Saturday, May 24th, 2008 at 2:53 PM
Auction Results – Preliminary
Those of you who opened your L.A. Times this morning to read about the big Laker victory last night were greeted by advertisement of another auction of foreclosed homes coming up in June.
What were the results of the San Diego auction last month?
The big REDC auction happened on April 12th, and they were adamant about closing the properties sold within 30 days. Our tax rolls are updated daily but are a few days behind – as of today they show all recordings that happened on May 15 or older. That is giving those escrows 34 days to close, let’s check and see how they are doing.
If you were an auction house that stood to make a couple of million dollars in commission, you’d have the closing process working like a machine, right? If you were the bank who owned these properties and were off-loading them at big discounts, you’d be looking for quick money, wouldn’t you?
Countrywide was the in-house lender, you’d think they’d have their loan processing whipping these out.
I was there to see 87 of the 217 properties auctioned off.
Of the 87, only SIX have closed so far.
The buyers put down a 5% non-refundable deposit on the day of the auction – did a bunch of them walk? Or was the winning bid too low when sent to the lender/owner for confirmation, and they were rejected? The banks had 15 days to accept the bid, how many did they kick to the curb?
There have been 21 of the 87 that have gone back on the market since the auction, re-listed by the bank owners. Of the 21 there have been seven that have found a new buyer, and are in escrow. They did lower the list prices by 14% on average below the previous prices, but all of them listed higher than the winning bid. It must mean that the banks cancelled many of the auction bids for being too low, and took a chance trying to make a few extra bucks.
Here was one of the more interesting ones, in Escondido:
727 Bear Valley Parkway sold for $1,122,000 in March 2006, and was financed 100%. It’s a 3,300 sf house built in 1970 on almost two acres.
The winning bid at the auction was $585,000, which counting the auctioneer’s 5% fee would have made for a $614,250 sales price.
It had been listed for $799,000 until March, so apparently the bank didn’t like the auction bid, and put it back on the market for $699,000 – and found a buyer in 18 days.
We’ll check back in a few weeks to see how many others sold at the auction actually closed. If they can only sell off 10%-20% of the inventory at the auction, it makes you wonder if they will keep trying it.
Posted on Saturday, May 24th, 2008 at 2:53 PM in Auctions | 6 Comments » | 
Print
You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.
Bank: Don’t worry with home prices dropping, buyers unable to get financing, and public perception going negative on housing. We should be able to get a higher price.
What bank managers are doing is praying for a bailout or hoping to push off sales long enough to quit in 6 months and make it all the next persons problem.
shadash | May 24th, 2008 at 5:51 pmHey Jim,
My wife and I checked out that house on 727 Bear Valley Pkwy. HUGE house on a beautiful view lot, but the 1/4 mile long private driveway was more potholed than downtown Kabul (and considering it’s "private", who do you think has to pay to fix it?). House has a ton of potential, but the inside was a wreck – a failed attempt at trying to update a very ’70s art deco theme with modern upgrades. The house had a really odd layout too. To make it nice, would need $200K (not including the approx. $75K for the driveway), putting it at a total of $900K. Risky investment? Well, if I had 900K to spend, it definitely wouldn’t be in that location. There are some much nicer neighborhoods in South Escondido.
Genshammer
Genshammer | May 24th, 2008 at 7:21 pmHi Jim –
I didn’t track a batch of them like you did, but I watched one home in my area that was sold at auction (REDC again) on February 2. I had run into the buyer the afternoon of the auction, and he had told me he bought it for $593K, which included their 5% buyer auction fee, so it was $565K to the lender. I kept checking title to see when it closed, and was surprised that it came back on the MLS after 70 days.
I spoke to the REO listing agent, who told me that it had been in escrow with the same buyer that whole time, and he failed to qualify! They put it back on the market at $599K and received multiple offers, so I’m back to watching to see when (if) it closes and for how much. (I submitted one of the multiple offers, but my buyer decided to pull hers after realizing that sitting vacant 9 months had allowed rats to get in and eat a lot of wiring in the attic!)
Vicki Lloyd | May 24th, 2008 at 9:01 pmDespite the ad you mentioned I was thinking just this week the auctions seem to be going by the wayside. I think the evolution of this downturn has been: high asking price, same price with one year of HOA or plasma TV, auction, and now just market based prices? Clealry DT, Oceanside and Chula have followed this pattern. Do you think my evolution is correct, how long until NC Coastal follows the pattern.
LV Renter | May 25th, 2008 at 4:59 pmJim,
Makes me wonder how San Diego pendings are doing in terms of 1) the fall out rate; and 2) the number of "closings" that are actually sold to investors that will then relist (flip) and therefore just add back to inventory. The reason I ask is because inventory has been well behaved this year, but perhaps its just a temporary phenomenon due to REO price slashing that started in Feb/March.
David Pearson | May 25th, 2008 at 5:25 pmi know the owner of this home,the bank paid him 8k
n8 | May 27th, 2008 at 1:28 amto leave early even after he defaulted!