bubbleinfo.com

Investors – how do you like the idea of buying mortgages that are in default?  Or once foreclosed, buying the properties direct from the seller/lender?

Here’s a link to a company doing it:

http://www.realtynotebid.com/

They’ve just gotten started in the last few months, so tread carefully, but I love the idea.  If the offering/bidding process was this simple, we’d sell more homes.

They are selling notes and properties through an internet auction.

Check out this one in rural Oceanside, out by Fallbrook:

The lender just foreclosed on this one (with a $150,000 opening bid!) so you are buying the property, not the note. 

300 Wilshire

3 br/2 ba

1,630sf

2.43 acres

Current High Bid: $145,000

Eight days left.

Here is the direct link:

http://www.realtynotebid.com/bidpage/bidpage.cfm?item_id=100021&AP=0&AB=0

Like most auctions they have a 6% buyers fee packed on top of the winning bid, but still, there could be some deals. 

If you make a bid on this or any item through their website, during the registration process they ask you how you were referred.  If you put “Jim Klinge” in the box, I’ll get a chunk of their fee – and it won’t cost you any more!

You gotta look everywhere these days!

People have asked about the condos in downtown Oceanside that are being auctioned tomorrow beginning at 3pm at the Carlsbad Sheraton, which is an interesting choice.  Why wouldn’t you do it on-site so buyers could get more emotionally-involved? Do a big breakfast bash with mimosas?

A hotel-ballroom auction makes you think of guys running around in tuxedos too.

Twenty-nine residential units (of 38) are on the block, with opening bids from $295,000 to $625,000.  In the video, I say that there were no salespeople in sight, but they were on the top floor.

The sales history, by floor:

1st floor – sold all 7 retail units to one family, total of 10,368sf. No price given.

2nd floor – 13 office condos. Seven sold, six for sale, from $256,035-$345,960.

3rd floor – 10 residential, five in front sold, five in back for sale, from $295,000-$355,000.

4th floor – 10 residential, none sold. Ten units for sale, 1,765sf to 2,191sf from $335,000-$475,000.

5th floor – 10 residential, two front units sold $665,000 & $725,000 this year, eight for sale.

6th floor – 8 residential, two front corner units sold, and six for sale, from $445,000-$625,000.

From the MLS tax rolls it looks like 23 sales have closed with cash buyers, and 35 to go. 

They’ll try the 29 residential units tomorrow, and if they have 29 bidders show up, they should blow them out at the opening bid price.  If they refuse, and make some comment about how the opening bids are “giveaway prices” and nobody would consider selling them for that, then they are crazy – take what you can get. 

They’ll probably need at least 50 bidders in attendance to sell out, because so far buyers have gravitated to the premium units – the ones with a glimpse of the 16-screen movie theater next door might not get a bid.

(I said 59 on the video, but I think there are 58 units).  Here’s the youtube video tour:

Here’s the price list:
oceanside-condo-price list (with original prices)
Here’s the floor/unit diagram:
Oceanside-prices-floor-diagram

I guess this little gimmick didn’t work out as planned.

They listed today for $599,900:

The auction went down as expected yesterday – mostly lower-end properties with some warts on them.  

Here are the three most curious:

A. 6473 Caminito Formby, La Jolla 2br/2ba, 1,615sf

This condo was NOT bank-owned - the seller has equity and still has the property listed on the MLS for $675,000 with DOM = 74 days. 

It sold for $546,000 yesterday (including the 5% buyer’s premium), about what they were selling for in 2003. Hopefully it’ll be enough to satisfy the seller’s reserve price. 

B. 2575 Arundel, Carlsbad  6br/4ba, 4,608sf

Another low Bressi Ranch comp in the works – the former owner paid $1,151,000 in December, 2005, and another of this floor plan sold for $1.21 million in May of last year.   

The minimum bid started at $469,000.  It was bid up to $805,000, and with the ‘buyer’s premium’ of 5% added on top, it’ll be $845,250.

People may say that this is not a valid comp because it was an auction property, but I disagree.  They gave ample notice, it was advertised in the MLS, and there were three open houses from 11-4 (and on infomercials non-stop) over the last two weeks. 

C. 1488 Serene, Oceanside  5br/3ba, 2,963sf

My former listing where the bank turned down $502,000 a couple of months ago.  The opening bid was $199,000 - everyone thought it would get into the $300,000s, but would it get into the $400,000s?

It sold for $420,000, and with the vig, $441,000.  The BPO that I sent into the auction company was $445,000, so, if they listened, they might have sold it yesterday!

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Other notes:

1. There were probably ten properties that I saw come back for a second auction, where the initial winning bidder either doesn’t qualify once he gets to the booth, or gets cold feet.

They all ended up selling for less the second time around, which has to infuriate the sellers (and auctioneers). 

One in particular was labeled a duplex, but you could tell in the picture that they were selling HALF of a duplex, and probably why it came back.  During the second auction it was announced that it was a single-family attached, and not a duplex, and the auctioneer asked a contending bidder if he knew it was a single-family.

He said no.

He didn’t know what he was bidding on?

