February 25, 2009

A Plugged-In Reader Calls Shenanigans And Sets The Record Straight

From a plugged-in agent with regard to the auction of 3731 Fillmore #2:

I had clients who were interested in showing up to the auction today, but who could not pull it together by this afternoon. Good thing we did not waste our time! Read on...
I have been going back-and-forth with the listing agent/auctioneer over the past few days. I also exchanged e-mails with the previous listing agents at Brown & Co. Turns out that this is just a decision that the Seller made in an effort to [sell it fast].
Well, it turns out after all that there was a confidential "reserve price" (i.e., minimum accepted bid price) set by the Seller, which the auctioneer was aware of, of course.
Apparently this price was $550k and tons of people showed up today but nobody went up that high, and therefore nobody walked away owning 1/6 of this building today w/the exclusive right to occupy #2 or any unit for that matter.
The listing agent told me this morning prior to the auction that the other 4 vacant units may very well go up for auction today as well if things went in the right direction; but OF COURSE nobody wanted to offer anything above $550k. Duhhh! [Editor's Note: As you might recall 3731 Fillmore #2 failed to sell for $549,000 when last listed on the MLS.]
I told the listing agent to let me know when his Seller gets back in touch with reality and the current economy/market. What a frickin...waste of time!

Our apologies for any unwitting role we played. That being said, we now have another data point: a high bid of $410,000. Now about all that "pent-up demand"…

Now Up For Auction In The Marina (And Originally Asking $699,000) [SocketSite]

First Published: February 25, 2009 6:00 AM

Comments from "Plugged In" Readers

thank you for highlighting again.

lots of unanswered questions here

Posted by: resp at February 25, 2009 6:19 AM

"lots of unanswered questions here"

And one answered question, there are plenty of buyers out there willing to pay $500/sqft for a TIC without parking in the almighty district 7.

Posted by: diemos at February 25, 2009 6:27 AM

I don't really have any problems with this "phony" auction strategy. In different market climate, it would probably have been a successful way of suckering in people into overbidding. At least it is a bit more transparent than the sleazy tactic prevalent in 2004-06 of setting a low asking price and then relying on the "buyers'" agents to "coax" their client into a wild overbid (driven by the combination of the agents' natural greed to garner a commission by having their clients "win" the property and the opacity of the bidding process where no one knows what the other bids are).

It's encouraging that the buying public is wising up and that this couldn't even break $410 (and only a few people interested enough to actually bid). It seems that the consensus from the earlier thread was that this would rent around $2K/mo (I ignored sfrob's high-side estimate of $3K because he was so off on his estimate of selling price). Even $410K is WAY too high, in light of the attainable rent, the near certainty that rents will continue to fall, and that it is a TIC. But at least it's closer to fair value. $710K was clearly a phony sale.

Again, though, I'm not too bothered by the sales tactics. Typical sleazy real estate tactics by the "professionals" in SF. Caveat emptor.

Posted by: LMRiM at February 25, 2009 6:49 AM

All I had to read was "the four other vacant units in the building." Then I fell over laughing.

Posted by: k10 at February 25, 2009 7:04 AM

Posted by: Stu at February 25, 2009 7:15 AM

Lame.

Posted by: Paul Hwang at February 25, 2009 7:33 AM

Reposting it on this thread:

sfrob,

You were correct about market discovery. These auctions do show the level of demand as well as the level of disconnect between sellers and buyers.

You win, but in a way we all win.

What we need in this market stalemate is price discovery and kudos to the sales guys for jumping into the shark pond there. Too bad it backfired but we have to welcome everything that will show where this market stands.

Posted by: San FronziScheme at February 25, 2009 7:48 AM

I never saw how this auction was marketing, the wording used, etc., -- but if a claim was made that "property will sell to highest bidder" and "must sell by Tuesday" without disclosing that a reserve price existed, isn't that false advertising?

Maybe there's an Attorney General for the City of San Francisco who could answer this question?

Not only are these tactics sleazy and time wasters, they're possibly illegal.

On a larger macro scale, the economic mess we're in--that the entire world is in--isn't the failure of market mechanisms or capitalism, but rather the failure of integrity. The good guys can't sit quiet and continue to let the bad guys get away with their slimy tricks forever.

[Editor's Note: The language from the listing: "Must Sell by Tuesday, February 24th. Auctioned to the Highest Bidder at the Property at 1pm." No mention of a reserve on the MLS.]

