Going Once, Going Twice…

Readers of this blog are a never-ending source of fascinating content. One of our regulars recently sent me a notice regarding an upcoming auction of several homes, an unusual proposition in this market, which I immediately sent to Jaded, our resident public record-scraping-superhero, because I just knew he couldn’t resist digging up the real dirt on these properties. Deal or no deal? Read on…

Diane came across a notice for an upcoming Reno/Sparks REO auction. On 2 August, Hudson & Marshall is set to
auction a Realtor’s dozen (11) properties at the Hampton Inn. She assigned “digger dog” the task of
researching the histories of these properties for you, so here goes. Any deals here?

2955 LAKESIDE#113
Bought 14
June 2005 $122,000, 100% financing (80/20 typ)
NOD (Notice of Default) 13 Oct 2006
TD (Trustee’s Deed) 19 Mar 2007, $89,920
Listed $101,500
(Investor – lost 2 other properties to TD)

5350 BUTTERFLY
Bought 28
April 2005 $440,000, 100% financing
NOD  25
Oct 2006
TD  7 Mar
2007 $379,813
Listed $359,900

681 OAKWOOD #3
Bought 15
Dec 2005 $165,000, 100% financing
NOD 9 Sept
2006
TD 8 Feb
2007 $143,309
Listed $136,900

13560 MT. RANIER
Bought 19
Nov 2005 $205,000, 85% financing
NOD 4 Aug
2006
TD 6 Dec
2006 $188,398
Listed $184,900

563 QUEEN
Bought 24
June 2003 $194,000
Refi 15
Feb 2005 $265,000
Refi 30
Sept 2005 $364,500
NOD 15
Dec 2006
TD 15
April 2007 $294,000
Listed $264,900

1051 MCGEE
Bought 26
Dec 2004 $300,000, 100% financing
HELOC 13
Dec 2005 $126,000
NOD 5 Dec
2006
TD 12
April 2007 $253,768
Listed $283,900

2425 CONTRAIL
Bought 29
July 2005 $332,500, 100% financing
NOD 7 Oct
2006
TD 3 April
2007 $202,145
Listed $267,900
(1^st loan was $266,000. I’m not sure if an underbid was accepted, or
if the low TD amount is an internal write down at the bank.)

2885 SANTA ANA
Bought 11
May 2005 $330,000, 100% financing
NOD 3 Nov
2006
TD 26 Jan 2007 $288,855
Listed $284,900

610 CANDY
Bought 11
April 2003 $180,000
Refi 28
Dec 2005 $315,000
NOD 3 Nov
2006
TD 13 Mar
2007 $270,265

2290 INDIAN WELLS
Bought New 14
April 2005 $438,411, 100% financing
NOD 30
Oct 2006
TD 7 Mar
2007 $376,295
Listed $379,900

When you purchase at an auction like this, you also pay a 5%
Buyer’s Premium to the auctioneer, so factor that into to your bid. Auctions can be “absolute”, where the
properties sell no matter what the highest bid is, or the properties can have
“reserve” prices on them, just like on eBay. All the properties at this auction seem to have reserves.

Do any of you large brains out there have any
idea how a bank would set their reserve price in relation to the amount of the
TD? The auctioneer claims a 92% success
selling at auction, or within a few days when the banks accept an offer that
was below the reserve price.

All the properties except Indian Wells are resale, second-tier properties. All except Lakeshore
appear to have been owner-occupied. A
couple of the property listings mentioned that only a 2% total commission was
available, which might be one of the reasons why these are still on the market! At least 8 of these 11 properties had 100%
financing. None of these properties went
REO due to interest rate resets. It is
shocking how fast these deals tanked.

Any takers? If you
really liked the house and were willing to test the bank’s reserve price,
Butterfly, Contrail, and maybe Indian Wells might be worth a shot. No way I would offer more than 75% of the
original purchase price. Me, I’ll sit
this one out!