Anyone ever heard of REDC? (online auctions for bank owned real estate) (cheapest, foreclosed)

[rubytue]

Foreclosed Homes, Condos, Commercial Real Estate, Foreclosure Property, Note and Loan Sales, Short Sales, Land Auctions and More... (http://www.auction.com/residential-auction - broken link)

I am intrigued. There is a bank owned house I have had saved on my redfin favorites, just to watch for awhile and track the market (its in one of my two ideal neighborhoods ). DOMP is 183. The MLS price is $525k; its listed on this site with an opening bid of $250k.

We could likely qualify for $250k-$300k right now, even given our current mortgage (we like to buy way below our max) and second home rates. Heck, we could probably come up with that in cash if we sweet talked our parents and used all our cash. It needs lots of work, but thats not an issue (husband in the trades). From the pictures I've seen (not MLS, another website), it appears to be livable until we could cash out this house and do the work it needs.

Anyway, I know what they say... if it sounds to good to be true then it probably is. But man... if I could get that house for $300k (and its structurally sound and water tight - thats our only requirement) I would be jumping for joy.

[MikeJaquish]

Check out if it is an absolute auction.
I suspect not.

I think you will find that the auction price must be approved by the bank.
All you get by being top bidder is a bank review of the offered price.

[rubytue]

Thats a good point, one that I thought of on my way home from the show we just went to. And I'm not totally crazy, I know there is a slim to none chance I could actually get it for that price. But a girl can dream LOL

[adolpho]

Buyer's will pay a 10% buyers premium at REDC. Avoid, Avoid, Avoid! 95%+ of there auctioned homes do not close. When the come back on the regular market, just factor in what the highest bid was. I saved several thousand doing this. Used it against them. "It's obviously only worth this much if the highest bid was this......." Greedy people trying to start a bidding war.

[rubytue]

Originally Posted by adolpho

Buyer's will pay a 10% buyers premium at REDC. Avoid, Avoid, Avoid! 95%+ of there auctioned homes do not close. When the come back on the regular market, just factor in what the highest bid was. I saved several thousand doing this. Used it against them. "It's obviously only worth this much if the highest bid was this......." Greedy people trying to start a bidding war.

Thanks! Thats a good strategy The site says its only 5% buyer's premium, but still. And I did confirm there is a reserve.

[Narfcake]

I was at one of the ones they had here in SoCal last year ... it wasn't worth it.

I had my hand up for all of about .2 seconds for a house that was a block from where I used to live. $119k to start, the area comped out to $350k. Sounds good, right?

Outside, the property did look pretty good. The previous owners had all of the windows replaced, and the exterior was repainted by the HOA just 2 months prior. Except for the tall grass and the garage door, it had good curb appeal.

Inside, OTOH, was a giant mess. We're talking all original 1975 - kitchen, bathrooms, even the carpet. There were active plumbing leaks (lower level flooring was soggy wet during the open house), damaged 2nd floor subfloors, visible mold, and a roof leak because of the ceiling stains. There were walls that had to be replaced, and the cracked swimming pool was a major liability.

I was targeting $200k for all the work needed. After a couple rounds, two parties got into a bidding war and the hammer dropped at $330k!

I doubt either party was there for the open house ... and prolly upon further inspection, the "winning buyer" forfeiting the 5% deposit was the cheapest way out. Three weeks later, it was on the MLS ... at $329,900. Convenient, isn't it? Ultimately, it sat for six more months, and some one actually bought it at $320k. Sure enough, many contractors and 3 giant dumpsters later, the buyers were actually moved in. How much they spent, I dunno, but IMHO, they would've been better off if they had just spent more on a better house to begin with.

With a REO or short sale, you're able to do some negotiations. There are none when it comes to auctions. Are there deals with such auctions? Yes. Is it worth the limitations, where the contract is pretty much one-sided and everything is absolutely AS-IS, even the legal aspects? Not likely for a regular homebuyer.

[adolpho]

All true. You have even less rights than when you just sign away all of your rights as an REO buyer, and this includes the inspection period. The forfeiture money is their holy grail.