Posted by: DataDude at February 25, 2009 7:53 AM

This sort of bodes ill for the whole idea of this type of auction. If buyers get the idea that sellers set reserves at prices that have already (publicly) failed, then why would I as a buyer bother showing up? The failure of the initial listing gives the buyer a clear upper bound.

Posted by: El-D at February 25, 2009 8:03 AM

That language is unambiguous. Dishonest "professionals" suck.

Are listing agents required to hold business licenses with the City of San Francisco? I don't think the AG is the office to take this up with, but some sort of Better Business Bureau within City Hall. This listing agent should have their business license revoked.

Posted by: Debtpocalypse at February 25, 2009 8:15 AM

"This sort of bodes ill for the whole idea of this type of auction."

Not really, the real auctions will be here soon enough.

Posted by: diemos at February 25, 2009 8:15 AM

don't know r.e. law but i'm gonna guess the misleading MLS would be considered "marketing material" rather than a legally binding advertisement. ya know, like when agents list multi unit buildings under the SFH section (we argued about the ethics of that a few months ago).

would still love to know about whether the buyer of unit 1 at $710 was a sucker or an insider. come to think of it, it didn't look lived in.

Posted by: resp at February 25, 2009 8:17 AM

I for one am glad they did this auction. It shows the seller what the reality is in today's climate. Not that it will jolt the seller out of his / her sense of denial, but more and more auctions like this, in which the public bids reasonably, even if no sale actually takes place will eventually force these sellers to face reality (or forever go into hiding). Of course it's easy to do the latter if you own an asset on which you have no debt / cost of maintenance, much harder to do so on an asset with high cash carrying costs.

I am curious, what did the agent say when the plugged in tipster said to get back to him when his seller gets a sense of reality? Did the agent do what most RE agents used to do -- claim the buyer was the one on drugs (Re always goes up, there is no more land blah blah blah) or did this agent understand the true state of the RE market?

Posted by: Cal Housing Bear at February 25, 2009 8:20 AM

I agree with Debtpocalypse and DataDude(tte) that these are sleazy, misleading and perhaps even illegal tactics.

I just sort of disagree with the idea that we should look to the AG or SF bureaucracy to solve it. It just won't happen, and even if it did, the lobbyists would get the regs "loosened" or not enforced. It might even be worse, because of the patina of respectability that increased regulation gives an activity. It's a little OT, but does anyone seriously think that Madoff's antics weren't known to at least a few people inside the SEC? Does anyone seriously believe that Madoff could have pulled off so brazen of a fraud if he had not been the chairman of the quasi-governmental nasdaq on his resume (and his brother and partner, Vice Chairman of the NASD)?

The best way to counter sleazy tactics is knowledge, through blogs like this, word of mouth, and direct challenges to the REIC "professionals" when they are encountered. As more and more people become aware of just what charlatans and phonies the industry attracts, it will be forced to police itself by self-interest.

Now, go bash a realtor you know today :) (Just kidding.)

[Editor’s Note: Do keep in mind that the reader correctly calling shenanigans above is an agent.]

Posted by: LMRiM at February 25, 2009 8:29 AM

I've only spent about 5 minutes researching the codes, but it certainly appears that these guys have violated a number of state laws governing auctions -- but the statutory penalties appear to be pretty light, although imprisonment can result. Here are a few:

Civil Code § 1812.608. In addition to other requirements and prohibitions of this title, it is a violation of this title for any person to do any of the following:
(a) Fail to comply with any provision of this code, or with any provision of the Vehicle Code, the Commercial Code, any regulation of the Secretary of State, the Code of Civil Procedure, the Penal Code, or any law administered by the State Board of Equalization, relating to the auctioneering business, including, but not limited to, sales and the transfer of title of goods.
. . .
(c) Place or use any misleading or untruthful advertising or statements or make any substantial misrepresentation in conducting auctioneering business. A first violation of this subdivision is a misdemeanor subject to a fine of five hundred dollars ($500); and a second or subsequent violation is subject to a fine of one thousand dollars ($1,000).
. . .
(j) Misrepresent the terms, conditions, restrictions, or procedures under which goods will be sold at auction. A violation of this subdivision is an infraction subject to a fine of seventy-five dollars ($75).

