Sunday, April 13th, 2008 at 1:27 PM
Auction Report
The big auction took place yesterday at the Del Mar Fairgrounds.
There was probably close to 1,000 people there overall, and that might be optimistic. Judging from the pictures used and the towns involved, the quality of the real estate being sold was average at best, and it’s hard to say if there were any deals.
There were 217 properties on the list – here are the statistics on 87 of them:
Previously Valued up to: $453,869 average
Opening Bid: $158,988 average
Sales Price: $258,940 (including 5% auction fee)
The average sales price was 57% of the average previous value, which tended to be the previous list price by the REO realtors who tried to sell them first, before sending them to auction.
Here are a few examples of the better-quality properties, the LPs are the beginning and ending list prices by the REO realtors who tried to sell them first, before going to auction, and the 4/08 sales prices include the 5% fee tacked on by the auctioneer:
2564 Navarra #115, Carlsbad
1 br/1 ba, 1,199 sf
$381,000 SP 7/04
$304,900 LP 8/07
$229,500 LP 2/08
$236,500 SP 4/08
The last sale in the complex was $254,900 in December, 2007, for a 1 br/1.5 ba, 1,427 sf model.
YB: 1975 HOA = $270/mo
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8635 Via Mallorca #B, La Jolla
2 br/2 ba 1,231 sf
$530,000 SP 9/04
$498,900 LP 12/07
$489,900 LP 3/08
$399,900 SP 4/08
The last sale in the complex was the same floor plan at $500,000 in November, 2007, though two others have sold on the street since then that were bigger for $470,000 and $480,000.
YB:1996, HOA = $230/mo.
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1637 Wesley, Vista
3 br/2.5 ba, 1,523 sf
$545,000 SP 5/05
$449,900 LP 6/07
$349,900 LP 2/08
$351,750 SP 4/08
The closest sale recently was a 3 br/3 ba 1,535sf house on Promontory Ridge for $432,000 in November, 2007.
YB: 1995, HOA = $65/mo
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1838 Avocado, Oceanside
3 br/2 ba, 2,177 sf
$740,000 SP 3/05
$571,900 LP 12/07
$549,900 LP 3/08
$525,000 SP 4/08
A realtor had bought this in 8/04 for $611,000 and installed a new roof, paint and carpet – and it had a pool on a 8,883 sf lot.
YB: 1973 HOA & MR = 0
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14268 Pebble Beach, Valley Center
4 br/3.5 ba, 3,546 sf
$699,500 SP 3/05
$599,900 LP 8/07
$549,900 LP 2/08
$472,500 SP 4/08
The last comp on the street was a 3,406 sf house that sold for $630,000 in December, 2007. The previous listing mentioned that the bank had approved a short sale for $640,000 in mid-2007, but no takers. Wonder what they think now?
YB: 2005, HOA = $160, MR = $251
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26908 St. Andrews, Valley Center
5 br/4.5 ba, 4,626 sf
$908,000 SP 1/05
$789,900 LP 11/07
$749,900 LP 2/08
$577,500 LP 4/08
Golf course and mountain views – in the last remarks the agent called it, "upper class living".
YB: 2004 HOA = $160, MR = $460
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The two condos at the top were the only properties in La Jolla and Carlsbad that were auctioned, and there were none in Carmel Valley, Del Mar, Encinitas, Rancho Santa Fe, or Solana Beach.
Chula Vista had 31, Escondido had 22, Spring Valley had 15, and Oceanside had 14 properties on the list.
The auctioneer’s 5% fee on the 87 properties was $1,072,750.
Posted on Sunday, April 13th, 2008 at 1:27 PM in Auctions | 13 Comments » | 
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So the REIC is holding around 1 auction per month and they make 1 million per auction. Not bad…
I bet they get a piece of all provided financing (at the show) as well.
If banks would be willing to work with other auctioneers the money could be spread around a little more.
shadash | April 13th, 2008 at 4:51 pmWhen you refer to sales price, are you saying that these properties actually sold as opposed to went to a reserve price which the auctioneer then "sold" the property at without a bid?
