Home Auction

[kyle t]

Been reading this site for a while, so I figured why not post a little something.
OK, my situation: My wife and I are currently renting in Temecula. We are looking into buying our first home soon in Murrieta between the 15 and 215 would be perfect. Nothing crazy, just a good first home, something like 1900 sq. ft. or less. Our apartment lease is ending in Nov., so we would love to buy something soon and make the seamless transition into a home. We are strongly considering buying something at the US Home Auction (ushomeauction.com) coming up. But after spending time on this site for the past few weeks, I feel like it would be smarter to drive down Murrieta Hot Springs throwing $100 bills out the window then buy anything now. Does anyone know anything about the US Home Auction? Is it a good place to find deals on homes? Or would we be better off living the dream life in our 650 sq. ft. apartment for 6/12 months than buying ANYTHING right now??? Any feedback would be awesome. Stay Classy.

[mydogsarelazy]

I know nothing about ushomeauctions, but I do live quite close to the one story listed on Lincoln, starting bid of $189,000.00

That is quite a nice home, and if you have kids the local schools are excellent.
I don’t see why you shouldn’t attend the auction and keep your bid card up into the high $200k zone.

JS

[mydogsarelazy]

I know nothing about ushomeauctions, but I do live quite close to the one story listed on Lincoln, starting bid of $189,000.00

That is quite a nice home, and if you have kids the local schools are excellent.
I don’t see why you shouldn’t attend the auction and keep your bid card up into the high $200k zone.

JS

[SD Realtor]

I helped somebody get OUT of a deal that they bought from REDC (ushomeauction) because they did not due as much diligence on the home they ended up buying at auction. My assistance was informal but after enough kicking and whining they did get their deposit back.

Actually some of those starting bids do not seem to bad. Whether that is what they will go for at auction is questionable. It would not hurt for you to check the auction out at the very least. Additionally if you are serious go to the auction site, pick the homes you want, drive out to the homes, and kick the tires… If you are really serious get ALL OF YOUR DILIGENCE DONE BEFORE the auction. If you are not sure what that diligence is, then call a local Realtor in Temecula or Murrieta and ask them to help you out and represent them. I believe that REDC will pay them a small commission.

The point is this… Yes it “appears” that if some of these homes actually do go for the starting bids then you may indeed do pretty well. Again though, I CANNOT STRESS how important it is for you to do ALL of your diligence before hand… inspections of all types, termite inspection, natural hazard and zone disclosure report, title check… Just get it done… You never know… you may do quite well… At least go to the auction and get a feel for it so when there is another one, AND THERE WILL BE… you will be used to the process..

Don’t forget that there is a 5% commission added on to the winning bid. Also make sure your financing selection is ALL COMPLETED before the auction.

Going to the auction is the easy part… getting serious and getting all the work done before hand is the hard part. It can be a great deal if you do all the work correctly.

SD Realtor

[SD Realtor]

I helped somebody get OUT of a deal that they bought from REDC (ushomeauction) because they did not due as much diligence on the home they ended up buying at auction. My assistance was informal but after enough kicking and whining they did get their deposit back.

Actually some of those starting bids do not seem to bad. Whether that is what they will go for at auction is questionable. It would not hurt for you to check the auction out at the very least. Additionally if you are serious go to the auction site, pick the homes you want, drive out to the homes, and kick the tires… If you are really serious get ALL OF YOUR DILIGENCE DONE BEFORE the auction. If you are not sure what that diligence is, then call a local Realtor in Temecula or Murrieta and ask them to help you out and represent them. I believe that REDC will pay them a small commission.

The point is this… Yes it “appears” that if some of these homes actually do go for the starting bids then you may indeed do pretty well. Again though, I CANNOT STRESS how important it is for you to do ALL of your diligence before hand… inspections of all types, termite inspection, natural hazard and zone disclosure report, title check… Just get it done… You never know… you may do quite well… At least go to the auction and get a feel for it so when there is another one, AND THERE WILL BE… you will be used to the process..