Civil Code § 1812.604. Except as otherwise provided in this title, any person who violates any provision of this title is guilty of a misdemeanor, which offense is punishable by a fine not exceeding one thousand dollars ($1,000), or by imprisonment in a county jail for not more than one year, or by both that fine and imprisonment. In addition, upon a conviction of any violation of this chapter, or of any crime related to the conduct of an auctioneer, the court may issue an injunction and prohibit the convicted person from acting as an auctioneer or an auction company in this state, in which case the court shall inform the Secretary of State of that action.


The codes provide a strict regulatory scheme for auctions and auctioneers (right down to the size of the sign at the door). One cannot simply decide to "auction" off property or anything else without complying. I don't know, but suspect, that these "auctioneers" ignored all of these laws. This is not a procedure one can just undertake on a whim. Given the quite apparent fraud in this particular case, I agree with others that the city attorney (civil enforcement) or D.A. (criminal enforcement) should take a look at this. Even better, how about fellow realtors sending a message that they will seek such action against those who engage in such practices?

Posted by: Trip at February 25, 2009 8:33 AM

What a perfect representation of the scum that are real estate professionals. A bunch of shady hucksters engaging in near-illegal behavior.

Here's hoping for financial ruin for these scumbags. Here's hoping they land in jail or in court and get wiped out.

Wiped out would be too good for real estate scum like this. Someone sue these bastards. Please. Sue their asses.

Posted by: SFHawkguy at February 25, 2009 8:46 AM

LMRiM, less oversight brought us to this current mess, imho.

Sure, unmitigated booms and busts are very entertaining to watch, but they are very destructive socially. What will the recent immigrants that got foreclosed do to survive in the next 10 years without the low-entry level jobs?

Had the previous rules been kept and enforced, the result would have been a very boring and stable/stale economy. Low growth, narrow pay scale, higher taxes, social safety net, very European. Boring, boring, boring...

I understand you are expecting to make a killing in the upcoming collapse in prices (and I am too) but what good is owning a mansion paid at a huge discount if you have to hire a 24/7 security guard?...

Posted by: San FronziScheme at February 25, 2009 8:52 AM

That's a good start Trip on some possible causes of action. There are many. There is plenty to file suit. Shit. If I was one of the marks (victims) of these real estate hucksters, e.g. if I put a bid in on this TIC at the so-called auction, I would probably file suit in at least small claims court and try to get compensated for my lost day(s) dealing with a fake auction.

And these guys deserve more than small claims court; I hope these scumbags get suit filed on their asses in big boy court.

And if the City was smart it would throw these crooks in jail and send a message to other realtor scum that are contemplating similar quasi-legal schemes to unload their garbage on an unsuspecting public. The City absolutely should send a message that this behavior will not be allowed. GO AFTER THEM!

Posted by: SFHawkguy at February 25, 2009 9:08 AM

I was at this auction yesterday. It was a joke. First off, these guys were the farthest thing from "real estate professionals." I would not buy a pack of gum from them, let alone a home.

Secondly, it just goes to show the importance of actually having a "real estate professional" to sell your property in this market.

Posted by: Dont Worry About It at February 25, 2009 9:08 AM

It would be their just deserts to get a $1K fine for illicit auctioneering after rejecting the last bid of $411K ($1K over the highest accepted bid).

Posted by: Jer at February 25, 2009 9:19 AM

"The best way to counter sleazy tactics is knowledge. . ."

Agreed! And great discussion everyone. In addition to legal channels, what about someone calling the Real Estate desk at the San Francisco Chronicle to get an article written up? Real estate auctions will be more commonplace as the SF market continues to tank, so it's in everyone's best interest that all the terms be spelled out clearly from the getgo.

My guess is the Chronicle's Real Estate section has an even wider readership than socketsite, and it might attract more buyers to this site who don't have the benefit of being plugged-in. Plus more egg on face of auction listing agent and seller, and hopefully reprimands by Office Manager of listing agent. All good!

And thank you to the Real Estate agent who tipped us off to this shenanigan.

Posted by: DataDude(tte) ;-) at February 25, 2009 9:23 AM

If the high bidder wanted to make this an issue, they could certainly sue to obtain the property and expenses. I do hope the high bidder does this.

Posted by: Tom at February 25, 2009 9:27 AM

9:30 update - the MLS listing is gone within the last half hour. keep an eye on craigslist.

