On August 14th at the San Diego Convention Center, hundreds of bank-owned homes will be auctioned in a weekend event slated to draw thousands of potential homeowners. This event is the second of its kind, courtesy of Green River Asset Management Group. Considered the William Wallace of the lending industry, Green River is attempting to unite warring banks, Douche Bank, Countrywide, Bank of New York, Wells Fargo and others, for a common purpose of liquidating their growing inventory of foreclosure properties. The event promises the opportunity to purchase homes priced below market. But will the home auction deliver?
Considering the history of auctioning real estate in North County San Diego, one might be inclined to pass on this month's event. The results of similar real estate auctions have been meager at best. One of the more recent auction blunders was held in the Carlsbad community of Bressi Ranch in October 2006. Sixteen former model homes, purchased the year prior in bulk by an investor group, went on the auction block. And, although well advertised, both paid and unpaid, only a few dozen bidders attended. Bids came in low and none of the properties sold. The advertising created the “everything must go” atmosphere and buyers came looking for a deal. But, like many sellers using auctions to attract buyers, the owners of Bressi Ranch models set the reserve amount at the standard market price. As a result, both buyer and seller left unsuccessful.
Green River Capital is attempting to break the bad-luck streak for home auctions. Instead of searching for foreclosure property through outdated and inaccurate websites generated by third-party vendors, Green River Capital will gather hundreds of bank-owned properties simultaneously, making it easy for buyers to find realty that fits their needs. Green River Capital is providing competitive financing, food and entertainment.
But buyers take caution, home auctions limit the power of the buyer. Those participating in the auction waive their normal 17 day inspection period and must purchase the property in “as-is” condition. Unlike bidding on furniture or an automobile, a home is a complex entity that could have any number of unseen defects in wiring, foundation, or structural support. Evidence of a cracked slab could easily be overlooked, as a buyer does a walk-through of the property before auction. Such an oversight could cost hundreds of thousands of dollars in repairs, leaving the buyer with little recourse to go back to the seller for damages. Once the auctioneer cries “sold” a legally binding contract is established. The bidder cannot have a change of heart.
An auction can also be intimidating. Held in an auditorium filled with thousands of competing buyers, the fast-talking auctioneer challenges buyers to outbid each other on property with the intention of using pace and emotion to increase the price. Inexperienced bidders can get caught in the excitement, bid more than what they are comfortable paying, and forget that an additional 5 percent of the final sales price will be added to the total amount owed. A $650,000 final bid does not have the same feeling as $682,500, however, that is the end result.
Remember, many of the homes at the auction have already been on the market. The benevolent host is a collection of emotionless banks wanting to recover their soured investment, but are not planning on simply giving away their properties. Weigh your options carefully and do your homework before the auction. Happy hunting.
Visit www.ushomeauction.com for more details.
Considering the history of auctioning real estate in North County San Diego, one might be inclined to pass on this month's event. The results of similar real estate auctions have been meager at best. One of the more recent auction blunders was held in the Carlsbad community of Bressi Ranch in October 2006. Sixteen former model homes, purchased the year prior in bulk by an investor group, went on the auction block. And, although well advertised, both paid and unpaid, only a few dozen bidders attended. Bids came in low and none of the properties sold. The advertising created the “everything must go” atmosphere and buyers came looking for a deal. But, like many sellers using auctions to attract buyers, the owners of Bressi Ranch models set the reserve amount at the standard market price. As a result, both buyer and seller left unsuccessful.
Green River Capital is attempting to break the bad-luck streak for home auctions. Instead of searching for foreclosure property through outdated and inaccurate websites generated by third-party vendors, Green River Capital will gather hundreds of bank-owned properties simultaneously, making it easy for buyers to find realty that fits their needs. Green River Capital is providing competitive financing, food and entertainment.
But buyers take caution, home auctions limit the power of the buyer. Those participating in the auction waive their normal 17 day inspection period and must purchase the property in “as-is” condition. Unlike bidding on furniture or an automobile, a home is a complex entity that could have any number of unseen defects in wiring, foundation, or structural support. Evidence of a cracked slab could easily be overlooked, as a buyer does a walk-through of the property before auction. Such an oversight could cost hundreds of thousands of dollars in repairs, leaving the buyer with little recourse to go back to the seller for damages. Once the auctioneer cries “sold” a legally binding contract is established. The bidder cannot have a change of heart.
An auction can also be intimidating. Held in an auditorium filled with thousands of competing buyers, the fast-talking auctioneer challenges buyers to outbid each other on property with the intention of using pace and emotion to increase the price. Inexperienced bidders can get caught in the excitement, bid more than what they are comfortable paying, and forget that an additional 5 percent of the final sales price will be added to the total amount owed. A $650,000 final bid does not have the same feeling as $682,500, however, that is the end result.
Remember, many of the homes at the auction have already been on the market. The benevolent host is a collection of emotionless banks wanting to recover their soured investment, but are not planning on simply giving away their properties. Weigh your options carefully and do your homework before the auction. Happy hunting.
Visit www.ushomeauction.com for more details.