Buyers 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):
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’:
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.