Posted by: resp at February 25, 2009 9:34 AM

[Editor’s Note: Do keep in mind that the reader correctly calling shenanigans above is an agent.]

I think this is a good point. In all professions there are crooks. Lets appreciate the ones who arent (like the OP) who try to disinfect the process with sunlight .

Posted by: mac at February 25, 2009 9:39 AM

I just accessed the listing using the MLS link in SS's previous thread.

Posted by: anoanon at February 25, 2009 9:39 AM

Posted by: MLSlisting at February 25, 2009 9:44 AM

Given yesterday's announcement, I doubt the Chronicle has interest in running an article about any type of auction....


Posted by: Debtpocalypse at February 25, 2009 9:48 AM

I think yesterday is a perfect example of why auctions WILL NOT take a larger place in SF real estate in the coming year. Obviously it doesnt work.

Posted by: adam at February 25, 2009 9:59 AM

Very true, but the show must go on on order for the paper to stay in existence, right?

Posted by: truebut... at February 25, 2009 10:00 AM

I think yesterday is a perfect example of why auctions WILL NOT take a larger place in SF real estate in the coming year. Obviously it doesnt work.

I'll beg to disagree. It does not work on the seller's side because the seller didn't want to play the game, but that was a pretty good demonstration of the gap between demand (410K) and supply (550K).

Posted by: San FronziScheme at February 25, 2009 10:09 AM

Auctions are a quick way to force "price discovery."

Obviously, the seller didn't like the discovered price, and decided to pursue "price denial" instead.

Property can't change hands unless buyers and sellers are willing to agree on price. Sticking one's head in sand and hoping for a miraculous recovery soon is a flawed strategy. Next year, the price will be even lower than $410K.

Denial ain't just a river in Egypt!

Posted by: DataDude(tte) ;-) at February 25, 2009 10:18 AM

Real estate sales is the wild west, where every trick in the book is used to get buyers to overpay. There is just TOO MUCH MONEY in it to keep the dishonest people out, and so there are a lot of dishonest people in that business.

That said, whatever the top price really was surprised the heck out of me. $500psf for a redone tic? In 2006, non-redone two unit buildings were selling for $650psf. You needed to put in $100psf just to make them liveable. $500 psf? Yikes.

We'll never know what the top price really was. What you are all forgetting about is the possibility that the high bidder was a shill bidder, there to place the last bid under $550K to keep someone else from "winning" at a low price.

Real estate is the wild west. Whether you have a realtor or not, assume you are being taken for a ride. The system has been carefully honed to separate you from your money. That said, there are honest people in any business. I'm sure there are a lot of honest drug dealers who wouldn't cheat you out of a nickel.

The video here (under the heading "auction results") shows the sleaze factor. I've bought cars, antiques, etc. at auction and I've NEVER seen the auctioneer chastising the crowd.

http://sfishomeblog.blogspot.com/

It also looked like if the bidding went over their price, they would let the over bidders choose other units. This clearly was a sham to drive interest, hoping for a frenzy that never materialized. It exposed the sales organization, the auctioneer, and to a limited extent, the industry in general, for what they really are.

Posted by: tipster at February 25, 2009 10:56 AM

Nice video documentation.

Good lord.

I think those guys tried to sell me speakers out of the back of a van once.....

Posted by: Debtpocalypse at February 25, 2009 11:31 AM

Lawyer here. Either Brown & Co. or the auction company, or both, is probably in violation of Cal. Bus. & Prof. code 17200 for false advertising. Very strong argument that "must sell" on Feb. 24 and "will be auctioned to highest bidder" would lead a reasonable consumer to believe that there is no reserve. The fact that they disclosed the reserve just before the auction started helps them a little bit, but many people probably wasted several hours traveling to this believing that this was a must sell situation.

[Editor’s Note: While Brown & Co. originally marketed the building, as far as we know they were not the agents of record for this listing or sale.]

Posted by: looking at February 25, 2009 11:47 AM

Nothing to add here other than that the video was absolutley hysterical. Even the high bid in this case should be considered suspect. I would be embarrassed beyond belief to be associated with the owners of this building trying to shill this place using these tactics. I like the way the auctioneer cranked the value up in 25k increments.

This is among the worst cases of integrity / judgment that I can recall.

Posted by: eddy at February 25, 2009 11:47 AM

That video is great.

