Checked Out A Foreclosure Auction
Beforehand I checked out the properties to get a general gist of what's on the auction block. The auction I went to was for November 2009. Pretty much everything looked like crap to me, I'm not sure why anyone would want some of these properties, and many of them went unsold (aka "Struck Off"). Most of the listings with pictures looked like 100 year old shacks that might collapse at any moment....a far cry from the palaces going for $1,000 you see on TV. Many of the listings were just for plots of land, some of these plots sold for WAY over the minimum auction price, which probably means certain people know that area well and came prepared.
Keep in mind if you buy a listing, it almost always has some "back taxes" the former owner couldn't pay, so you take on those debts.
As I arrived I saw a crowd of about 80 or 100 people from all walks of life crowded around a police officer and some office workers on an elevated area of the steps:
The man doing the auctioning was dressed like a state trooper, and was rather soft spoken, and was a little difficult to hear if you weren't paying attention. One guy involved in a bid war kept looking down at his notes, and actually won the listing and didn't know because he couldn't hear! HA!
The whole thing was maybe 20 minutes long and was actually pretty....fun! It was comical watching people bid against each other and rather entertaining for the crowd. There was a woman at the front and a man in the back who obviously knew each other from these auctions who kept bidding against each other on almost every listing.
The crowd was very entertained watching them outbid each other to 2X, 3X, 4X and even 5X the minimum property value! Everyone was thinking "If these two just came on different days they could've saved $100,000 at this auction alone!"
I spoke with some people who come frequently, and sometimes there are great bargains to be picked up, but on a crowded day like today it's difficult to buy popular listings for cheap. You also have to register to bid, which means you have to prove you have a certain amount of cash ready to plunk down....this keeps out much of the general public.
I'm sure a slowing economy will start adding some even greater bargains to these auctions.
A good experience!
posted by Neville @ 3:03 PM
8 comments
8 Comments:
Could you give an idea of the sorts of prices these places got? They look like they should be condemned.
You're unlikely to find a mansion for pennies on the dollar. If it's a bank foreclosure, the bank needs to only cover the balance of the note. But, it's common for the bank to become the owner of the property and will sell it as an "REO" seeking a sale closer to market value.
There are definitely some regulars rolling eyes and bidding against each other.
Did you see former Mayor candidate David Butross there? He's a regular and buys properties like I buy breakfast tacos.
I'm frequently asked about foreclosures in downtown. What I saw this year was the private auction market and developer discounts converge to clear out the inventory with a discount of 25-30%. Foreclosures didn't play a role. The number of downtown foreclosures can be counted on one or two hands. I posted an article here if you're interested.
I could not imagine how some homes on these auctions can get big bids.
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