IN A BUYER'S MARKET, SOMETIMES SEEING IS BELIEVING, REAL ESTATE AUCTIONS

By
Real Estate Agent with Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate 303829;0225082372

BUYER TO AGENT:  Is this a good time to buy a home?  I've heard that there are some really good buys in foreclosures, auctions and short sales.

AGENT:  Could be.  But, foreclosures, auctions and short sales might not get the best home for your family in the location you need.  Think about what you really want to buy for the long term. 

BUYER:  O.K., but show me all of the foreclosures, auctions and short sales first.  I'm sure I'll find a good one.

AGENT:  How about this foreclosure?  It's priced about 5% lower than other homes in the neighborhoodd.

BUYER:  Are you kidding me?  There are no appliances.  The landscaping is dead.  I can see the high water mark in the basement.  Do you know how much money it would take to put this home in shape to live in?  What's going on here?

                                                                                                                                                                                AGENT:  We'll go to the auction for this one Tuesday. 

BUYER:  Are you kidding me?  The agent had the house listed for $492,000 but the auction started at $700,000.  You showed me the comps for $690,000.  The people are still living in the house.  What kind of "auction" is this?  What's going on here?              

AGENT:  How about this Short Sale?  It's the only one in the area of your children's schools. 

BUYER:  Are you kidding me.  The comps on this house are $425,000 and the thing is listed for $499,900.  The owner is so far behind they might as well let it go to foreclosure.  What's going on here?

BUYER:  Is that all there is? 

AGENT:  What about this new listing in your price range.  It's in the right school area.  I looked at it last night  and it's got everything you want. 

BUYER:  O.K.  We'll look, but I want a good buy. 

Courtesy:  Homefinders.com

 

 

UPDATE:  04/14/2008.  AUCTION MARKETING HAS BECOME MORE POPULAR AS A WAY OF SELLERS TO GET MORE EXPOSURE FOR THEIR HOME FOR SALE.  While many homes listed as "auctions" are not expected to bring far below market, there are some good buys to be found in real estate auctions, particularly the "absolute" auction. 

Posted by


_______________________________________________________________________________________________________


Want to learn more about Loudoun County, VA? Join Loudoun County, VA on Facebook!

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Tags:
real estate auctions
foreclosures md
foreclosures va

Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the tshirt to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Show All Comments
Ambassador
498,843
Brian Schulman
Coldwell Banker Select Professionals, Lancaster PA - Lancaster, PA
Lancaster County PA RealEstate Expert 717-951-5552
Lenn, buyers all think foreclosures are the biggest bargains.  If you try to discourage them, they'll go to another agent.  It seems like you just have to go through the drill with each buyer as a reality check.
Sep 13, 2007 11:23 AM #50
Rainmaker
451,192
Allison Stewart
St.Cloud Homes - Saint Cloud, FL
St. Cloud Fl Realtor, Osceola County Real Estate 407-616-9904

Lenn, are you kidding me? 

Sorry I couldn't resist... You hit this one right on the head. 

Sep 13, 2007 11:53 AM #51
Rainer
7,615
All-Real Estate Affordable Real Estate Classifieds
AllReal-Estate.com - Real Estate Classifieds - Holts Summit, MO
Great post Thanks
Sep 13, 2007 12:04 PM #52
Ambassador
2,391,560
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland


Carmen:  I think I understand the situation in Florida.  It's rough.  It's not nearly that bad here.  But, it's tough.  Our problems could be reduced dramatically if
the prices would just come down.  A lot of them would sell. 

Connie:  Foreclosures are NOT that much of a bargain around here.  If they were, I'd buy some.

Bob.  Check it out.  It's a bit of a scandal for American Home Mortgage.  If what I read is true, the trust officers are going to be on the hook for this one.  Then, on the other hand, Fannie Mae seems to think it's O.K. to let them remain as the servicing agent for thousands of loans.  It's crazy, crazy.

Rebecca.  My pleasure.

Mitchell:  I've tried that too.  They have to be shown around here.  So, we show them. 