I grew up in the Bronx in the 1970s, and those guys auctioning the property and the whole scene brought me back in time to when the guys on my block would sell TVs and stereos that "fell off a truck" at the local "Youth Center" (which doubled as a numbers joint and meeting place for the small time organized criminals), lol.

Posted by: LMRiM at February 25, 2009 11:54 AM

I won't go as far as LMRiM, but I wouldn't be surprised if they were actual foreclosure types helping evictions/trash outs/auctions. It's a pretty wild world outside SF.

Posted by: San FronziScheme at February 25, 2009 12:03 PM

The best way to counter sleazy tactics is knowledge, through blogs like this, word of mouth, and direct challenges to the REIC "professionals" when they are encountered. As more and more people become aware of just what charlatans and phonies the industry attracts, it will be forced to police itself by self-interest.

If this is indeed true then names are going to have to be named. Given a choice between oversight/torts or public shame, the only difference is who receives the identifying information. The oversight people/DA in the former case, the public in the latter.

Posted by: EH at February 25, 2009 12:17 PM

It's the same agent that did the auction on the 1br on 9th av in October, only 1 bidder went to the auction, and put the minimal bid, and withdrew it the next day. So the auction got extended until the following Tuesday and it finally sold for 278 about a month ago

http://www.socketsite.com/archives/2008/10/up_for_auction_with_no_reserve_but_a_starting_bid_of_28.html

Posted by: marcel at February 25, 2009 12:20 PM

After looking at the video it is clear that this was not a professional auction.

I think the sellers thought "hey, lets give it a try. We can do a DIY auction at no cost. We have nothing to lose and everything to gain."

Kudos to sfishomeblog for posting the video. More sunlight on a dirty process.

Posted by: The Milkshake of Despair at February 25, 2009 12:28 PM

This wasn't DIY. I bet it looks so unprofessional because they were caught off guard by such little interest and the $410K outcome.

Posted by: Michael at February 25, 2009 12:59 PM

The agent talking in the video featured on the SF is home site is Bodhi Kroll with Kroll Realty in Kensington, CA.

As I understand it, he managed to obtain the exclusive franchise for SF/Marin "auctions". I have actually run into him on a professional basis before. Definitely on the shady side. I know he was quite excited about his new franchise - unfortunately it looks like he is going to get himself into a lot of trouble with it!

Bodhi Kroll
STATEWIDE Real Estate Auctions
396 Colusa Avenue
Kensington California
5103902910
KrollRealty@comcast.net
5105279310

Posted by: anonnn at February 25, 2009 1:22 PM

I almost mentioned the following this morning, and it is that there have been a handful of similar "must sell" auctions that I have observed in the East Bay. One was for 1928 Monterey in Berkeley. It is no longer shown as active - it was also run by Bodhi Kroll.

Another is 27 Anson in Kensington, listed as still "available" at movoto, here, despite the "must sell" language for an on-site auction scheduled for "2/17" - another one run by Kroll:

http://www.pacunion.com/40395384

Posted by: Debtpocalypse at February 25, 2009 1:33 PM

Here's where to file a complaint. Let's put this loser out of business:

http://www.dre.ca.gov/cons_complaint.html

Posted by: the backi at February 25, 2009 1:45 PM

Bodhi Kroll. Wow, yeah that guy is a piece of work. He is also infamous for posting hundreds (yes, hundreds) of other people's listings on CL with minimal information (mostly easy bay properties) in order to get you to call him as your buyer's agent. Misleading info all over the place.

This is hilarious.

Posted by: Irwin Fletcher at February 25, 2009 1:45 PM

So this is the creep scumming up cl with all his trash listings.
Thanks, jackass.

Posted by: jonj at February 25, 2009 2:15 PM

The guy mentioned above might engage in underhanded, possibly illegal practices, but keep in mind he couldn't advertise and conduct an "auction" at 3731 Fillmore #2 without the seller's consent. My understanding is that sellers must sign off on all marketing materials.

I guess this is a legal question more than anything, but wouldn't the seller also be guilty of false advertising and/or misrepresentation?

Or do agents take all responsibility when things go wrong from a legal perspective? (Except of course when the seller knowingly withholds material facts from their agent).

Posted by: DataDude(tte) ;-) at February 25, 2009 2:17 PM

I love the videos! One word...

WOW!

