Real Estate Auctions

Discussion in 'Real Estate' started by Spencer, Aug 3, 2006.

  1. Spencer

    Spencer Beach Lover

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    If the seller has a resonable sense of value of the property, then it's not usually a bad deal for the seller either.
     
  2. SHELLY

    SHELLY SoWal Insider

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    If the seller had a "reasonable sense of value" and applied that knowledge based on present market conditions (excessive inventory--very few buyers) when pricing their home for sale, they wouldn't need an auctioneer to sell their home.

    I believe folks who go to these auctions fall into 3 categories (1) People who are actually looking to buy a place at the cheapest price possible; (2) Late-night Infomerical Devotees who think they're on their way to making a killing in the real estate market, and (3) Owners of other properties and realtors from the surrounding area who are curious to see what's happening in town (and probably farming for potential buyers).

    Aside from the obvious need for an auction for the average joe selling a home (meaning they want to unload it quickly with no hassles), a lot of these folks selling their homes at auction today take the view that they are selling "fine and rare pieces of art" that are highly prized by many folks eager to out-bid each other at ever increasing prices...nothing could be further from the truth. People going to these auctions are looking for bargain-bin prices...meaning BELOW what properties sold for in the last couple of years.

    There may be an odd property that fetches a fairly decent price, but that will clearly be the exception and not the rule (and probably the example the auctioneer uses when he's pushing his services to potential clients).

    Too many sellers have not reached a sufficient level of financial pain to price their homes to market...and buyers (especially if they are investors) are not willing to catch a falling knife. With ever-increasing inventory hitting the market day-by-day and prices starting to show a tiny bit of softening, buyers are content to park their money in a CD and wait for the prices to come down to them.
     
  3. spinDrAtl

    spinDrAtl Beach Fanatic

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    The auction that I participated in by phone was heavily advertised. There were probably 100 or more bidders in the hotel where it was held and another 50+ on the phones (who were assigned a bidding rep on site).

    That market was in the dumps at the time and people definitely got steals, but it still may have been a good deal for the developer to finish up at the project and get his sales staff out of there, etc.

    I just remember at the end there were a few units left and there was a rock bottom price set but the auctioneer was basically saying 'Anyone who wants one of these just come up to the front and sign for the minimum'. I wish I would have bought a few more units but just couldn't pull it off at the time.
     
  4. Mango

    Mango SoWal Insider

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    I went to an auction as the house mortgage broker in N.Y. about 10 years ago. The people who came in for the auction were not suits, they had cash, and at that time, some properties were a steal. I had an auctioneer stay at my place early spring from TN, and he said auctions were how properties were sold in some Sotuhern States even before they were listed with realtors. Is this true?
    he said he went to an auction in Destin, and was going to be coming back to look for property soon, and I imagine there may be a few deals here and there.
     
  5. Bobby J

    Bobby J Beach Fanatic

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    I was told by John Roebuck that auctions work best in a sellers market. In a buyers market, especially like in South Walton sales at auctions are down. In a sellers market buyers really get in a bidding war. Right now the buyers just walk if they do not get the property at what they think is a steal. It could have gotten real crazy if we would have sold some of our listings last year at auctions!!! If the auction is not "absolute" I would not waste my time going.
     
  6. SHELLY

    SHELLY SoWal Insider

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    ...don't you actually have to have "buyers" to call it a "buyer's market?" :confused:

    Someone told me yesterday, "Look, I've got the money in the bank...it doesn't matter what the Realtors are saying--it's not a "buyer's" market until those of us with the cash say it is....and we're still not there yet."

    I can dig it.
     
  7. Just_In_Thyme

    Just_In_Thyme Beach Lover

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    Give him some credit Mark he is working on a thesis
     
  8. InletBchDweller

    InletBchDweller SoWal Insider

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    OHHHHHH so you know that Shelly is a HE?????
     
  9. Bobby J

    Bobby J Beach Fanatic

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    Shelly,
    There are two types of markets. Buyers and Sellers markets. A year ago the seller dictated the transaction. Today, a buyer rules. It is merely a term. BTW, I have closed 3 cash transaction in the past two weeks. Tell your friend don't stand around waiting too long. His realtor could be on to something. I have made allot of money while people stand around and analyze. We call it paralysis by analysis!!!!! :confused:
     
  10. Babyblue

    Babyblue Beach Fanatic

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    I held a auction at cafe-30-A. Great turn out. Good food and a fun time by all except the sellers! :funn:
     
  11. Diane4145

    Diane4145 Beach Fanatic

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    Bobby J,

    I'd appreciate a large loan, with a very low interest rate and in all large bills...please!;-)
     
  12. SHELLY

    SHELLY SoWal Insider

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    It doesn't surprise me that a few places are selling, since we are still in what is normally considered the "buying" season in these parts (although you wouldn't know it with all the inventory on the books that's not moving).

    There are lots of folks out there holding RE now that are kicking themselves in the arse because they used the "Ready, Fire, Aim" real estate investment system. Many of them (but not all) listened to agents who told THEM last year was the right time to buy too.....I don't blame the agents, that's how they make their money...with that in mind, I certainly wouldn't take an agent's view of the market as gospel....because that's how they make their money (that's not how they would make me money.)

    If you've already got a house to live in, all other real estate is discretionary. Maybe someone who takes their time analyzing a situation that seems "too good to be true" may miss a chance to end up rolling in dough (as you certainly must be by now), but they also aren't stuck with 3 pre-construction condos, $60,000 out of pocket, a HELOC on their primary residence, and a notice that all 3 are closing by the end of August. :shock: (Remember, they're not making anymore sky!)

