At What Point Will It Be Worth Looking At An Auction?
Readers suggested a topic on auctions. “How about discussing at what point will it be truly worth looking at an auction to get a deal. Most of the auctions now have high starting bids or low starts with high reserves. Also, there are people who think now is the time to jump in so they end paying only 10% less than what these places listed for originally.”
One replied, “But when you factor in the 10% commission you are back to where you started price-wise. You also forgot to mention the auctioneer’s bidding to rig the price higher, and the bidding shills who pose as genuine bidders.”
One looks at bank owned properties. “When will the lenders get serious about selling their ever-growing collection of REO’s. In my neck of the woods, Southwest FL, they’re no better than the most clueless civilian sellers with their ‘wishing’ prices.”
A reply from fellow Floridian. “Port Charlotte is having the first REO auction I have seen advertised next Sat., the 30th. 28 houses/approx 20 lots and a single batch of approx 10 lots.”
“I have a friend at work and his wife is pulling all available info about the properties. I have no desire to purchase yet but I will attend just to see if I can spot any shill bidders. I also want to get a feel for what the public thinks these places are worth. I personally dont see auctions doing good for at least six more months.”
“The guy whose wife is getting the property info owns 17 rentals in North Port. I posted a couple of weeks ago he just bought three more brand new places from a specuvestor from up north. The guy needed out asap. He picked up all three properties for 100k each. He got renters in all three this week but he now figures he overpaid by about 25-35k per property. He will do o.k. because the properties are paid for but it still bothers him a little.”
“We are at the very beginning of this whole debacle.”
One said, “I just moved from FL and it seems to me many don’t understand the reality of what their house is worth in the marketplace versus what they think it worth. I think that some of these auctions will give us a true idea of what the market place is really at.”
“People can’t let go from the ‘what my house was worth 2 years ago’ issue Like I told a friend, ‘you already equity lined out what your house was worth and you still think you deserve more?’”
One was skeptical, “I am down in Lee County. Most of the auctions I have attended or watched online have been a huge waste of time with reserves or shills or seller has the right to accept or refuse the high bid, etc.”
“I think these phony ‘auctions’ are ultimately going to hurt when the need for a real auction arises and no bidders show up.”
Another suggested, “You ought to make a T-Shirt that reads, ‘Reserve Auctions are Fraudulent.’”
One reported, “I am attending the event in Sacramento this weekend. The on-line rules allow the auctioneer to bid against me, up to the seller’s undisclosed reserve price. This is clearly a Shill Auction and the opening bid prices are truly meaningless false advertising. I will report back here on Sunday. Are any other bubble bloggers going in for some Saturday morning entertainment at the Cal Expo Fairgrounds?”
From News 10. “More than 240 homes repossessed by the lenders in the Central Valley and Bay Area will be sold in a three-day auction beginning Saturday in Sacramento.”
“At first glance, the foreclosure auction appears to be a bargain hunter’s dream. In some cases, the opening bid starts at well under half the price of the property’s recent market value.”
“For example, the starting bid for a one-year-old home at 10216 Shoech Way in Elk Grove is $279,000. Property records show the house sold new last year for $620,000.”
“Foreclosure specialist Alexis McGee says…the buyer must be careful. The excitement and competition at the event can drive the price beyond the fair market value, she said.”
“‘Create a maximum bid sheet for every property,’ McGee advises. ‘Walk when it goes over your top price. Do not get personally connected to any house. There is no reason to get caught up in a bidding frenzy.’”
“Buyers need a $5,000 cashier’s check to register, and properties can be financed with as little as 5 percent down. But some of the homes in poorer condition require a 30 percent down payment.”
never buy from an auction, unless it is a 75% cut.
that is how much a cut florida needs to get to for real values of properties.