I've never seen a real RE Auction before, but I can't imagine that this is how it's supposed to go....

I'd be really ticked if I were the building owner...or even the bank financing it....

Any word on who the $410K bidder was and if it was legit?

Posted by: Poor in Pac Heights at February 25, 2009 2:33 PM

Interesting...This company also had an auction for a property on Edwards St in North Berekely last Monday. I went to see the house over the weekend and something didn't quite seem right so I decided to pass. I don't know if it actually sold but based on the comments above I wouldn't be surprised if it was passed in. It's still listed as active on MLS.

Posted by: Willow at February 25, 2009 2:36 PM

This is a sign of the times. [Removed by Editor] Anyone still think that prices are going up anytime soon?

Posted by: FSBO at February 25, 2009 3:12 PM

There is a HUGE amount of psychology in the pace and word choice involved in a good auction. This gentleman has no clue how to do it. One needs to light that fire of excitement and urgency . . . although that may have only gotten $450k in this case.

Posted by: Tom at February 25, 2009 4:23 PM

the auctioneer kept saying "at 410[K] we will only be "speaking" with one person today...at 410 there is only one unit to see today, I can't even discuss any other unit at 410." So if 410K did not meet the reserve price, what did he speak with the 410 guy about?

Posted by: condoshopper at February 25, 2009 5:25 PM

It seemed from the video that he stated the rules of the auction before it started. There was a reserve. They would take the top 3 bidders and let them pick the unit they wanted in order of the bid price. If they didn't meet the reserve, they would take the top 3 inside, tell them what the reserve was, and they could meet it or walk.

At the end, they changed the last rule to only allowing one bidder to meet the reserve price.

Posted by: tipster at February 25, 2009 5:36 PM

oh yes, that explains what happened.

Posted by: condoshopper at February 25, 2009 5:47 PM

fyi, they handed out a 1 page disclosure to every bidder, and anyone else who cared to grab one.

The 2nd thru 4th terms:

* The seller has the right to refuse any offers if the reserve is not met
* The reserve price is confidential and will not be disclosed, except to the high bidder if the reserve is not met
* Seller's are not under the obligation to sell unless a confidential reserve price is met

The advertising that got everyone to show up left a lot to be desired (I'll leave the legality of that to the lawyers) but they did disclose the reserve on site.

By the way, the true highest bidder of $411,000 was an agent who was representing a buyer. They refused to accept his bid. He was no shill and gave the auctioneer "dudes" hell for not accepting it. He must have reiterated the $411k offer 3 or 4 times and worked up the crowd towards his cause. Heck, if I were the Auctioneer I would have accepted the $411k bid and tried for $412k. Just another example of why I refered to the whole thing as a farce/comedy of errors.

Posted by: SFisHOME at February 26, 2009 1:58 AM

Hi everyone, I just want to state for the record that we are a family of THREE GENERATIONS that have purchased homes from Tim Brown and Brown and Co.

Tim found my mom and dad a home 25 years ago and they still live there and love it and enjoyed Tim Brown tremendously!!!

Then my husband and I sold our home through Brown & Co. and bought a new home with Tim and his associates--we were very happy. He told us what he thought our place would sell for and he was right on the dime. Then he found us a new home in Glen Park which we now enjoy. He even gave us contractors' numbers for floors, electrical, and painters. He told us where to buy carpets and appliances. He really went out of his way to help us.

Our two girls could not afford a condo in San Francisco so Tim suggested TIC's. He and his associates educated us on how they worked. He even helped us with the loans that were fractionalized. Tim took the time to explain it to each of our daughters.

They were shown several places before they purchased each one of their own TIC'S. Brown and Co. treated them very fairly and spent quite a bit of time with them. They finally helped my girls' purchase and they are so, so happy. Tim (if you read this) you know who we are and we want to thank you and your staff again for all the personalized service you gave our family and to us.

We also want to say for the record that we have referred many other family members, work associates and neighbors to Brown & Co. and everyone has thanked us as they were extremely pleased with the honesty and hard work they put into helping their clients.

After reading some of these sad, untrue statements about Tim Brown and Brown & Co. I felt compelled to let you all know how happy we all are with their services.

GO BROWN & CO. Your true fans

Posted by: BROWN & CO. FAN at February 26, 2009 7:19 PM

someone hand me a hanky

Posted by: timmmmmy at February 26, 2009 8:51 PM

"The advertising that got everyone to show up left a lot to be desired (I'll leave the legality of that to the lawyers) but they did disclose the reserve on site."