David:  They do get around, don't they??

Brian. Right you are.  So you show them and they decide to stay where they are.  We have a lot of folks around here who, if they can't get the "deal of the century", they aren't in the market.

Allison:  Thanks.  It's pretty obvious around here.
Sorry I couldn't resist... You hit this one right on the head. 

Daniel.  My pleasure.  Come back often.
Sep 13, 2007 01:28 PM #53
Rainmaker
163,574
Susan Milner
Florida Future Realty, Inc. - Cape Coral, FL
Cape Coral Real Estate Broker, FloridaFutureAgents

Excellent blog. Foreclosures & short sales are NOT for everyone. I can honestly say some have sold at really great prices but most are not these awesome deals that everyone expects. It has a lot to do with the agent handling the listing too - how they are at pricing & negotiations.

Those that need to find a nice home in 30-45 days should stay away from short sales & bank owned properties. These are good for people that have no urgency and investors.

 

Sep 13, 2007 03:09 PM #54
Ambassador
2,391,560
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Susan.  Thanks for commenting.

You are right on the matter of forclosures not being for everyone.

Bank foreclosures are not a problem here because they are listed with local agents and they usually go pretty smoothly.  We just settled a short sale that took about 5 months.

The problem with most foreclosed properties is condition.  Folks don't realize that it's going to cost what they saved to get the property in market condition.  Only a owner with capable "sweat equity" can really do well with these things.

Sep 13, 2007 03:41 PM #55
Rainmaker
138,418
Paul Silver
Focus Professionals, Inc. Rhode Island Real Estate - Newport, RI
Rhode Island full service real estate firm

yes yes yes... and then there's the one with no pipes or electrical wiring...

I assume we all know that many of these properties dont appraise well, and so getting loans for them is tough, at best...

What about the one where the buyer is willing to pay the seller $40K more than the asking price if the seller put's in bathroom toilets, floors, etc... so that they can then get a loan...

@$&% 

 

Sep 13, 2007 03:51 PM #56
Rainmaker
163,574
Susan Milner
Florida Future Realty, Inc. - Cape Coral, FL
Cape Coral Real Estate Broker, FloridaFutureAgents

Lenn,

Most of our short sales are new or newer homes here in our area. Very few are what most would picture when they think 'foreclosure'. We are having success with many right now. Besides some appliances needing replaced (stolen) I haven't listed any that need much of any work.

Sep 13, 2007 03:55 PM #57
Ambassador
2,391,560
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Paul.  You reminded me of one that one of my agents had late last year.

We suggested an FHA 203k loan for a great little house that needed a new kitchen and a garage to be market for the neighborhood.  We were 90% into ratification when the buyer decided that the seller should do all of that and he would pay half what it would cost. 

No deal.  Seller didn't have a dime. 

Sometimes, as you say ((*^%#^&^

Sep 13, 2007 04:14 PM #58
Ambassador
2,391,560
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Susan.

Come on down and buy a new home in Sunny Florida.  You don't need money.  100% loans, no closing costs, stated income O.K. 

Uh huh.  Then the payments began and they couldn't flip and now they're stuck.

 

Sep 13, 2007 05:36 PM #59
Ambassador
385,861
Tracy Santrock
Fonville Morisey/Santrock Realty Group, Inc. - Cary, NC
Raleigh - Cary Realtor

Lenn,

There is a huge misconception in the market, especially my market, that you can get a good deal w/auctions, short sales, and foreclosures.  Well listen up-the mortgage brokers can't afford to give the farm away, the auction folks need to make a buck too.  If you're not an investor there is no need to go down that route. Go for a property that makes sense for your lifestyle. 

 

Sep 13, 2007 07:05 PM #60
Rainmaker
696,858
Lanre Folayan
Keller Williams Capital Properties-Buy a home in Washington DC. Sell a home in Washington DC - Washington, DC
How much is my Petworth DC House Worth?
Sometimes seeing is believing. Like you said Lenn,a lot of people don't think buying long term. It must be a blessing for home buyers and sellers who utilize your services. You are so competent and knowledgable of the real estate market and you tell it like it is. Great post.
Sep 13, 2007 10:41 PM #61
Ambassador
2,391,560
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Tracy.  That misconception has always been in the public.  Today it is fed by the press talking about foreclosures daily. 

Lanre.  Helping my buyers find a great house is my pleasure.

Sep 14, 2007 06:11 AM #62
Rainmaker
86,091
Paula Henry
Home to Indy Team @ Sycamore Group Realtors - Avon, IN
Realtor - Indianapolis Real Estate - 317-605-4174
Lenn - I just had a cal yesterday from a gentleman who wanted to know about tax sales and foreclosures. I ran a search and found 189 properties, with only about 5 which I would consider to be a great deal...........if they can get the bank to cooperate. The press sure leads a lot of buyers to believe every home should be a great deal.
Sep 14, 2007 07:33 AM #63
Rainmaker
219,651
John MacArthur
Century 21 New Millennium - Washington, DC
Licensed Maryland/DC Realtor, Metro DC Homes
Lenn - You have knocked it out of the park. If I didn't know you were in my market, this post would have you pegged. This is the world we live in in the DC area. I hear these questions every day. Lord love a duck, will it end.
Sep 14, 2007 10:44 PM #64
Ambassador
2,391,560
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Paula.  Agreed.  This is not new.  These things have been around forever and I've gotten calls from "bottom feeders" since I've been on the Internet.  I used to sell HUD foreclosures, but gave that up because I just got tired of looking at overpriced junk.  The HUD program is a scam on the consumer, but they don't know the difference. 

John.  Hardly a day goes by that I don't get a call from someone asking to see foreclosures or calling about a home going to auction that they saw on Homesdatabase.  They are all listed for WAY below market and WAY below what they will sell for.  Most of the auction listings are phony anyway.  The seller is sold a bill of goods by the company doing the auction.  They have a reserve for market value.  You gotta love it.  I don't have a problem with bank owned properties though.  They have already been foreclosed and are sold just like any other home once you explain the additional addendum to the buyers.  

We've always had these properties.  They've just not been featured in the local and national press as they are today.  Now the consumer is more confused than ever.

Sep 15, 2007 05:41 AM #65
Rainmaker
163,574
Susan Milner
Florida Future Realty, Inc. - Cape Coral, FL
Cape Coral Real Estate Broker, FloridaFutureAgents
Lenn, Yep. Sad. But you know what they say...."if it sounds to good to be true....."
Sep 15, 2007 10:02 AM #66
Rainmaker
407,620
Karen Monsour
Coldwell Banker Fort Lauderdale Beach - Fort Lauderdale, FL
REALTOR, SSRS - Sells FL Waterfront, Short Sale Expert!

I really don't think this house is what your are looking for, you don't want a fixer upper, you need to be able to move in in 6 weeks!  But, yes, yes, yes, I really want to see it!  It "doesn't look THAT BAD from the outside".

Ditto Susan M!!!

Price is great! No wonder...no interior walls, just shells of what looked like Wilma went through (and probably did!) no appliance - half a kitchen...AND I WAITED AN HOUR FOR THEM TO SHOW UP!!!

Only to hear a "sigh" and a "I guess you were right Karen!"

C'est la vie!

Karen Monsour, Fort Lauderdale, Fl

Sep 15, 2007 06:38 PM #67
Ambassador
2,391,560
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Susan.  Actually, we've always had the "bottom feeders" around here.  I've never liked working with them.

Karen.  That's about the way it goes.  I also use the term "Money Pit".  It's very effective.

 

Sep 15, 2007 06:55 PM #68
Rainer
19,953
Membership Cancelled
Pullman, WA

Your post really hits home!

Sep 17, 2007 03:46 AM #69
Show All Comments
Ambassador
2,391,560

Lenn Harley

Real Estate Broker - Virginia & Maryland
Ask me a question
*
*
*
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the tree to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Additional Information