The above story about the man in Northport is indicative of the problem. He’s bought three properties for 100k each, rented all three, and now figures he overpaid by 30k each. Rent multipliers are the only objective way to price properties at this point. So forget paying 600k for a house that won’t catch a rental bid at $1200/mo. because appreciation at this stage is a dead issue.
RJ,
It was one of the guys i work with who bought the three houses. After talking with him this week he hadn’t realized at the time how much rents had retreated in North Port. His other homes were all stable/long term renters without much turnover. His goal is 10% ROI,i think with these he told me he will end up around 5-6 %. My opinion after running my parents rentals for the last 2.5 years…I ain’t buying into the game until i see 15% ROI. If you cant make 15% why deal with renters ??
I will let all the FB’s negative cash flow while i keep saving…
Chris
How to spot the requisite shills @ an auction?
Stand up towards the front, off to one side or another…
As the auction is going on, face backwards towards the audience, the same perspective the auctioneer has.
Look for the same person or persons bidding on virtually every house up for bid.
Also look for Phantom Bids…
What’s a “Phantom Bid”?”
A phantom bid is the auctioneer taking a bid from a non existant bidder, in the audience.
You’ve got to be very perceptive and have a wide field of vision to catch the shills and phantom bids. An auctioneer will have assistants working the crowd. They’ll go to a hot bidder and call phantom bids from behind the hot bidder.
When I buy at auctions and see this happening I’ll turn around to see if anyone is really bidding. This usually makes the assistant back off. Whatever you do, don’t act or look excited. These guys get paid to smell and exploit weakness.
I remember when things were really bad in the early 90’s in California and I was looking at some higher end resales which had views from the hills in Orange County all the way to the ocean, absolutely georgious views.
11 out of 12 homes were for sale and most were abandoned and owned by banks and many had vandals breaking into them to steal what they could. None of these homes were selling for less than half a million dollars which at that time was a lot of money considering California was basically in a depression as a result of a national recession coupled with extreme cutbacks in aerospace which had a double wammy effect and severely impacted California.
Didn’t mean to ramble there, my point is that real estate only goes down so far and finds a floor and stops retreating in price regardless of conditions.
It is my humble opinion and seems to be the opinion of many who frequent this board that real estate has much further to fall in price and much more desperation has to set in before that “final floor” is in place. I simply know from experience we have a lot further to go on the downside. Everybody please fasten your seatbelts this ride could get a little bumpy
Meant to say 11 out of 12 homes were for sale on the street I was looking at, forgot to add that was during the time frame when Orange County declared bankruptcy.
“my point is that real estate only goes down so far and finds a floor and stops retreating in price regardless of conditions.”
Um, I think what you mean to say is that real estate in the California hills with absolutely gorgeous views down to the Pacific Ocean only goes down so far.
But even in the 99% of the country that doesn’t fit that or a similar description I will admit that there is a floor for other abandoned and horrendous condition property as well: zero. Although not quite: you may get a call from the sheriff telling you to move the junked cars because snakes are living in them (or some such), or else he’ll send you a bill.
I specified that these were higher end resales, so just because they were abandoned don’t think the looks of the homes was bad. These were just homes that were built during the tale end of the 80’s boom and were now for sale or abandoned, but the exterior look of the homes overall was very good.
There was a break in on a few of them by thieves to try and steal anything easily attainable that was of value. For the record they did not seem like sophisticated thieves that knew what was/was not valuable
For the record the property decline in all of California hit bottom at that time if my memory serves me correctly. Some of the nation was already recovering from the recession, California continued to struggle because of various mitigating factors including the aerospace layoffs previously mentioned.
I’m sure you weren’t sniping at me as that discourages posters from wanting to share information
FW - definitely not sniping at you - opinions are like little punches and counter-opinions are like little counter-punches - but I try to keep the gloves on until someone else takes his off.
I do think sometimes people fail to appreciate that most real estate has no inherent value - even the land. Think Detroit, the Mississippi Delta, small towns throughout the Midwest and Great Plains, etc. Not only do the houses depreciate to nothing but even the land underneath as well. So for the overwhelming majority of the country the bottom truly is zero.