It was a lot worse that not leaving a lot to be desired. Borrowing from Trip:

"Civil Code § 1812.608. In addition to other requirements and prohibitions of this title, it is a violation of this title for any person to do any of the following:

(c) Place or use any misleading or untruthful advertising or statements or make any substantial misrepresentation in conducting auctioneering business.

(j) Misrepresent the terms, conditions, restrictions, or procedures under which goods will be sold at auction."

Disclosing the reserve on site but not in advertisements or MLS was not enough. Sounds ethically wrong and illegal to me.

Posted by: DanD at February 26, 2009 10:13 PM

It looks like auctions are much more common in NYC. Developers there do not seem to be too afraid of price discovery.

http://www.nytimes.com/2009/02/26/realestate/26condo.html

Posted by: San FronziScheme at February 26, 2009 10:31 PM

Hi everyone, I just want to state for the record that we are a family of THREE GENERATIONS that have purchased homes from President Obama. Because this is a blog and everyone is anonymous, anyone can come on here and say anything, no matter whether it is true or not!!!

Obama found my mom and dad a home 25 years ago and they still live there and love it and enjoyed Obama tremendously!!! They bought it when they were 95, and so they are both 120 years old and we owe their longevity to our beloved realtor Obama.

Then my husband and I sold our home through Obama and bought a new home with Obama and his associates--we were very happy. He was even happier from all the money we gave him coming and going. He told us what the next week's Lotto numbers would be and he was right on the dime. Then he found us a new home in Glen Park which we now enjoy. He even opened up the phone book and randomly selected contractors' numbers for floors, electrical, and painters. He told us where to buy carpets and appliances. He really went out of his way to help us. We are incapable of figuring out where to buy appliances and stuff on our own (we're too stupid) and so that was a BIG HELP.

Our two girls could not afford a condo in San Francisco so Obama suggested TIC's. Obama and his associates (actually, he was too busy so one of his newest flunkees did it, but we're stupid (see above) and can't use the Internet to figure this out on our own) educated us on how they worked. He was sure to tell us only the positive aspects, leaving all the downsides for later - much later. He even helped us with the loans that were fractionalized and got a HUGE kickback from the lender, none of which we ever saw, but all of which we paid for. Obama took the time to explain it to each of our daughters. He must have spent at least 30 minutes!!! Then he made a killing selling us TICS that are now underwater. We couldn't have lost all that money without him!

They were shown several places before they purchased each one of their own TIC'S. Obama and Co. treated them very fairly and spent quite a bit of time with them. But what a coincidence, we ended up buying one of their own TICS so he made even MORE money from us. I'm sure their information was objective, though, yeah, riiiggghhht. They finally helped my girls' purchase and they are so, so happy. Obama (if you read this) you know who we are (because you are writing this yourself) and we want to thank you and your staff again for all the personalized service you gave our family and to us. I know all the money you made had nothing to do with this!

We also want to say for the record that we have referred many other family members, work associates and neighbors to Obama & Co. and everyone has thanked us and named their children after us (two of which were renamed as adults!) as they were extremely pleased with the honesty and hard work they put into helping their clients.

After reading some of these sad, untrue statements about Obama (all of which were factual, but that's beside the point) I felt compelled to let you all know how happy we all are with their services.

GO OBAMA. Your true fans - mostly the people who work for you and make money from you!

Posted by: tipster at February 26, 2009 10:39 PM

tipster's piece was hilarious! i found the original post suspicious also; very generic sounding and throwing out the realtor and company name every other sentence.

Posted by: condoshopper at February 27, 2009 10:04 AM

I loved tipster's piece. It captures the current Bay Area zeitgeist IMO.

Posted by: LMRiM at February 27, 2009 10:20 AM

The funny thing is that B&Co aren't even really being all that scorned here. So the defensive post is totally unwarranted. It doesn't change the fact that this situation is despicable and we all know what happens if you are associated with unsavory types.

Posted by: eddy at February 27, 2009 12:22 PM

Hey renters; why don't one of you sue the auctioneer? You obviously been financially damaged as a result of his scam.

Better yet renters; report him to the d.r.e. for false advertising that caused you to go to the auction to bid.

