I promised a piece on the real estate auction almost two weeks ago, so here it is. Fact is, I’ve had a lot of time and a lot of conversations to help me digest my first real estate auction experience, and I’ve boiled it down to the three elements of the day that really surprised me.

1. This is the real deal. Insurable title, no back taxes or leins, five percent down and a 30 day cash contract. Serious investors making real deals on bank owned properties. And they’re deals - serious deals. I saw several homes, nice homes that you or I would live in, sell for 100 grand under their already reduced list prices. No joke.
2. Emotion wasn’t a factor. I really believed that the purpose of the real estate auction was to create the emotion or the frenzy that would drive competing bidders to pay more for a bank owned property than they would on the open market. But that’s not what I saw. I saw sophistocated investors who had researched and valued these properties and were bidding on them in a very business-like manner.
3. It’s just the tip of the iceberg. I saw about 200 homes get auctioned a week ago Sunday. They were all in the Sacramento area and they sold from $50,000 to over $350,000. It took six and a half hours and three different auctioneers working in non-stop twenty-minute shifts. It seemed huge at the time. Then I recollected some of the  historical numbers that are being thrown around regarding foreclosures and sub-prime loans. And I realized, this is only the beginning.

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This entry was posted on Wednesday, November 28th, 2007 at 5:53 am and is filed under Investing, Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.