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Category Archive: ‘Auctions’

No Shills…..Almost

Just had to hedge it a little….from CAR:

This law, on and after July 1, 2015, with respect to an auction that includes the sale of real property, prohibits a person from causing or allowing any person to bid at a sale for the sole purpose of increasing the bid on any real property being sold by the auctioneer.

The law, however, does allow an auctioneer or another person to place a bid on the seller’s behalf during an auction of real property if notice, as specified, is given that liberty for that bidding is reserved. The law also requires in this regard that the person placing that bid contemporaneously disclose to all auction participants that the particular bid has been placed on behalf of the seller.

The law exempts a credit bid made by a creditor with a security interest in the property that is the subject of auction when the credit bid can result in the transfer of title to property to the creditor.

Finally, this law prohibits a lender or an auction company that is retained to control aspects of a residential real property transaction from requiring, as a condition of receiving a lender’s approval of the transaction, a homeowner or listing agent to defend or indemnify the lender or auction company from any liability alleged to result from the actions of the lender or auction company and declares a clause, provision, covenant, or agreement in violation of this prohibition to be against public policy, void, and unenforceable.

Assembly Bill 2039 (codified as Civil Code §§ 2079.23 and 1812.610) (effective July 1, 2015).

Posted by on Oct 15, 2014 in Auctions | 6 comments

REO-Auction Contest Results

My high school baseball coach used to say,

“I don’t believe anything I hear, and only half of what I see!”

In our latest contest, readers submitted their guess at the highest bid + 5% buyer’s premium for this property in SE Carlsbad:

http://www.bubbleinfo.com/2014/06/03/carlsbad-reo-contest-2/

lamaca4

The auction included an outrageous set of conditions, which many thought would drive down the price to compensate.  They included:

  1. The 5% buyer’s premium tacked onto the highest bid.
  2. No showings.
  3. Tenant-occupied, and buyer was responsible for evicting.
  4. Cash only.
  5. No buyer’s agent commission paid.
  6. Not in the MLS.
  7. 5% deposit required upon winning.
  8. Reserve price.

They conducted the auction online, which gave participants the convenience of bidding from their couch at home. It should have allowed bidders the chance to double-check the comps as the auction wore on – because every time a new bid was made, they extended the ending by 1-2 minutes.

Those checking the comps would have seen that in the heat of the frenzy last year, three of this identical model sold for $638,000, $653,000 and $679,000.  Then in October this sale with nice view closed for $705,500, which was the highest price since May, 2007:

http://www.sdlookup.com/MLS-130050274-2704_La_Duela_Ln_Carlsbad_CA_92009

The bank foreclosed in 2011, and nobody wanted it then for $459,088.  The opening bid this week was $325,000, and once the auction started the initial bid increment was $25,000.

Most of our readers guessed it would sell in the $400,000s, which would be an adequate buffer to evict and remodel.

Look what happened today:

lamaca42

AND IT DIDN’T HIT THE RESERVE PRICE!!!!!!

Somebody was willing to pay almost $200,000 more than the bank didn’t get in 2011, and that wasn’t enough to reach the reserve price?  Hopefully the bank will come to their senses and reconsider before that bidder changes their mind.  Counting the 5% buyer’s premium, the highest bid was $678,038!

Our closest and winning guess was $568,050, and submitted by blucore – congratulations!

Posted by on Jun 9, 2014 in Auctions, Contests, REOs, REOs for sale, Unbelieveable | 15 comments

Auction Pearl

Do you get a deal buying a house at auction?  Could auctions be the future?

I taped this in January to test out whether you get a deal going this route, or end up paying retail….or more.  I knocked off 20% or $100,000, which makes my prediction of retail value between $468,000 and $485,000.

I thought it might go higher:

Posted by on Apr 1, 2014 in Auctions, Bubbleinfo TV, Jim's Take on the Market | 1 comment

RE Auctions Going Mainstream?

Someone who puts together an auction hybrid and is realtor-friendly could have a big impact on how real estate is sold.  But these guys are a brokerage, so it’s them against the realtor world.  From HW:

DetroitA new company is offering homeowners a new way to sell their home.

SellerNation, a Detroit-based company, combines the urgency of a real estate auction with the expertise of real estate brokers to speed up the home-selling process.

“This new brokerage is a hybrid of the best of real estate auctions and the best practices of real estate brokers – the perfect combination,” says CEO Rod Carey.

“Real estate auctions are great because everyone knows what day a property is going to sell,” says Ron Jasgur, SellerNation president.  “They level the playing field and create a sense of urgency in the marketplace.”’

What makes SellerNation different is its 34-day listing agreements. The company also contributes 5% of its revenues to local non-profit organizations.

SellerNation does not take on buyers as clients. It focuses solely on sellers and provides transparency throughout the sales process, making it “ideal in cases like divorce, estate sales, and probate situations where it could be difficult to keep multiple parties on opposing sides on the same page.”

SellerNation also does not charge sellers a commission. Instead, the company adds a 5% buyer premium to an accepted bid.  A common element of auctions, it’s also becoming a trend among traditional home sales. The National Association of Realtors’ 2013 Profile of Home Buyers and Sellers revealed that 13% of homebuyers compensated the Realtors in whole or in part.