2.  There were approximately 400 people total, with many coming and going.  It was interesting to note how many non-bidders were there – it looked like a third of the attendees (and it could have been half) were there just to observe and take notes.

3.  I LOVE THE AUCTION IDEA, and it has loads of promise for the market-clearing we need badly.  I think those who attend like the excitement, and the idea of ending their search and walking out with a house!  The winning bidders go straight to the financing and escrow booth, and, when done, have completed the vast majority of the paperwork.  If the sellers would just ditch the reserve pricing!!

Wouldn’t it be great if we had a short-sale auction?  It would be less angonizing for buyers if you could round up all the short sales every quarter (or every month?) and conduct the ‘Short Sale Swap Meet’.  At least the buyers would know that they were the winning bidder, and once through the financing/escrow booth know that their offer was accepted – or not.

People have asked about finding a central location for auction information.

I don’t know of one central site, so I guess it’ll be right here!

Trustee Sales

In the right hand column here you’ll see a category called “San Diego County REOs” >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

The first group lists the properties that have received their ‘notice of trustee sale’ and are scheduled to have their house auctioned off, usually at the steps of the county court house in the next 3-4 weeks. 

You can follow the sale dates and times at http://www.fidelityasap.com/ and if don’t mind bringing a cashier’s check for the purchase price and buying without title insurance or inspection, then there you can score an occasional deal.

Right column >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

The second group are the ’trustee sale results’, the properties that will be listed for sale shortly (next 1-3 months) by the lender, unless a private party purchased it. 

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HUD (FHA foreclosures)

FHA properties are auctioned on-line by the Department of Housing and Urban Development.  Offers need to be submitted through a HUD-certified real estate broker (I sent my application in and should be ready in a few weeks).  In the meantine, check out their properties below.

Search by city, county or zip code on the left side:

http://hud2.towerauction.net/CA.htm

If you see one you like to buy, we’ll complete a purchase contract on a HUD form and send in, plus submit the offer electronically.

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IRS Auctions

The U.S. Treasury has some interesting selections around the country:

http://www.ustreas.gov/auctions/irs/

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SD County Property Tax Sales

The last SD County auction was February 22, 2008, so look for the next one coming up after the first of the year:

http://www.sdtreastax.com/pts_currentyear.html

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REDC – next San Diego auction is November 1st

http://www.ushomeauction.com/

My first former listing to be sent to auction (1488 Serene in Oceanside) will be one of the properties auctioned next month.  This house was right in my wheelhouse, but the seller wouldn’t listen - insisting on $500,000+, and it didn’t sell.  Now it’s up for auction on November 1st, with the opening bid at $199,000.

The last check of the previous REDC auction showed that only 30% of the properties actually closed escrow.  i’m guessing that was below expectations, and to juice it up this time they dropped the minimum bids down to practically nothing – in fact, opening bid on one condo was $1.

You may get more people interested that way (John and Lynda had 40 people attend open house today) but bidders aren’t likely to move from $199,000 to $400,000+ in a minute or two.  The opening bids are too low!

Then consider that the sellers’ “reserve price” is hidden, and don’t forget the 5% vig that winning bidders have to add on top of their price, and you’ll see buyers get reluctant in a hurry.

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Kennedy-Wilson

Another private auction compnay.  There are no San Diego County auctions listed currently, but they have a Los Angeles probate auction coming this Wednesday and Thursday, October 22nd and 23rd.:

http://www.kwiauctions.com/index.asp

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Bid4assets.com

A private company who runs auctions on behalf of over 50 counties and the U.S. Marshall, and includes more than just real estate:

http://www.bid4assets.com/

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If you’d like to bid on any of the properties you see at one of these auctions – I am happy to help. 

I’ll give you my thoughts on value and assist with making an offer.  If you are interested in pursuing an auction property, let me know!

If you know of other auctions, chime in!

There were a couple of auctions scheduled yesterday.

The 14 brand new houses in Escondido were a hit, according to the sales office today.  The original builder thought he’d be able sell the 2,900sf to 4,049sf houses for $900,000 to $1,100,000, but he ended up bailing out and another investor took over to finish the construction.  He miscalculated too, and is now figuring he is going to lose around $700,000 on the project.

Yesterday they sold 12 of the 14, priced from $495,000 to $575,000, with one loss-leader at $385,000.  The salesperson today said that those were the minimum bids, but wouldn’t reveal if the final prices were bid up.

They must be feeling pretty good though, they raised the price on the two remaining for sale by $19,000 each.

Here’s the link:

http://www.bidkw.com/properties/1890

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The Mission Beach condos didn’t fare nearly as well – here is Jakob’s review that he left at sdlookup:

“I went to the Ocean Pacific auction tonight. (auctionmissionbeach.com) It was big professional production. It must have cost a pretty penny to put on, with all the open houses for 2 weeks too. They had a dozen escrow officers waiting to ink deals. Pretty good crowd of about 25 bidders with numbers. You had to be prequalified and have a cashiers check of $5000 to bid. Unfortunately for the auction company, the night didn’t go so well. They only got through 9 of the 24 units. 3 got bid on, each for minimum bids and one of those had an undisclosed reserve.

