Can You Buy Off Other Bidders Legally?
Okay,
I heard a story in a RE course of the instructor offering $5K to the sinlge other bidder at the courthouse before the auction started to not bid on the property.
I haven't tried this, but today another investor told me this was illegal - price fixing. Can we provide some feedback on this please? Is this or isn't this illegal?
Thanks,
Robert
[addsig]
collusion is illegal. however partnerships are not illegal.
Quote:
On 2004-05-28 18:08, lp1 wrote:
collusion is illegal. however partnerships are not illegal.
I guess in theory, it could be possible to walk into the auction with partnership papers ready to be signed, and create a parternship 5 minutes before the auction starts with whoever is interested in getting a piece of the property at the minimum bid.
I wonder if anybody every tried that in practice ?
[addsig]
As well the sale can be set aside for chilling of the bid.
Not something I would try. But the others have a point, partnerships are not illegal. It is also not illegal to make the deal before anyone owns the property. In other words, if you suggests to another bidder that you will buy the property from them for $5,000 over their bid, as long as you do not suggest a bid to them, that should not be price fixing and you can make their bid work for you, however, my disclaimer should be entered at this point: I am not sure if this strategy is totally liegal, or if it would work well.
But, if they bid more than you are willing to pay, you may want to back out of the deal, and that will probably make them angry and not want to do business qith you in the future, but this is just a suggestion and is primarily speculation. Talk to a Real Estate Attorney first on this one.
Well then, I guess I learned this *before* I tried it. I never thought about it being illegal, just a good business move. I kept wondering today at the courthouse why no one had tried that rather than escalate the price up to more than the property was worth.
Robert
[addsig]
What would be illegal w/ me making an areement (perhaps off the courtroom steps) that any property you buy, that I like, you'll flip it to me for a $5000 fee"
cjmazur,
The initial story I heard was the investor was trying to keep the bid down, so he paid off the other investor to leave.
Robert
[addsig]
my bad.
Good question!.