Posted by: Jimmy at February 28, 2009 12:19 PM

"The funny thing is that B&Co aren't even really being all that scorned here."

Must have missed this:

"tim brown and his cohorts esler and conomous
profited hugely off the "only in SF" tic market.
They have 2 other unsalable 8 unit tic projects
on cole street and anza street. Brown and Co.
is nearing extinction."

and this:

"As for Brown-Co. Do you think they care what TIC's sell for? Just so long as they are the Listing agents. Sellers will eventually get with the program and sell at FMV, and when they do, Brown-Co will be making a killing as usual."

and this:

"then maybe fewer building owners will want to go TIC and Brown & Co will suffer. But like any smart business, they will adapt. They can just convert to another speciality, or to regular transactions.... like listing all those underwater owners they have sold to over the years as Short Sale and REO specialists :)"

and this:

"You may find that Brown & Co. represented the sellers of many of these TIC buildings when they were buying those buildings. (i.e. commission both in and out of the flip). You may also see some equity/partnership in some cases cleverly disguised. You may also see some relationships with appraisers & banks that are less than arms length."

and this:

"just checking back. anyone know how much the group loan is (if there is one)? and how much cash down is needed for this share of the TIC? the broker never called me back and i didn't puruse it since i wasn't seriously interested. not sure it they had too many people interested or just didn't want to answer the tough questions. forget Tim Brown, what's Andy Sirkin gonna do next?"

and this:

"tim has his own projects (usually larger condo bldg's.) they are actually one of the better RE agencies in town, as they're on top of their game, and well respected in the RE community"

well respected in the RE community?

Not after this auction fiasco (scam??)."

and this:

"Whether Brown was involved in anyway or not will always remain unknown but anyone associated with this property in the past or future will be tarnished. The next agent who takes over better be good at polishing turds."

Scorned, not in the least.

Posted by: David Esler at March 3, 2009 8:40 AM

Wow, did you bother to read half of those comments as you reposted them? Seriously if you consider these statements to be "scorn" you really need to reset your scorn detector as it seems to be detecting snark as scorn.

Posted by: Rillion at March 3, 2009 10:01 AM

It's hard to maintain a sense of perspective and not take your own life and livelihood personally.

Posted by: diemos at March 3, 2009 10:13 AM

Reading half of a civil code is a dangerous thing. We read the whole code and are in full compliance with all of the laws. There was not one thing illegal or unethical about our auctions. I will say this about the Filmore st. Auction, I was shown a flyer of the property listed at 599K and was not informed that it had failed to sell for $549K or we would never have agreed to a reserve of $549K. We only discovered just before the auction that this was the case and we decided to give it our best shot anyway. Furthermore the auction rules clearly state that there is a reserve price which if not met the seller is not obligated to sell. Your slanderous statements about the legality of what we did are groundless and blatantly untrue. As far as our Montery Deal in Berkeley, that is now sold thank you very much and as far as Anson Way a second auction has netted us a new buyer after the previous buyer and two back ups backed out. Furthermore, there are acusations, groundless again, by angry agents that can't figure out how to make a living in this market, about our heavy use of Craigslist and advertising other peoples listings. Yes we did it and yes many agents reported it and yes after review by the board we were allowed to continue the practice because we know how to do it legally. Yes legally. If you want to know how to do it we are hiring and as a trainee here you can learn how to do it too. Its tough to make a living these days but while re-max and Century 21 down the street from us have closed their doors we are growing so check out our website if you want to see how to make money in this market. Sure not every place sells but what we sell is sold in 1 week with a 30 day close and multiple offers. Many of our agents are able to pick up 1-3 auction listings per week. I know its a scary time but perhaps if those of you who spend all this time slandering our company got to work or came to work for us you might not be so bitter and have so much time on your hands to hate the winners. Our team is growing and we had our best month ever in April.
10 deals closed!
Bodhi Kroll
StatewideRealEstateAuctions.com

Posted by: Bodhi Kroll at May 12, 2009 5:55 PM

Contingent 6 days after dropping price to $499K.
Coincidence?

http://www.redfin.com/CA/San-Francisco/3731-Fillmore-St-94123/unit-2/home/17303606

Posted by: chuckie at May 19, 2009 8:03 AM

#4 @ 499k by Vanguard for sale.

Posted by: eddy at November 27, 2009 7:16 PM

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