Here’s how the auction went down:
3785 Ocean Front Walk #1. 713sf 1br/2ba. Sold for the opening price of $1,115,000. (previous price 1.9m)
3786 Strand Way #1. 1415sf 3br/3.5ba. Started at $1,850,000. No bids. (previous price 2.6m)
3785 Ocean Front Walk #2. 930sf 2br/3ba. Started at $1,395,000. No bids. (previous price 2.2m)
3725 Ocean Front Walk #3. 340sf studio. Sold for opening price of $495,000. (previous price 825k)
3725 Ocean Front Walk #6. 307sf studio. Started at $425,000. No bids. (previous price 675k)
3607 Ocean Front Walk #7. 1278sf 2/3. Sold for opening price $1,695,000. (previous price 2.4m) Undisclosed reserve on this one, likely not met.
3607 Ocean Front Walk #1. 1097sf 2/3. No bids at $1,895,000. (previous price 2.4m)
3607 Ocean Front Walk #2. 1147sf 2/3. No bids at $1,695,000. (previous price 2.2m)
2123 Garnet #2. 800sf 2/1. No bids at $235,000. (previous price 475k)

At this point the CEO of Accelerated Marketing (the auction company) came out and canceled the auction, saying there weren’t enough bidding action to warrant continuing. He said anyone who wanted to make an offer could come and do it in person. He looked distraught.”

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The San Elijo Hills auction happened today.  The 2,568 sf house that originally sold for $806,500 when new in February, 2005 has been on the market since February, but no takers.  The NOD was filed in May, 2008, so time was running out.

The seller hired an agent who tried the auction format, and held a few open houses in advance to drum up buyers.  The opening bid was $399,000, which was artificially low – or was it?

The house backed up to San Elijo Rd, and had dead grass – but the biggest bummer was that they took out the horns!

The agent carried on about how recent sales nearby had been around $600,000, then hedged later and said sales prices had been around $550,000, which, in his mind, made this an obvious bargain.  But the atmosphere was the same hokey, circus experience that we saw before – well no wonder, it was the same auctioneer as we saw in Fairbanks Ranch a few months ago:

Just like at the Fairbanks auction, it got off to a slow start, but this time after some prodding the four bidders reluctantly responded – the highest bid was $455,000.

The agent and auction people were aghast that people wouldn’t pay more – obviouly this was a great bargain, at least in their minds.  But buyers do their homework these days, and knowing that they’ll have to endure months of the short sale process, it had to be a deal to get someone to bite.  The original loan amounts total $745,100.

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Let’s follow up on a few others while we’re at it:

Wachovia foreclosed on this 4,213 sf one-story gem in La Costa Oaks with a big ocean view. 

The loan had been $1,632,000 in 2007, and at the trustee sale on July 31st the opening bid was $1,425,500, but no takers. 

I had guessed that their list price would be $1.395 million, but they came out hot and listed for $1,245,000 instead.  It went pending in the first week.

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We also mentioned some professional sellers – listings we could watch to gauge how tough it is on flippers.  So far, two of the nine went pending:

The house on Whimbrel in Aviara that was purchased for $636,231 at the trustee sale last month went pending after 21 days on market – it was listed for $799,000, we’ll check the final sales price, but he probably did well.

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Swashbuckling Captain Jack got this one into escrow too.  He had paid $51,173 to the second mortgage holder who was foreclosing, and took ownership subject to the $305,000 first mortgage.  He listed for $519,900 in May, 2008, and in June started lowering his price $5,000 to $10,000 every three weeks until he got down to $484,900.  After 111 days on the market, he found a buyer.

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One I didn’t mention was another of Jack’s deals, this on Adams in Old Carlsbad.  The same type of package – he picked it up at the trustee sale of the second mortgage holder in July, and has about $400,000 into it.  He listed for $619,900 originally, and came down to $579,900 before finding the buyer – it went pending last week too.  It was on the market for 26 days.

We haven’t seen auctions in the MLS lately – until now.  This 2,568 sf house in San Elijo Hills has been on the market since February, looking for around $600,000, but no takers.

They cancelled the listing, and selected a new realtor who has it in the MLS at $399,000.  He is advertising that this house will be sold at a live auction on September 9th, and that “List price is the suggested opening bid, which does not mean that a 1st bid will not be lower, nor that the final bid price will not be significantly higher, that the suggested opening bid.” 

But he’s facing a daunting challenge.  First off, the house backs to San Elijo Rd., as you can tell in his photo with the flags in the background.

Plus, the sellers paid $806,500, and have loans of $745,150.  They’re going to take the high bid from the auction and run it through as a short sale.  I guess it is a tolerable way to get the buyer-procurement process out of the way, so they can get back to enjoying the free rent – the NOD was filed May 13th.

This will be an interesting test – the price is about right to attract buyers, but I’m not sure many are going to go above $400,000 and wait out the short sale process.  I doubt the bank is going to like the result either, the last sale on the street was in May for $630,000 for a 2,646sf model.  But there are two notices of trustee sales on the street too, so what else can they do to rustle up a better sale?

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.

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.