g., me) 2% of the opening bid and 1% of any amount above it. See —> trying to get brokers to pump up prices. Again, I feel this is antithetical and just downright dumb. My policy was to disclose all of this to the buyers. It didn’t matter to the buyers because in this auction they are paying no buyer’s premium (aka commission) like they do in most every other auction, and I do applaud JP King and Aliant for that aspect. When I registered my buyers, we defeated this by entering a nominal amount like $50 in the opening bid amount. I cleared this with JP King ahead of time, but when we turned the registrations in, I was told by a very nice JP King representative that “(the) VP (of JP King) just cannot go to the seller with such a low opening bid” even though they had already approved that.
I dug deeper into JP King’s registration packet and found a clause that said we could leave the Opening Bid amount blank. When I pressed this point, the very nice rep said “yes, that’s OK.” I countered with, “so you would rather us leave it blank, which is in effect an opening bid of zero, than to put in something like $10?” She: “yes.” Therefore we left it blank.
My point at telling this story is to illustrate my opinion of the extreme pain in the neck it is as a real estate broker to register someone to bid on this auction at Lake Martin. Maybe other JP King auctions are different. Maybe in other markets and other locations, their Broker Registration process is smooth, easy, nice, and encouraging to brokers. But I can say that in my experience with the auction by Aliant at Water’s Edge, it was a huge pain in the neck. Information flowed like molasses. I started quizzing JP King for auction information the second they made this public, and I found that quite often I was getting info later than people that called them directly. I also was discouraged by their flip flop on the Opening Bid concept. Principally, the fact that they make it so hard and pressure the broker to pressure the buyer for a high opening bid, I feel that, in this particular case and this particular auction, JP King Auction Company put broker registered buyers at a disadvantage.
Do you think they tell potential sellers this? Do you think, when the VPs of JP King are on the phone or in a meeting and trying to close a potential seller on hiring them, that they tell sellers what a great relationship they have with the local real estate brokers? And how everyone will flood in to register all their buyers? Hogwash, I say, if my experience was typical. Then again, maybe this was an anomaly. Maybe all of their other auctions are daisies and tulips.
“This is all just sour grapes, John, because you had two of these homes listed before. You’re just an auction hater because you are a greedy, slimy, real estate broker,” you might say. Maybe you’re right on all cases of that statement. I am human, and therefore by definition a flawed, fallen sinner. When I think back a couple or three years ago and remember the dreams we all had to resurrect Eagle Point into Water’s Edge, and now to see it like it is, I can’t help but pine for how well it could have gone. I don’t hate auctions. I just don’t like any seller not getting the best service. I think this auction has a lot of hurdles to hop (no one knows the covenants and restrictions ahead of time, will these apply to off water lots, when will roads be done, limited inspections, limited information, it might rain) but I wish them the best.
I am not a Democrat, I am not a Republican. I am a capitalist in almost the purest sense of the word. I am for freedom and the American way. If this works for Aliant, more power to them, I say. The market has spoken.
I have written extensively about Water’s Edge in the past and also taken tons of video. PLEASE KEEP IN MIND that these are old posts from when I had the homes listed, so the pricing etc. NO LONGER APPLIES: