Posted by Natalie-VA on June 17, 2005 at 10:16:42:
Unfortunately, what you’re saying is true. A lot of these people end up making money after all. They are getting rewarded for stupid behavior. I sit here and call them crazy…maybe I’m the crazy one. At lease I can sleep at night knowing that I bought it right and didn’t gamble.
Ridiculous auction behavior (long) - Posted by Natalie-VA
Posted by Natalie-VA on June 16, 2005 at 09:59:18:
I went to a foreclosure auction Tuesday in Virginia Beach. It’s been difficult if not impossible to get a decent deal at auction these days, but I follow them anyway.
Two houses went up for sale. I bought one which was rescinded the next day since they had filed bankruptcy, but the other sale was the amusing one…
Nice house in nice area, I estimated ARV to be 285k. Outside has some deferred maintenance, nothing major. Couldn’t get inside since it was occupied. Well, this thing got bid up to around 283k. Can you believe it?
While we were in the conference room signing paperwork, the guy who bought it starting asking me the square footage and # of bedrooms on the house he just bought. Hmmmm. I asked him if he planned on living there. I figured that had to be the case since the bidding went so high. He says that no, he plans to fix it up and resell it. He then says that he really was interested in another property that had gotten cancelled so he decided to bid on this instead even thought he hadn’t even driven by it.
I’m seeing this type of behavior WAY too often. These people are crazy.
Same problem here in louisiana. Auction property going for at or above FMV. You can get better deals from the real estate listings. of course our numbers are much, much lower than the west coast numbers.
Instead of wholesale a property for quick cash and 10-20% below appraised value, put them up for auction. Looks like they would get bid up close to Appraised value. Pocket an extra $10,000 on your deal.
All these people jumping on the bandwagon & paying outrageous prices for junk is making it hard on legitimate investors. If the market does soften it will be good for them. Everyone think all u have to do is just buy & you’ll get rich.
I have a house I just recently bought & sold. I paid $81K for the house & put about $25k into repairs, sold it for $150K. Another house across the street similar to this one went up FSBO. I offered the lady $83K, cuz that’s what it really was worth. Some newbie came along & gave her $108K. That’s entirely too much as the house needs about $25-30K in repairs. Although I’m sure he didn’t realize that when he bought it, I bet he’s finding it out now. No doubt, the buyer will lose money & it will be one less to have to worry about.
These people that don’t know what they’re doing need to stay out of this business. I have no sympathy for them whatsoever. Let them go sell Amway or something.
I recently went to an auction where 30 properties were up for bid. It was getting so laughable that the folks around me were placing our own ‘bids’ (more like bets) on what the properties were about to go for - usually at FMV or higher. I’d bet anything that these bidders wouldn’t pay those prices in a straight sale. It’s all the auction frenzy.
It just goes to show that you need to get to the owner before the property gets there. Also before they realize they’ll get more cash (albeit really destroy their credit) if the home does sell at auction.
A treasury auction took place recently for 7 San Diego homes all of which had some sort of mechanical flaw from bad foundations to sliding hill sides. Hundreds of bidders came…standing room only. I was shocked at the prices. No more than 5% off highest comps if not full retail.
One had a open trench in the back yard. I discussed it with the neighbor. He said raw sewage flows out of the trench and also leaks from under the house which has no access because of an illegal add-on that covered the crawal space opening. He also said I was the only one who came to him curious of the trench.
Another had a tree trunck growing into the foundation.
At the auction I asked many potential buyers if they had seen any of these flaws. All looked at me puzzled. No one had really looked them over except for a quick look inside or drive by.
I just thinking OUCH! every time the auctioneer said sold. There’s another lesson learned.
Property better continue to rise fast for these speculators so they can fix these homes and not loose a few bucks.
I went with a friend to a well advertised auction in Southern California several months ago. They auction off oddball lots in undesirable locations. I have attended these auctions on and off for about 20 years, and had estimates of what I thought the properties were worth.
The lots were bid up to 6 to 10 times what they were worth. Several people around us were asking us about some parcels, because apparently we were the only people that had gone out and seen them. Lots went for more than the full retail asking price of similar lots.
I just hope that the slowdown is easy, and steady, instead of a crash. Lots of people are going to get hurt badly…
Depending on where you’re located, that may be the problem that is pushing these people along. This guy comes along and pays too much for a property, puts all the repairs on his credit card and looks like he’s going to loose money. However, at this time, I’m finding that there is an endless supply of bigger idiots behind him willing to pay more than the property is worth. Just look at all the posts about people not even going to look at properties, you think once they do go look and fall in love with the place they aren’t going to pay the extra? People don’t care that the house exactly the same across the street sold for 50K less no more than two weeks ago, they want it now because Real Estate is where everyone is telling them to put their money.