Does Buying In A Live Auction Make Sense
January 20, 2011
At an auction held earlier today in Mountian View CA the following properties were auctioned:
- 453 N Rengstorff Ave #4, Mountain View CA 94043
- 38500 Paseo Padre Parkway #308, Fremont CA 94536
- 3300 Wolcott Common #212 Fremont, CA 94538
The Auction was held at the first property address but all three properties were auctioned.
Besides several guidelines, instructions, and disclosures the most important thing to know is that there is an additional 5% fee on the top of the winning bid (not including closing costs). It was also stated that the buyer cannot sell the property for more than 120% of the purchase price (winning bid) in the following 3 months.
My goals for these auctions were:
- Check the property, its condition, and the areacommunity.
- See how many people show up.
- See how low below market a property is sold at an auction.
I was only able to see the first property in the list. It looked just fine. Carpets were in ok shape. Kitchen seems relatively new. All seemed to be in order and in move-in condition, at least from the quick look I took.
About 30 people showed up to the auction. But it seemed only 5 or 6 actually got involved in the bidding.
453 N Rengstorff Ave #4, Mountain View CA
- $250,000 according to Trulia
- Winning bid: $156,000 + $7,800 (5%) = $163,800
- Trulia/Wining bid ratio: about 65%, i.e. 35% below estimated market value.
38500 Paseo Padre Parkway #308, Fremont CA
- $157,500 according to Trulia.
- Winning bid: $88,000 + $4,400 (5%) = $92,400
- Trulia/Wining bid ratio: about 60%, i.e. 40% below estimated market value.
3300 Wolcott Common #212 Fremont, CA
- $215,000 according to Trulia.
- Winning bid: $111,000 + $5,550 (5%) = $116,550
- Trulia/Wining bid ratio: about 55%, i.e. 45% below estimated market value.
I will let you be the judge of the auction’s success.