The talk of most RE having no inherent value surely touches on the most darkest of themes… For people to even attempt to wrap their minds around that concept we’ll have to really hit the bottom.
The magical “view of the ocean” in SoCal is extremely stabilizing. I laugh though when one talks about views of Catalina from Yorba Linda!
perhaps value is a matter of opinion.
i spoke to a ‘loan consultant’ (at WaMu) who said she will not lend money on a house with broken windows.. i guess they have no inherent value to her.
I’m Going to the San Mateo CA Auction (88 homes) tomorrow. There is one property i’m going to bid on. The Sacramento Auction is on right now, I’d appreciate any comments/observations from that one.
Can’t wait to hear back on the Sac auction. Did you have to reg to get in the door? At one auction in Feb, you had to have a GFE in hand and cashier’s check before they’d let you in the front door.
Does anyone have info on auctions in the Denver area? I have tried to find any info online just to give it a look and see how the market is doing but not much info out there on the ol’web. If anyone knows of a good place to start looking I will be happy to come back and keep everyone updated on what I see.
Don’t even think about touching auctions. These are totally rigged. Wait a year and then go directly to the banks. There will be deals. But not now, and definitely not at auctions.
You have no chance with these sharks.
I agree. Patience is needed now. You will get lots of good deals in the future. Auction is not needed. Wait until there is real stress. This will be when the banks need cash. Stay tuned…
I don’t know if I’d ever buy at an auction, I’m not sure I’d be comfortable with it. I’d rather look at a bank’s reo and see what I could negotiate.
I think you can look for a “deal” at any point in this whole mess, never hurts to look. I search the reos and discounted properties, etc. If I find something that meets my requirements, I’ll make an offer. Also, there were RE investors (as opposed to flippers) long before the bubble. You never know, they might be willing to dump some of their less desirable single family properties out of their portfolio. The ones who are good business people already see the writing on the wall and in some cases probably wouldn’t mind cutting their losses. So you could probably do much better approaching them privately. Right now, these investors don’t really want to show public weakness and the auctions are rigged not to show public weakness.
palmetto,
I have zero plans on purchasing next sat,i just want to see what kind of demand is out in the public here in Florida. I have a few foreclosures on my street i wouldn’t mind turning into rentals. Problem is its hard to even get a good grip right now what rents are bringing on SFR because the market is soooooo distorted from the morons who are renting with negative cash flows.
My parents are gettin the itch to buy more rentals so i also have to keep em kinda at bay with good info on where prices currently are….I have a pretty good feeling its going to be a long,hot summer…
Chris
I agree, Chris. You and your family sound like you know what you are doing, but you have to take into consideration what’s happening in your area. Will the population even be there to rent?
By the way, I agree with your 15% ROI, it really isn’t worth dealing with renters otherwise.
By the way, I agree with your 15% ROI, it really isn’t worth dealing with renters otherwise.
As do I. Here in Manhattan, Hermosa, Redondo beaches, this will require at least a 50 % drop. Really out-of-whack here.
Right on - 10-12% used to be considered a minimum, with 15-20% a goal, and anybody who can keep near 100% occupancy and rents getting paid deserves at least 10% over the risk-free rate, whether that’s 15% (today) or 20-25% in a high-interest rate environment.
I had my one (bad) experience with a 4-unit apartment and quickly realized that this was a game for people with a lot more patience and longer time horizons than I have. Took a small loss and got out. That’s when I realized the only way to make money for me in RE was in SFH: live in ‘em, fix ‘em up, and then sell ‘em. Of course now that game is long over, too, not to return for many, many years.
” There is no reason to get caught up in a bidding frenzy”. This foreclosure expert McGee has absolutely no chance of becoming a spokesperson for the NAR with that kind of attitude.