“Everything we do is designed to make our listings attractive to multiple buyers, because competition is what drives price,” says Jasgur. “We’re literally built to negotiate with multiple parties to get the best possible deal for the seller. We’ve seen over and over again that the first offer is rarely the best.”

http://www.housingwire.com/articles/29510-sellernation-offers-the-best-of-both-worlds-one-part-broker-one-part-auction

http://sellernation.com/

Posted by on Apr 1, 2014 in Auctions, Listing Agent Practices, The Future | 3 comments

Auction.com Loads Up

googlecapitalIf N.A.R., realtor.com, and/or other industry leaders don’t get out in front of the changing market, then those with the big bucks will put an attractive spin on their model and try to determine our future.  From techcrunch.com:

Fresh off its public debut last week, Google Capital is putting more money to work this week with the announcement of a $50 million investment in real estate marketplace Auction.com. The valuation of the company post-money is $1.2 billion, and a representative from Google Capital will join the company’s Board of directors and another will take a board observer position.

Similar to other real estate marketplaces, Auction.com connects buyers and sellers of real estate. And the company has sold $26 billion of property since inception. What differentiates Auction.com is that the real estate transaction actually happens online. It’s been described as an “eBay for real estate.” Financing options remain the same as in the offline world (it happens via a bank). Similar to eBay, the highest bidder wins on these auctions.

Launched in 2008, Auction.com only started expanding in Silicon Valley last year, with the company’s headquarters in Southern California. And while Auction.com has raised money from private equity, it hasn’t used much of its unvested capital and is profitable.

Of course, you can draw comparisons to other real estate marketplaces like Zillow or Trulia. As Jake Seid, president of Auction.com, explained in an interview, “Trip Advisor is to Priceline as Zillow is to Auction.com.” He sees sites like Zillow as complimetary.

Read full article here:

http://techcrunch.com/2014/03/04/google-capital-pours-50m-into-real-estate-marketplace-auction-com-at-a-1-2b-valuation/

Posted by on Mar 5, 2014 in Auctions, Listing Agent Practices, The Future | 0 comments

Short-Sale Deals?

searchingforshortsalesBuyers hoping for a deal will have to look high and low these days – because sellers are typically the most optimistic early in the selling season.

Maybe a bank-owned REO?  Don’t get your hopes up, there have only been seven REOs listed in San Diego’s North County coastal region over the last six months.

How about a short-sale?  There have been 38 listed in the same period, but with the lighter load these days, the servicers have been more diligent about selling for full value.

But I heard this story today which could help – maybe?

NationStar Mortgage requires short-sellers to first submit their home to Auction.com for sale – BEFORE the house gets inputted onto the MLS.

Auction.com gets a few days to sell the house to the highest bidder, based on a sales price that they determine after sending out an ‘inspector’ or two.  Not sure if they are assessing the condition and/or value, but we know how Auction.com operates, and their system has one troubling flaw:

Their opening bids are ridiculously low to attract the maximum eyeballs - and once you put an ultra-low price on a house, it is hard to recover.

Here is an example:

This has been on the MLS since September, listed for $1,300,000 (apparently the agent didn’t get the memo about the new process):

http://www.sdlookup.com/MLS-130051639-4035_Royal_Dr_Carlsbad_CA_92008

But starting today and going until January 5th, you can bid on-line to purchase the property, with the opening bid starting at $500,000.  They also advertise it as being a ‘Bank-approved short-sale’:

http://www.auction.com/California/residential-auction-asset/1469796-7284-4035-ROYAL-DRIVE-CARLSBAD-CA-92008-O426

We’ll check back to see if they are having any luck – I have seen this house and we couldn’t get out of it fast enough. It is a wreck of a floor plan that has divided the house into two units inside.

The success of this program will be up to the lenders. Because Auction.com positions the offering to be a screaming deal, the lenders will have to be generous about their reserve prices.

But if they are going to do that, why not just foreclose and get paid immediately, and have the trustee-sale buyer worry about gettting the former owners out of the house?

The original mortgage on this house was $1.45 million, and it looks like no payments have been made since 2010. The balance owed is over $1,800,000.  Do you think the reserve price will be under a million?

Realtors should breathe a little easier too about Auction.com’s attempts to get into residential resales.  I doubt many regular home sellers will agree to an opening bid that less than half of their perceived value.

Posted by on Jan 2, 2014 in Auctions, Jim's Take on the Market, Short Sales, Short Selling | 7 comments

Blaming It On ‘Market Conditions’

Ditch the reserve price and send buyers into a tizzy!

mjMichael Jordan’s 56,000-square foot home in suburban Chicago has failed to sell at auction after the bidding fell short.

Jordan spokeswoman Estee Portnoy says nobody offered the reserve price of $13 million for the seven-acre estate in Highland Park, north of Chicago.

Portnoy says Concierge Auctions publicized Monday’s auction well, but that market conditions aren’t ideal. She says options for the property will be evaluated next year.

The former Chicago Bulls superstar’s home originally was listed at $29 million in early 2012.

http://msn.foxsports.com/nba/story/michael-jordan-chicago-illinois-estate-up-for-auction-but-does-not-sell-121613

Posted by on Dec 17, 2013 in Auctions | 2 comments

Auction By MJ

We’ll see if it sells, but if it does and gets a good pop, then maybe the auction format will gain more acceptance as a preferred way to sell homes:

Concierge Auctions, the auction house overseeing the sale of Michael Jordan‘s sprawling estate, has released this video tour of the mansion and its surrounding grounds for potential buyers. The Highland Park residence is set on 7.39 landscaped acres and offers would-be buyers the ultimate in privacy and luxury. Designed by Michael Jordan, the mansion boasts 56,000 square feet of space, and features nine bedrooms, 15 bathrooms, a regulation size, NBA-quality basketball court, and a beautiful pool.

Posted by on Nov 4, 2013 in Auctions | 5 comments