    Tulips, Dot-Coms, Tech Stocks, Beanie Babies, Real Estate......what's the next "anyone can get rich quick with no downside risk" investment? That's the mentality that fueled the run-up in the real estate market during the last couple of years--it topped off last summer and now will take several years to unwind, so there's no need to rush out in the next couple of months to buy...there will be plenty of better buys available on the way down.
     
  13. andipandi

    andipandi Beach Comber

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    I do not really think it is funny for owners to have to sell their property at a loss. I suppose folks who take delight in this never think it could never be them. You never know what can happen in life.

    A lot of people who bought in the last 2 yrs are really hurting. Does anyone have anything helpful to say to us????? Please if you are going to be mean spirited or insulting --DON"T!
     
  14. SHELLY

    SHELLY SoWal Insider

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    I'm sorry you made a bad investment decision...usually people who've walked in those shoes--if they've learned a lesson (every investor loses sometime)--take a more cynical view of all the "hype" surrounding the latest and greatest way to make tons of money without breaking a sweat.

    There are lots of folks out there still under the impression that real estate investing is riskless and has no downside. The comeback always goes something like this: "Real estate is better than the stock market--you can't live in stock certificates; real estate has NEVER lost value in the history of man; or, if I can't sell it I can always rent it out to cover my expenses."

    Believe me, I'm well aware that losing money on an investment isn't a picnic--but if you had it to do all over again, would you have made the same investment decision? If so, then you should be fine with your present situation. But if you would not, what would have made you decide against it? Didn't your financial advisor, realtor or banker advise you about the downside risk of investing in real estate?

    You've obviously come to the realization that your investment isn't meeting your expectations, so now you've gotta step up to the plate and deal with it...when it comes to investing it's a game of "Risk and Reward," you can't have one without the other. Investors are one thing, but there are many, many people who are going to lose their primary residences as a result of this RE money grab--my heart goes out to the naive and defrauded among them.

    There are others on the board who believe that what we are experiencing is a temporary lull in real estate and the market will come roaring back "bigger and better than ever before" next Spring if you can just hang on...if that is "helpful" for you, then believe them, maybe they could be right--but you can't take "feel good chit-chat" to the bank....I'd do some REAL number crunching in the interim.
     
  15. TooFarTampa

    TooFarTampa SoWal Insider

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    Though SHELLY often appears to be mocking those who have made a miscalculated investment, I agree with the sound economic advice above. I will add, andipandi, that if you are an END USER (ie SoWal is a place you want to be in the mid to long term) and you can truly afford your purchase, try not to worry much about it. That is easier said than done, certainly, but at some point, assuming you do not need to sell, the market will recover and even continue strengthening. But there seem to be too many variables for anyone to reasonably predict when that may be. Meantime, enjoy your purchase, because with a place in SoWal, that is one thing you can surely do. ;-)
     
  16. Amp22

    Amp22 Beach Fanatic

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    Shelly - there are plenty here who made good, even great gains by investing in the "next hot thing" when it was SoWal. We are the ones who think you are cruel and rubbing it in to the less fortunate.

    There are plenty here who were not so fortunate and might take losses. They are the ones who think you are cruel and rubbing it in their face.

    I suspect you hang around, even after resigning from this forum once, because all the sunny people on this forum drive you insane. You long ago passed from the "I told you so" phase to the "just plain ugly and cruel" phase. Give it a rest before you get visited by 3 ghosts and end up in H E double toothpicks.
     
  17. SHELLY

    SHELLY SoWal Insider

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    Not really--my priest insisted that I give something up for lent so I wouldn't go to H-E-double-toothpick. I had to make a choice between giving up posting on the RE forum and pulling wings off of flies... ;-)

    P.S. In my case, insanity is more of a long putt than a drive.<rimshot> :D
     
  18. Unplugged

    Unplugged Beach Fanatic

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    Agreed TFT - I find SHELLY's comments enlightening and I try not to take them personally.
    ___________________________________
     
  19. sberry123

    sberry123 Beach Comber

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    Shelly's insights may have helped many people in terms of realestate investing by giving a different view point. Who knows what the market is going to do, if I knew, I would be a billionaire. He/She does have a right to boast since she predicted this way back when and he/she took the beating on the forum from the naysayers.
     
  20. andipandi

    andipandi Beach Comber

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    Shelly you did predict this. I agreed with you as I watched the daily sale, pending and sold listings--but it was too late for us. I had watched south walton property soar for 10 yrs. I do not even understand the numbers that SJ is kind enough to post. I am a novice and did make a bad investment sadly as it turns out. My husband and I are not risk takers we have never even put $20 in a slot machine or gambled. I think I have bought 5 lotto tickets in my life. We have worked in health care our entire life. We hoped to retire soon. We are much better at taking care of the sick than investing obviously.
    What makes me so sad is I talked my husband into this. As hard as I work, he works even harder. I love south walton:wub: and based this venture more on love than finanical advise. We are not able to travel there due to illness and work as much as we would like.
    I am serious about any creative thoughts anyone would be so kind to share about what folks are doing who have a home they need to sell with an interest only loan(Please do not kick me --down already--got it dumb dumb dumb). It has not sold at $100K loss and it is not overpriced. We will work two jobs before we give it away. if we had flipped it immediately , we would have made a profit. But no we had to wait a year!!!

    Here are some things I have considered:
    Sell our primary home and live in a tent.:eek:

    Move the house from South Walton to our hometown and sell our primary . I guess the bank would not like that since we have a 300% mortgage now.

    Or if everyone on the board and all the realtors, investors would go buy one piece of property in the area to reduce the inventory the market would improve.
    As you can see my best thinking got me here.
     

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