Put in your bid on the unsold lots after the auction is over. You will be surprised at how motivated the sellers can be. Also remember that you will then be dealing with a dejected and deflated seller who has not been able to get his wishing price. Go for the jugular and good luck.
This is good advice, just like buying something expensive on eBay like a car, boat, or expensive bicycle. It also gives you the important advantage of becoming the initiator of the negotiation, allowing you to throw in a condition or two, thus forcing the seller to agree to your terms, rather than the other way around as at an auction.
“what point will it be truly worth looking at an auction to get a deal”
When the Feds *force* banks to liquidate their ever increasing inventory of REOs (foreclosed houses, aka “Real Estate Owned”). Right now, most houses that go up for foreclosure auction have too much “owed” on them, and therefore the initial bid is at or above ‘market value’ (and an inflated one at that).
Then the house goes back to the bank as an REO, and the banks list it with a broker, and hope to sell it at near market price. During the meanwhile, they keep the houses listed on their books at “book” value, meaning that on paper they haven’t taken a hit financially.
When these pile up, the Feds will (should?) force them to get these non-performing ‘assets’ off their books, and fast…along with other banks. *That* should finally force them to make some deals. But until then, by “not just giving them away”, they get to keep the illusion that they haven’t lost as much as they really have.
(Someone correct me if I’m wrong on this)
sounds about right to me. As Bear Sterns taught us this week, there are a lot of naked emporers out there consciously avoiding mirrors.
“there are a lot of naked emperors out there consciously avoiding mirrors”
Could this be because they are rather embarrassed to see that their big swinging elephant trunk has shrivelled to pint sized proportions? The horror. The sheer horror!
The trunk never existed — it was just a stump leveraged 20 times.
“When the Feds *force* banks to liquidate their ever increasing inventory of REOs”
I absolutely agree. One metric I watch is Countrywide REO listings in my area. Earlier this year there where 8-9 listed, now it’s up to 27. Until the lender/bagholders start realizing these losses we really haven’t seen a correction, and I won’t be a buyer.
Right on the money! I see a lot of empty for sale properties in the IE (soutern Calif). Some have been on the market for a year or two and are bank owned. But when I’ve looked at the price they are asking, it is still outrages! Near 400K for old, decaying houses. Banks will have to have taken big losses, causing prices to come down 200K or so before I consider buying.
Bank regulators don’t force or cajole institutions into selling REO. They do (or should) insist that the asset be kept on the books at fair market value. Typically, this is 20 to 25% below the unpaid principal balance. Independent auditors are supposed to take the same position, but they are hired and paid by the banks. Generally, the auditors take the weasel position that “in the opinion of management the REO balances represent fair market value.”
Bankers get nervous and start to dump their REO only when they have a lot of them so that these non-earning (actually costing) assets start to affect the bottom line. This becomes a function of interest rates. If a bank’s cost-of-money is low, say 2-3%, it will sit on REO and wait for a good price. As the cost-of-money rises, which may be the current situation, there is more of an impetus to dump. If an REO costs 3% a year to maintain (security, maintenance, taxes), and the cost of money is 5%, then the REO costs the bank 8% a year.
are we talkin about FDIC insured institutions.. where, as I understand it, an insured bank must maintain some minimum of debt to asset ratio (or wharever it is) to remain insured by the feds..
anyway, i wanted to mention that right now i can’t even get a bank to tell me who the heck is handling their REOs .. I think they are nowhere near being in the right mood to deal seriously.. at the moment.
Auctions typically fill a need in some fashion…
Here’s the different types you’d see in Los Angeles:
Public Administrator- If you die w/o heirs, your stuff gets auctioned off here.
Used Car- Cars that are either not so hot, nothing you’d want to sell to your customers(i.e. consignments from other car dealers), or county-school district-electric co-etc fleet cars that are a bit tired.
