REDC Auction (Phoenix: bank owned, sale, foreclosed)

[gregandvicky]

Has anyone ever been to one of these auctions? One is advertised in Phoenix next week with open houses at all 450 homes this weekend.

I was wondering if you can find a nice home to live in at a fair price, or if it is nothing but shills in the audience or if one would be bidding against investors.

I am simply looking for a home to live in, not to flip or rent.

In your opinion is it worth the time to drive hundreds of miles looking at homes I might want to live in and bid on, or a waste of time.

Thanks

[Gretchen B]

If this is an auction of properties which are currently bank owned, then you might be able to get a good deal. Be sure you check out the sale terms. Some important questions I'd want answered are: Is this Cash Only, or if you need financing do you have to have that lined up prior to the auction? Are you guaranteed a clean title on the house you buy? What kind of a deed will you receive?

Besides finding out the answers to those questions and others, your due diligence would include touring any house you'd bid on, possibly having a professional home inspector or contractor take a look at the house (it's doubtful you'd get any kind of an inspection period when purchasing a home at auction), thoroughly knowing the comps and market value of the homes in the immediate neighborhood of the home(s) you want to bid on. That way you'll know what a fair price is on that particular home and know when to stop bidding.

These are my initial thoughts - hope there are a few tips in there you can use. I have heard that you can sometimes get awesome deals at these auctions, but I think a person could also get burned if they don't know what they're doing or if the house has some sort of hidden defect (either with condition or with title).

Let us know how things go!

[azjack]

Those auctions are not absolute auctions, and therefore worthless IMO.

Why waste your time researching these places, registering, bidding, and winning - only to be told that you did not meet the bank's secret reserve price after the fact?

In the next couple of years, you will be seeing some real (absolute) auctions, just not yet.

[gregandvicky]

Originally Posted by azjack

Those auctions are not absolute auctions, and therefore worthless IMO.

Why waste your time researching these places, registering, bidding, and winning - only to be told that you did not meet the bank's secret reserve price after the fact?

In the next couple of years, you will be seeing some real (absolute) auctions, just not yet.

Thanks. I think I will hold off for now. I read the fine print in the brochure and all houses have minimums set but not disclosed, so the starting bid price means nothing. Sounds like a sham to me.
Good advice, I am going to wait for a real auction.

I have been back in Az for two months now and continue to see prices falling, increased builder incentives for pricing and incentives for financing.

In my price range I have seen new builds fall around $19,000 in two months on average for the three builders I am following, by specific subdivision and specific model.

Thank again AZJack

[azjack]

"In my price range I have seen new builds fall around $19,000 in two months on average for the three builders I am following, by specific subdivision and specific model."

See, you prevented a $19,000 net worth loss in a couple of months by not buying a declining asset. Essentially, $19,000 in untaxable "gains" (avoided losses) in a brief period of time. Awesome.

"Thank again AZJack"

You are welcome.

[yee4secretary]

How often are these REDC auctions? There is advertising for another one Nov 15, 16 2008.

[Azsmileym]

Hi,

You can find a good home at auctions. However, there some items you should know. The contracts they use are typically not the normal approved REALTOR contracts. Therefore, you have to do most of your inspections before you buy and your money goes hard at the time of placing a contract on the home or winning the bid.

I personally think you can do just as well buying a REO or foreclosed home. You get a great price, you have all the rights of an inspection period and keep your deposit.

Stephen

[gregandvicky]

Originally Posted by azjack

Those auctions are not absolute auctions, and therefore worthless IMO.

Why waste your time researching these places, registering, bidding, and winning - only to be told that you did not meet the bank's secret reserve price after the fact?

In the next couple of years, you will be seeing some real (absolute) auctions, just not yet.

You are saying that you could win the bid, even making sure you were careful to inspect the home etc. but after winning the bid you still didnt buy it?

Seems crooked not to disclose the reserve amount or, even easier to simply start the bidding at the reserve amount

[barryhussein]

Originally Posted by azjack

Those auctions are not absolute auctions, and therefore worthless IMO.

Why waste your time researching these places, registering, bidding, and winning - only to be told that you did not meet the bank's secret reserve price after the fact?

In the next couple of years, you will be seeing some real (absolute) auctions, just not yet.

Spot on Jack. Only go to absolute auctions. At REDC, only if there is "bidding hysteria" does the house actually get sold. There is one across the street from me, that has been "auctioned" twice"--still empty. Your better off negotiating with the bank. Don't forget about the buyer's premiums at these auctions. No way Jose.

[wendyadudek]

Where is the best place to start lookingfor absolute auctions?