I attended the REDC auction in January, and it was apparent to me that most of the properties did not really sell, even though the auctioneer said "sold". I tracked many of them as appearing back on the MLS by the loan servicer a few weeks after the auction.
Kingside | April 13th, 2008 at 5:09 pmHi Jim,
What were the results on this home:
1749 Brighton Hill Court San Marcos, CA 92078
This is a HUGE home – very nice, ugly green carpet, nice pool. I think the starting bid was around $387k.
Brina | April 13th, 2008 at 5:18 pmI have to agree with kingside. The reason attendance is down at these sales is because even though they say sold, many don’t go through. A friend took four clients to an auction, each was successful in bidding for properties, none of the sales were approved by the lien holder. It was a huge waste of time for all of them.
Mattie | April 13th, 2008 at 7:45 pmIs the auction still filled with shills?
Is anybody buying that isn’t getting fleeced? Can anybody give me a reason why any informed buyer would pay previous MLS list price at an auction?
No_Such_Reality | April 13th, 2008 at 10:31 pmI am curious about the San Marcos Property as well what happened?
Also, the prices for such low quality houses is too high. Banks are not willing to take a nice chunk off the table. They are trying the slow bleed method. It will cause more downward pressure an year from now.
NC | April 13th, 2008 at 10:46 pmKingside – the sales prices listed are the winning bid plus the 5%. I’ll be checking after the 30 days to see how many close, because agreed, their reserve pricing will kill many a deal.
I didn’t catch the Brighton Hill sale price.
As far as getting fleeced, the auctioneer ran the initial bids up so quickly I couldn’t follow whether there were actual bidders, or if he was making his own bids, which was permissible in the instructions.
Jim the Realtor | April 14th, 2008 at 12:25 amCorrect me if I’m getting the wrong impression but I see a high pressure sales environment where there is nothing of value granted the bidder.
Rob Dawg | April 14th, 2008 at 1:52 amI don’t think you were the only one with that impression. The ratio was around 10 to 1, non-bidders to bidders.
BTW, there was far more entertainment at the Gun Show next door, where you could walk out with "toy" guns and cases of ammunition. Plus it was so hot in that building that a lady fainted and had to be carried out. It had to be around 90 degrees in Del Mar yesterday!
Jim the Realtor | April 14th, 2008 at 2:03 amJim,
John | April 14th, 2008 at 2:31 amWho goes to these auctions besides interested professionals? Are there people that go to bid on a specific property? In your opinion, are the auctions successful? Late last year, I believe you said on your blog,that you might do an auction approach to new sales this year yourself. Is it worth it for an individual real estate professional to try that? It sounded like a good idea at the time.
From my January experience, I would not say these auctions will be a waste of time, even though the Auctioneer is placing his own bids on most of these properties above what real bidders are offering. As more and more of them do not sell, REO administrators who use auctions will get more serious with pricing them to sell as time goes on, maybe towards the end of the year.
Bruce Norris out of the inland empire has been following these auctions, and yesterday interviewed the Chairman of REDC on his radio show. It can be accessed for free at http://www.thenorrisgroup.com/radio.html
Next weekend Norris will be doing the second part of the interview, and I hope he asks some tougher questions about the auctioneer placing bids to try to get the price up to the lender’s reserve. I know Norris has been critical of this in the past.
Kingside | April 14th, 2008 at 4:18 amDo people get the 5% back if their winning bid was below the banks reserve price, and the deal does not close?
Simone | April 14th, 2008 at 4:32 amSee the attached link on REDC auctions. It is a total rip off. The link I attached shows their questionable auction practices. I attended the Temecula auction last night. There were not any deals. You could do better going direct to bank owned properties and dealing.
http://www.sdlookup.com/Forums/General/tabid/57/forumid/270/tpage/1/view/topic/postid/17968/Default.aspx#17968
Anonymous | April 16th, 2008 at 4:42 am