Antiques-Art-Furniture-Bric a Brac- These auctions typically get the b or c grade gear, as if somebody took the stuff to Southebys and they directed them to a local auctioneer. Sometimes these auctions have amazing stuff, rarely though.
U.S. Customs- A mish-mash of this, that and whatever, typically stuff that tried to squeak through w/o paying duty, although the auctions can have a variety of other items usually jewelry, rolexes, precious metals, etc., care of confications by the dea and irs, et al.
General Purpose Auction- An auction that sells low to medium end gear, usually the items are from a business or personal bankruptcy.
Rugs, Jewelry & Artwork- Typically these auctions blare out: “FROM U.S. Customs Auction” in the newspaper adverts. If you read just a little into the ad, it will say something, in very small letters “includes items bought from U.S. Customs Auction” So if the auctioneer bought a couple of items for a few hundred Dollars from a legit U.S. Customs auction, he’s in the clear with his grifty auction and wording. Avoid this one like the plague.
And of course…
The latest housing auctions, I daresay 98% of which, are merely reserved auctions, where i’d guess, based upon iffy results so far…
Whomever is consigning these houses, is paying the auctioneers a pretty penny to put these auctions on.
My take is DON’T go to auctions on WEEKENDS they want lots of joe six packs But find one on Tuesday at 11AM…. You probably will have only the pros show up there. Why do you think lots of Auto auctions start at 7AM????
Bidding is like Ebay you have to know what the REAL PRICE IS, if i would pay $50 for something and the bid is $9.99 with a few minutes left in the auction… i would put a bid in up to maybe $20-25 just to see if i can scarf it up cheaply…
But You would be amazed at how many times i have seen This happen and the final bid is like $42 +$15 postage…. More then i would have paid to get it brand new!
And why pay an auction house 10% buyers premium? i think that is a big rip off….
“You probably will have only the pros show up there”
I dunno if I, an amateur, would want to be the “winner” at an auction populated by pros.
I would because the PROS won’t over bid..
just remember if they outbid you…. you don’t have to bid again……and they “win”
True. The pros won’t overbid.
On the otherhand, they are unlikely to underbid, and leave a profitable bargain sitting on the auction block.. and allow me take it.
Come to think of it, with all the research they do and technical expertise they have, maybe what a pro pays for a property at auction should be a benchmark for what a property is actually worth at that time..
If this is the case, I wouldn’t want to outbid them.
Hey NYC boy..et all…Tomorrow the Big Hoboken Codo auction…will any sell?
Condo Auction a ‘Test Case’ for Demand ; Developer Seeks to Move a Lot of Units Quickly
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Source: Record, The; Bergen County, N.J.
Publication date: June 17, 2007
By KATHLEEN LYNN, STAFF WRITER
A Hoboken developer, Remi Cos., plans to jump-start sales of its new condo development with a public auction next Sunday.
The auction is occurring against a backdrop of lower demand and lower prices for condos nationwide. But Remi Chief Executive Officer Erik A. Kaiser says Hoboken has not been affected by the downturn, and that he is confident of buyer interest.
The auction, he says, is a way to move a lot of units quickly at the two-building, 128-unit Velocity project, after construction delays slowed earlier marketing efforts.
“We can sell the units quickly, and people can get a discount,” he said.
For every month that Remi takes to sell the condos, it is paying interest to the lenders who financed the project, he pointed out.
“Time is money,” Kaiser said. “We’re over time on this development. The auction is a way for us to start to get the development moving out of our pipeline.”
The company will auction 40 units at the condo development at 600 Jackson St., between Sixth and Seventh avenues. About 30 units already have been sold.
Auctions are not often used to sell real estate, though developers and other owners sometimes turn to them in troubled markets. James Hughes, a Rutgers economist who has studied the state’s housing market, said the results of the Velocity auction will be an important indicator.
