CHESSNOID

I went to the foreclosure auction this weekend with the intent to buy a foreclosure to live in.  I actually checked out the homes physically before hand and was hoping to get a smoking deal.   The overall experience was boring because you have to wait for your auctions to bid on which takes a couple of hours. However, it is exciting when they finally get to your auction.  For some strange reason, many people who won the auctions earlier would not qualify and the properties were re-auctioned a 2nd and even a 3rd time.  We didn’t stay for the whole event, but it wouldn’t surprise me if some of the previously won properties came back up for a 4th or 5th time.

When I went to the convention center, the parking lots were packed.  We had to park pretty far away and walk to the center. Judging by the full parking lots I thought “everyone and his brother is here”.  Once inside there were a good number of people but there were multiple events happening inside. I think in the room we were in there may have been 1,500-2,500 people.  Everyone was looking for deals and I suspect there were many professional real estate investors there since some people won multiple properties.

There were definitely good deals to be had.  Most properties went for about 35-50% of the defaulted loan amounts or off its highest asking price. The 2 properties we were going to bid on actually did well and sold close to the MLS prices before auction (which were already 50% off their market highs).  I think we waited close to 3 hours for our auction to come up and I was nervous knowing our chance was coming up.  Then it was over in 2 minutes. We were outbid before we could even bid.  We were disappointed we didn’t win, but these things happen for a reason.

These auctions are now coming up every 3 months or so in Southern California.  This was the first time I attended.  I will probably try again in 3 months and there will be many more chances.  The only negative thing I didn’t like is that the seller (bank) could bid on the properties too.  This is what I think drove some properties up to unusual levels.  Most people probably didn’t know this, but it is in the written disclosure they put out.  On eBay this would be considered shill bidding and could get you banned from the site.  In this case, it is perfectly legal but seems shady. My wife kept telling me that some of those 2nd and 3rd chance auctions that came back up from “confused buyers” were probably the investor (banks) trying to make sure they sold for a certain amount.  There were quite a few that kept coming back which seemed to be about 1 out of every 3 or 4 properties.  Still, I think personally think everyone who did win and buy property there did get a good deal.