Don’t forget that there is a 5% commission added on to the winning bid. Also make sure your financing selection is ALL COMPLETED before the auction.

Going to the auction is the easy part… getting serious and getting all the work done before hand is the hard part. It can be a great deal if you do all the work correctly.

SD Realtor

[kyle t]

mydogsarelazy- We looked at the Lincoln house and loved it. It’s probably a little too much house than we are looking for right now, but if the bidding stays low enough, who knows.

SD Realtor- Thanks for the great advice. Due diligence, I will find out what that entails and get it done. We actually went to the last REDC auction a few months ago, and there seemed to be some real good deals. A 1400 3 Bed 2 Bath in Murrieta went for 217k, and a 1900 4 bed 2 bath went for 250, plus the 5%. Seemed like good deals to me. If all else fails, I guess I’ll just wait a few more months, and there is sure to be another auction.

[gn]

Kyle,

Given how bad things are in Murieta & that things will get a lot worse, a 1900 sq ft house should be worth less than $200k (a lot less, maybe closer to $150k).

You may think I’m crazy for saying that. But 2 years ago, most people thought it would be crazy to think that a 3000 sq ft house is worth less than $300k. See this thread:

http://piggington.com/half_price_mcmansion_in_92563

[gn]

Kyle,

Given how bad things are in Murieta & that things will get a lot worse, a 1900 sq ft house should be worth less than $200k (a lot less, maybe closer to $150k).

You may think I’m crazy for saying that. But 2 years ago, most people thought it would be crazy to think that a 3000 sq ft house is worth less than $300k. See this thread:

http://piggington.com/half_price_mcmansion_in_92563

[kyle t]

mydogsarelazy- We looked at the Lincoln house and loved it. It’s probably a little too much house than we are looking for right now, but if the bidding stays low enough, who knows.

SD Realtor- Thanks for the great advice. Due diligence, I will find out what that entails and get it done. We actually went to the last REDC auction a few months ago, and there seemed to be some real good deals. A 1400 3 Bed 2 Bath in Murrieta went for 217k, and a 1900 4 bed 2 bath went for 250, plus the 5%. Seemed like good deals to me. If all else fails, I guess I’ll just wait a few more months, and there is sure to be another auction.

[bubba99]

Can’t speak specifically to US Auctions, but others in the industry have a terrible reputation. Some use shills to up the bidding where necessary (not illegal, just sleazy) and the final bid is subject to acceptance by the owner (usually the bank).

Dozens of stories about people way over bidding on foreclosed property at these auctions. Be careful.

Bubba

[bubba99]

Can’t speak specifically to US Auctions, but others in the industry have a terrible reputation. Some use shills to up the bidding where necessary (not illegal, just sleazy) and the final bid is subject to acceptance by the owner (usually the bank).

Dozens of stories about people way over bidding on foreclosed property at these auctions. Be careful.

Bubba

[kyle t]

Hmmmm, The more I think about it, the more I realize that nothing could be lost by playing the waiting game a little longer. Well…maybe a wife that is pissed off that we are still toughing out this cramped little apartment! Maybe I should think about buying just to avoid that. Really, who can put a price on that kind of peace??????

[patientlywaiting]

I agree with gn, price are headed much lower.

Don’t buy anything now. What’s stopping you from renting a nicer place, like a townhouse or a SFR? Why do you have to stay in a 650sf apartment?

Don’t buy anything until some banks and developers start going under. Corus Bank for example lent to condo developers and they are not at risk.

Looking at houses now will only pressure both of you to buy and the emotions of owning will cause bad decisions. Don’t catch the falling knife!!

And grow some balls! Don’t let wifey whine her way into an overpriced house.

[kyle t]

RE: Grow some balls!

HA, nicely said man, nicely said.

[kyle t]

RE: Grow some balls!