“It’s a good test case,” he said. “If they are able to auction all the units off at reasonable prices, maybe there’s demand there at specific prices. But if it falls on its face, we’re in real trouble … and we may have an oversupply of units.”
The project, consisting of two buildings flanking a 25,000- square-foot courtyard, is in the less developed and formerly industrial western part of Hoboken. It’s built on what Kaiser describes as a former junkyard, which cost about $2 million to clean up. And it’s next to a public housing project, which is off-putting to some potential buyers.
But it’s also about a block from the NJ Transit Hudson-Bergen Light Rail stop, which brings residents to the Hoboken PATH station and Exchange Place in Jersey City. The opening of the light rail through the neighborhood has stimulated developer interest. Nearby developments include the 113-unit Metrostop condo project, expected to be completed in June 2008, and the Monroe Center, a mixed-use complex that is set to include 435 condos.
“This whole area is under redevelopment,” Kaiser said.
As for the public housing project, Kaiser said it has posed no problems at all, and that Velocity, like all of Remi’s urban projects, has extensive security, including video cameras and a 24- hour concierge.
The minimum bids in the auction start at $295,000 for a 790- square-foot one-bedroom unit. That previously had an asking price of $450,000. A three-bedroom, three-bath, 1,549-square-foot condo has a minimum bid of $545,000, compared with an earlier asking price of $865,000. Monthly condo fees range from $347 to $680.
“An auction is really letting consumers set the price,” Kaiser said. “The market is going to pay what the market is going to pay. … We know there are going to be bargains and deals. Why not create a new way to let the consumer tell you now what the price is going to be, rather than wait six months?”
The Velocity has a brick facade and 12-inch concrete floors, which helps soundproof the condos. The complex also offers a fitness center, and the units include washers and dryers, marble bathrooms and stainless-steel kitchen appliances. The floor plans are open, with the kitchen facing into the living room over a black granite countertop. Some units also have walk-in closets.
The auction will take at the Hyatt Regency, 2 Exchange Place in Jersey City at 1 p.m. next Sunday.
Remi specializes in redevelopment of brownfields and other urban sites - a hot area now in New Jersey, as state planners encourage urban redevelopment as a way to prevent building in environmentally sensitive regions, such as the Highlands.
Aside from Velocity, Remi is also involved in redevelopment of the Yonkers, N.Y., waterfront. The company, Kaiser said, pursues properties where “other people would turn away.”
***
E-mail: lynn@northjersey.com
(SIDEBAR, page R03)
If you want to bid
The condos are open for inspection at 600 Jackson St., Hoboken
The auction will be held at 1 p.m. next Sunday at the Hyatt Regency, 2 Exchange Place, Jersey City.
Bidders must register before the auction and present a cashier’s check or money order in the amount of $10,000, as part of the required 10 percent deposit.
For more information: 201-963-9010 or velocityhoboken.com
(c) 2007 Record, The; Bergen County, N.J.. Provided by ProQuest Information and Learning. All rights Reserved.
http://www.multifamilyexecutive.com/industry-news.asp?sectionID=565&articleID=522546
“Hey NYC boy..et all…Tomorrow the Big Hoboken Codo auction…will any sell?”
No!
Good topic.
I don’t know beans about real estate, but I’ve been thinking lately that eventually this excess inventory is going to have to be moved at a deep discount below replacement cost.
So I think I would use the cost to build the same house as the benchmark for the auction price, and expect the houses at auction to be going for at least 10% below that, (since the seller has holding costs).
This is a purely uneducated guess, so I’d be really interested in hearing whether or not the more knowledgeable readers of this blog think this replacement-cost-benchmark idea makes any sense.
Auction:
Noun
Etymology: Latin augere ‘to increase’.
1) A very old and popular carnival midway attraction wherein the marks throw money at a target as it moves farther and farther away.
We’re nowhere near “auction” time. Auctions now have minimum bids that cannot be breached. “Auction” for now, is a marketing term that any fool is supposed interpret as a bargain.
