Submitted by SD Realtor on September 1, 2009 - 8:48pm.
You beat foreclosureforum to the punch. They usually do not post the monthly update until about the 8th day of the month.
One curiosity I have is that I would like to study the raw data. Do you obtain a list of all the properties or do you just take the totals that that they post?
Do you think the increase in 3rd party sales this years (vs banks) is because the banks started lowering the opening bid to a price that makes the property potentially profitable?
I remember reading (here and elsewhere) that last year the banks were setting the opening bids higher than the value of the house - so there were no bids.
Submitted by SD Realtor on September 2, 2009 - 1:09pm.
My guess is simply that the auctions are much more attended now. Last week there had to be at least 60 people downtown. Also I am noting that there are alot more bidders willing to take alot less margin. That is, at least by my study, they are making bids on places where they may only clear 10% after a resale as opposed to 20% or more.
For instance today the property on Orange Blossom in Encinitas had an opening bid of 620k? WTF... not much margin on that...
So in a nutshell I am not convinced that the opening bids have changed that much. Just a guess though.
You beat foreclosureforum to the punch. They usually do not post the monthly update until about the 8th day of the month.
One curiosity I have is that I would like to study the raw data. Do you obtain a list of all the properties or do you just take the totals that that they post?
I dont download all the properties, they have a limit to the numbers you can download so I just do raw totals. I do downloads for looking in specific areas though.
Do you think the increase in 3rd party sales this years (vs banks) is because the banks started lowering the opening bid to a price that makes the property potentially profitable?
I remember reading (here and elsewhere) that last year the banks were setting the opening bids higher than the value of the house - so there were no bids.
I dont believe bids have changed much I think what you see as far as third party participation is a reflection of the strength of the market on the low end and the limited inventory. Once prices firmed up a bit it is much easier for people to zero in on values and therefore make bids. I think in some areas the investors are overdoing it (OC) but I really dont know the area well so I could be very wrong.
With good enough data (knowing the servicer and who owns the loan) you can basically ballpark the opening bid pretty well. Some servicer+investor combos set opening bid at what is owed (not too common), others set it at market value (pretty common) and others still set it at market value minus some fixed percentage.
The investor activity is mainly concentrated in the last category with the second category getting action when there is a bad BPO and price comes in low.
Submitted by recordsclerk on September 3, 2009 - 9:31am.
"With good enough data (knowing the servicer and who owns the loan) you can basically ballpark the opening bid pretty well. Some servicer+investor combos set opening bid at what is owed (not too common), others set it at market value (pretty common) and others still set it at market value minus some fixed percentage."
Submitted by recordsclerk on September 3, 2009 - 2:51pm.
I currently have foreclosureradar. I was wondering if you can actually guess the opening bid based on the servicer/bank? It seems all over the place to me, but that would be good info if the combo can produce some educated guesses for opening bids. Also, when referring to the servicer, is that the Trustee? All the 3rd party sales for today at El Cajon Court were done by Cal-Western Reconveyance Corp.
Submitted by SD Realtor on September 3, 2009 - 3:41pm.
It is kind of hit and miss in my opinion. I am not an expert on how the opening bid is determined but for sure it will in part depend on the BPO/Appraisal that is ordered by the asset disposition company. Obviously the other part will be what is owed on the property as well. So it is more of an art then science. Honestly it is alot like the overall housing market now. Look, when we first were in the downward spiral remember how we all used to complain about sellers in denial and not pricing the home correctly? Well now we have a much bigger problem which is buyers going gonzo and multiple offers, and a trip back in time to 2004... So I am witnessing the same fun and games... Look... a home in Mira Mesa went today on Penrod. Not a bad place but it went for 359k!!!
Think about that okay? Back out commissions and closing costs.. maybe if you are hell of lucky you get 400k for the place and that is a stretch... (although in the crazy town that is MM today maybe you get that) but back out say 4% and you are at 384k right? So 25k profit... less the 10%! After Uncle Obama and aunt Arnold get through with you it is piddle...
So that has an "okay" opening bid of like 326k...
Anyways it is what it is records... alot of work and don't sweat the opening bid...sweat the competition because the guys at these things are good... and the dodos at these things are the ones that will cost you thousands... I can 100% promise you that any good opening bid will get run up.
