There’s a rather large real estate auction taking place here in Phoenix in just a few minutes, with around 150 foreclosed properties going to the auction block in search of a new owner.
I’m sitting this one out as are my clients.
There may be some deals to be had today, assuming enough legwork was done a couple of weeks ago during the three days in which inspections were permitted. Would-be owners had the opportunity to have inspections conducted at their expense on properties that they may not actually end up owning – to my mind, an unnecessary $400 gamble.
Why unnecessary? Because the hook that makes the auction so attractive – the incredibly low opening big – also is the very thing that ultimately leaves so many buyers unhappy. They are looking for a house at 50 cents on the dollar. That may not happen today. A couple of weeks ago, when Cachet homes sold multiple homes at auction, most were sold within 80-85% of the base price. Still not a bad deal, but not what people want when the starting bid is 20% of the base.
Condition is the biggest gamble of all. Yesterday I viewed a bank-owned home where bees apparently have made a hive in the stucco. (And, of course, I forgot my camera.)
Purchasing a bank-0wned home that’s in the MLS, buyers have a 10-day window during which inspections can be conducted. Just as in the auction, the inspections are at the buyers’ expense but at least the buyer knows that have the exclusive opportunity to purchase the home. It’s not $400 wasted to inspect a house being purchased by somebody else.
If you didn’t have the home inspected and you purchase at auction today, vaya con Dios. You are purchasing the home as-is. If it’s in good shape, congratulations. If it’s about to fall to the ground because of severe structural issues, it’s still yours. It’s a six-figure gamble all in the name of a so-called deal.
Almost all of us have heard the saying that when something seems too good to be true it probably is. That’s almost certainly the case with today’s auction.
The sooner it’s over the better.
[tags]Phoenix real estate, foreclosures, real estate auctions[/tags]