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I just saw a commercial on TV for this company
The have SUPER CHEAP starting bids — it will be interesting to go to one of the auctions to see what things actually sell for.
I think we’ll see a lot more RE Auctions in 08 and 09
I have been to a couple of these auctions in the Sacramento and LA areas
recently.They are interesting as they usually take place at a large convention center and use large screens to display the houses as they are auctioned.
They start the bids low, usually 30 to 50% of the so called “former market price”.
It goes fast and the prices tend to bid up to about what I would pay if I really needed to buy a house. Not really a great deal.Here is the rub. You have to put up a $5,000.00 cashiers check immediately and the difference of 5% of the winning bid in the form of a regular check.
Many properties are re-auctioned a few minutes later as people who bid do not seem to understand this.
There is a 5% buyers fee.
You must close within a set time. Usually 30-45 days. If you are not pre-approved by their lender and you cannot close you may loose your 5% deposit.If you win the bid, you may not really get to buy the property as the lender reserves the right to refuse the high bid in many of the sales. They may give themselves 7 days or more to review the high bid and accept or reject it.
I talked to a realtor in Sacramento after a recent auction and was told that a very high percentage of the bids were rejected and the properties were to be resold at the next sale. Not too encouraging!
However some of the best deals are on the properties that get no bids. You can contact the lenders after the sale and deal directly.
I did not think that these auctions were very worthwhile. However, the lenders may get a little more realistic in future sales?
It is probably worthwile to keep an eye on these sales just in case they get better.
I know an investor in Bakersfield who bought 2 house at one of these auctions and sold them a month later for a $60,000 profit – EACH!
So, there are SOME really good deals but you need to do your own homework. Don’t trust their “market value” estimates.
Jackie Lange
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