As far as the servicer, no the servicer is who basically services the loan for the beneficiary. The trustee is who basically holds the deed of trust and is authorized to auction it off at a public auction at the conclusion of the foreclosure process. The guys at the actual auctions (the guy actually auctioning the property) may represent 1 or more trustees.
Submitted by recordsclerk on September 3, 2009 - 9:07pm.
Although the openning bid does not automatically give you a good chance at getting a good price, it does help eliminate properties from your potential list of properties for purchase. There is a lot of research that I go through with each property just to have the opening bid be too high. It would be nice to only target properties that have a good opening bid. There are enough postponed properties to waste my time already. The bidding is getting out of hand and the margins are getting smaller by the day. Just last month a property that was on my potential buy list had an opening bid of 90K and was bidded up to 170K. That was 10k over what we wanted to pay and would sell for about 220k. Looking back at the sale, the margin seems to be a lot better then what has been selling lately.
I also saw that home in Mira Mesa for 359k. I don't see how anyone will make money on that property.
Submitted by SD Realtor on September 3, 2009 - 9:19pm.
Yep... well all I can say is welcome to the show. Most of the time if the opening bid is posted the previous day, those properties get killed. Given todays numbers it actually is better if the opening bid is not posted until after 10 am, which helps catch people off gaurd. The real experts have an operation of a guy at the trustee sale, one or two guys on the road looking at the properties, then someone at a computer communicating real time with the person at auction.
The case you mentioned where a 220k property sold for 170k is still over 20%. Not bad. If you get 20% today on a flip count your lucky stars.
I'm uncomfortable with doing so for various reasons. Also when I said servicer, I meant trustee (many servicers use the same trustee and I brain farted).
But I will say I have done the analysis using foreclosureradar and if you have an account all the information is there at your disposal. You have the trustee and the lender and can see which combinations get the most third party sales.. That will tell you who is pricing under market (with a bit of market knowledge, you can figure out by how much..). You have the ones that don't get a lot of 3rd party sales and those are probably the middle group who price at market value or whatever is owed, whichever is less and those 3rd party sales are either a bad BPO or a low first lien amount. And then you have certain combinations which basically get zero 3rd party sales.
While I think it is tough to pin down when any one property will come up for bid (postponements and all that), I think it is possible to ballpark the opening bid quite well.
You beat foreclosureforum to the punch. They usually do not post the monthly update until about the 8th day of the month.
One curiosity I have is that I would like to study the raw data. Do you obtain a list of all the properties or do you just take the totals that that they post?
Do you think the increase in 3rd party sales this years (vs banks) is because the banks started lowering the opening bid to a price that makes the property potentially profitable?
I remember reading (here and elsewhere) that last year the banks were setting the opening bids higher than the value of the house - so there were no bids.
My guess is simply that the auctions are much more attended now. Last week there had to be at least 60 people downtown. Also I am noting that there are alot more bidders willing to take alot less margin. That is, at least by my study, they are making bids on places where they may only clear 10% after a resale as opposed to 20% or more.
For instance today the property on Orange Blossom in Encinitas had an opening bid of 620k? WTF... not much margin on that...
So in a nutshell I am not convinced that the opening bids have changed that much. Just a guess though.
One curiosity I have is that I would like to study the raw data. Do you obtain a list of all the properties or do you just take the totals that that they post?
I dont download all the properties, they have a limit to the numbers you can download so I just do raw totals. I do downloads for looking in specific areas though.
I remember reading (here and elsewhere) that last year the banks were setting the opening bids higher than the value of the house - so there were no bids.
I dont believe bids have changed much I think what you see as far as third party participation is a reflection of the strength of the market on the low end and the limited inventory. Once prices firmed up a bit it is much easier for people to zero in on values and therefore make bids. I think in some areas the investors are overdoing it (OC) but I really dont know the area well so I could be very wrong.
With good enough data (knowing the servicer and who owns the loan) you can basically ballpark the opening bid pretty well. Some servicer+investor combos set opening bid at what is owed (not too common), others set it at market value (pretty common) and others still set it at market value minus some fixed percentage.
The investor activity is mainly concentrated in the last category with the second category getting action when there is a bad BPO and price comes in low.