True auctions are when the banks are strapped for cash with too many homes on the books and no cash coming in from them. That’s when they’ll be considering bids below minimum bid and handing over the keys for anyone willing to pay the $2000 deposit and promise to pay something, anything every month.
It’s the way it was last cycle and will be even worse this time. But at the same time, you won’t be able to get people to bid, even at rediculas prices, not even at gunpoint.
1996 all over again.
‘It was one of the guys i work with who bought the three houses. After talking with him this week he hadn’t realized at the time how much rents had retreated in North Port. His other homes were all stable/long term renters without much turnover. His goal is 10% ROI,i think with these he told me he will end up around 5-6 %.’
At $100k with the rent probably $850 now to get them filled it is still too high unles he bought some larger 1600sf+ homes.. I think the starter 1200 sf new homes in North Port bottom around $75-80k which is where they were in 2002.. Lots now around $15k dropped from near $50k still another 65% or more haircut.. There is just way too much supply of emtpy new homes that will take years to absorb.. Amazing that there is still some new construction breaking ground even now..
All this talk of Auctions, I thought I’d chime in. I’ve been in the Auction Business for 20 Years Previous. Not much Real Estate but I’ve sold about everything under the Sun and been to or Held Thousands of Auctions.
The thing that Amazes me most is Most people still haven’t a Clue about how most Auctions really work. I’m thinking of writing a Book on the Subject, because there’s a lot to write about. Anyway one thing that always Amazed Me is the “Pros” that bid the Retail Buyers into the Dust.
Truth is most People in Business , have very little of a Clue what Stuff is actually worth. A lot of it is a Pride thing. They feel that no matter what price they Pay , someone will Pay them More, eventually and usually they are Right , except most don’t truly figure “holding costs ” and by the time they sell they really made peanuts.
I know one ” Business an who’s been in it 30 Years and he Used to go to an Antique Auction and Buy everything there no matter what the price till he filled his Semi. He played the Numbers game. He figured some things He would lose Money on, But in the end He would come out, Especially after he bought enough , people would think He was Rich and Crazy and People would just Figure there was ” No point in trying to outbid Him , so they gave up and Nobody bid against him. Bargains.
Auctions are a complicated World. Not for Amateurs on Big Ticket Items.
“Another suggested, “You ought to make a T-Shirt that reads, ‘Reserve Auctions are Fraudulent.’”
I would like to see a T-shirt that says, It’s The Price Stupid.
News story about Sacramento Auction held today:
http://www.news10.net/display_story.aspx?storyid=29527
“I haven’t heard of that many steals here,” said Andy Adams, who drove to the auction from South Lake Tahoe.
But there were some bargains to be found. Pat and Satya Chaterjee won their bidding war for a Roseville home, paying about $15,000 under market value.
—————————-
I’d like to know how they determined “market value”. The home I’m interested in (tomorrow’s auction) appraised 3 months ago for $497K but the auction catalog says it’s value is $625K. Zillow says $616K. And I wonder if they consider the 5% auction fee too? In my case, almost $25K…
SacBee news story on the Auction:
http://www.sacbee.com/101/story/238410.html
Winners, many of them real estate investors throughout Northern California, said they were happy with their bargains.
“I was going for $275,000 and I ended up bidding $300,000,” said Bill Weldon, who bought a 1,770 square-foot foreclosed home in Galt. “I figure instead of saving $100,000 I saved $75,000. It’s still a good deal.”
—————–
The house he speaks of lists for $373K on zillow. Auction assigned no value to it. unknown if $300K includes 5% auction fee.
That link didn’t work for me. This did.
http://www.sacbee.com/101/story/238605.html
“The event lender, Irvine-based Impac Lending Group, offered four types of loans: 30-year fixed, interest-only, five-year fixed and stated income.”
Channel 10 (or 13?) also covered it on the late news.. lots of smiles tonight.