Bank of America has been “working on their system”.
In July, they conducted 258 trustee sales of properties throughout San Diego County – either sold to third parties or back-to-bene.
Yesterday they blew out 79 properties in one day!
There are several notes:
1. They were pricing them very aggressively.
In July, they sold 33% of their trustee sales to third parties. Of the 79 properties offered yesterday, 72% were purchased by third parties. Yesterday’s properties also sold for an average of $48,000 over the opening bid, which is phenomenal when the average price was in the $200,000s. BofA was looking to dump some properties!
2. The big buyers must have been tipped to have that many third-party sales – B of A only had nine trustee sales the day before. But if the volume continues, the mom-and-pop bidders will be back – most have retreated due to the few properties available, and how the big bidders have run up the prices/squeezed the margins, in order to dominate the environment.
3. If they continue, it’ll create some buzz, right as the market is poised to go to sleep for the rest of the year. B of A has 510 properties scheduled for next week!
4. These properties will be selling for retail, or retail-plus.
A. Flippers will do the 3-day makeover and list for top dollar – and get it. Buyers, especially first-timers, want to buy a cleaned-up, renovated home, and close in 30-45 days.
B. The back-to-benes will be offered at retail, even if they aren’t fixed up. They haven’t been giving away any of their REOs lately, and thankfully, everyone loves a bank deal.
C. Some day, people will question the media’s insistence that foreclosures are bad. It’ll probably take the other servicers to notice how it’s working for B of A, and do the same with their portfolios. If they manage it properly, they could create buzz plus momentum, and some true market clearing.
5. Only six of the 79 were in our NSDCC, but there are another 165 on their auction list, scheduled over the next couple of months.
Let’s hope it continues?
Foreclosures for everyone!