"With good enough data (knowing the servicer and who owns the loan) you can basically ballpark the opening bid pretty well. Some servicer+investor combos set opening bid at what is owed (not too common), others set it at market value (pretty common) and others still set it at market value minus some fixed percentage."
You should provide this info on your blog.
You can get an acct with countyrecordsresearch.com as well.
I currently have foreclosureradar. I was wondering if you can actually guess the opening bid based on the servicer/bank? It seems all over the place to me, but that would be good info if the combo can produce some educated guesses for opening bids. Also, when referring to the servicer, is that the Trustee? All the 3rd party sales for today at El Cajon Court were done by Cal-Western Reconveyance Corp.
It is kind of hit and miss in my opinion. I am not an expert on how the opening bid is determined but for sure it will in part depend on the BPO/Appraisal that is ordered by the asset disposition company. Obviously the other part will be what is owed on the property as well. So it is more of an art then science. Honestly it is alot like the overall housing market now. Look, when we first were in the downward spiral remember how we all used to complain about sellers in denial and not pricing the home correctly? Well now we have a much bigger problem which is buyers going gonzo and multiple offers, and a trip back in time to 2004... So I am witnessing the same fun and games... Look... a home in Mira Mesa went today on Penrod. Not a bad place but it went for 359k!!!
Think about that okay? Back out commissions and closing costs.. maybe if you are hell of lucky you get 400k for the place and that is a stretch... (although in the crazy town that is MM today maybe you get that) but back out say 4% and you are at 384k right? So 25k profit... less the 10%! After Uncle Obama and aunt Arnold get through with you it is piddle...
So that has an "okay" opening bid of like 326k...
Anyways it is what it is records... alot of work and don't sweat the opening bid...sweat the competition because the guys at these things are good... and the dodos at these things are the ones that will cost you thousands... I can 100% promise you that any good opening bid will get run up.
As far as the servicer, no the servicer is who basically services the loan for the beneficiary. The trustee is who basically holds the deed of trust and is authorized to auction it off at a public auction at the conclusion of the foreclosure process. The guys at the actual auctions (the guy actually auctioning the property) may represent 1 or more trustees.
Although the openning bid does not automatically give you a good chance at getting a good price, it does help eliminate properties from your potential list of properties for purchase. There is a lot of research that I go through with each property just to have the opening bid be too high. It would be nice to only target properties that have a good opening bid. There are enough postponed properties to waste my time already. The bidding is getting out of hand and the margins are getting smaller by the day. Just last month a property that was on my potential buy list had an opening bid of 90K and was bidded up to 170K. That was 10k over what we wanted to pay and would sell for about 220k. Looking back at the sale, the margin seems to be a lot better then what has been selling lately.
I also saw that home in Mira Mesa for 359k. I don't see how anyone will make money on that property.
Yep... well all I can say is welcome to the show. Most of the time if the opening bid is posted the previous day, those properties get killed. Given todays numbers it actually is better if the opening bid is not posted until after 10 am, which helps catch people off gaurd. The real experts have an operation of a guy at the trustee sale, one or two guys on the road looking at the properties, then someone at a computer communicating real time with the person at auction.
The case you mentioned where a 220k property sold for 170k is still over 20%. Not bad. If you get 20% today on a flip count your lucky stars.
http://sdhpi.blogspot.com/2009/08/on-sha...
You should provide this info on your blog.
I'm uncomfortable with doing so for various reasons. Also when I said servicer, I meant trustee (many servicers use the same trustee and I brain farted).
But I will say I have done the analysis using foreclosureradar and if you have an account all the information is there at your disposal. You have the trustee and the lender and can see which combinations get the most third party sales.. That will tell you who is pricing under market (with a bit of market knowledge, you can figure out by how much..). You have the ones that don't get a lot of 3rd party sales and those are probably the middle group who price at market value or whatever is owed, whichever is less and those 3rd party sales are either a bad BPO or a low first lien amount. And then you have certain combinations which basically get zero 3rd party sales.
While I think it is tough to pin down when any one property will come up for bid (postponements and all that), I think it is possible to ballpark the opening bid quite well.
Effective Demand,
Thank you for the info. I will study a few auction days and see if I can get any info from the data.