HA, nicely said man, nicely said.

[patientlywaiting]

I agree with gn, price are headed much lower.

Don’t buy anything now. What’s stopping you from renting a nicer place, like a townhouse or a SFR? Why do you have to stay in a 650sf apartment?

Don’t buy anything until some banks and developers start going under. Corus Bank for example lent to condo developers and they are not at risk.

Looking at houses now will only pressure both of you to buy and the emotions of owning will cause bad decisions. Don’t catch the falling knife!!

And grow some balls! Don’t let wifey whine her way into an overpriced house.

[SD Realtor]

Waiting longer will enable you to get a much better deal, especially out there.

SD Realtor

ps – Kyle as a very useful exercise I would advise you to pick a few of the homes from the auction site that you like, then go visit them… check out the condition, you don’t need to hire an inspector but check them out, just to get a feel for them. Then go to the auction to see what these homes actually go for in relation to the original asking price. That way you can gauge what the reality is for the asking prices verses the selling price. Don’t forget the 5% commission.

[bsrsharma]

If you are ready for hard work, this algorithm might work:

1. Visit every home on auction list that fulfills your need.

2. Do Due Diligence on them.

3. Just bid the starting bid (on an acceptable home) and keep quiet. This requires a lot of self discipline.

My guess is, eventually you should win one at starting bid.

[Bugs]

The more time and effort you spend on looking at these properties the better your instincts will get on them.

However good some of these deals may look right now, I’m pretty sure that they’ll look a lot better a year from now. Just keep in mind that $50,000 saved on a purchase price is about $115,000 saved over the life of a mortgage. That’s a lot of money.

[Bugs]

The more time and effort you spend on looking at these properties the better your instincts will get on them.

However good some of these deals may look right now, I’m pretty sure that they’ll look a lot better a year from now. Just keep in mind that $50,000 saved on a purchase price is about $115,000 saved over the life of a mortgage. That’s a lot of money.

[bsrsharma]

If you are ready for hard work, this algorithm might work:

1. Visit every home on auction list that fulfills your need.

2. Do Due Diligence on them.

3. Just bid the starting bid (on an acceptable home) and keep quiet. This requires a lot of self discipline.

My guess is, eventually you should win one at starting bid.

[SD Realtor]

Waiting longer will enable you to get a much better deal, especially out there.

SD Realtor

ps – Kyle as a very useful exercise I would advise you to pick a few of the homes from the auction site that you like, then go visit them… check out the condition, you don’t need to hire an inspector but check them out, just to get a feel for them. Then go to the auction to see what these homes actually go for in relation to the original asking price. That way you can gauge what the reality is for the asking prices verses the selling price. Don’t forget the 5% commission.

[gn]

Well…maybe a wife that is pissed off that we are still toughing out this cramped little apartment! Maybe I should think about buying just to avoid that.

In 2005, when we were looking for a rental to "wait out the correction", my wife said: "since renting is just a temporary situation, why don't we rent an apartment".

I went out & rent a 4 bed room SFH. That's because I knew that the "temporary situation" would be long enough that we would be uncomfortable in an apartment. Of course, the SFH costs me more, but it saves me money in the long run because I can wait longer for the market to drop.

Kyle, I'm not trying to be harsh on you. But I think you made a mistake in renting a small place. And buying right now is another mistake. It's better to bite the bullet & rent a nice house in your area for another 2 years.

[gn]

Well…maybe a wife that is pissed off that we are still toughing out this cramped little apartment! Maybe I should think about buying just to avoid that.

In 2005, when we were looking for a rental to "wait out the correction", my wife said: "since renting is just a temporary situation, why don't we rent an apartment".

I went out & rent a 4 bed room SFH. That's because I knew that the "temporary situation" would be long enough that we would be uncomfortable in an apartment. Of course, the SFH costs me more, but it saves me money in the long run because I can wait longer for the market to drop.

Kyle, I'm not trying to be harsh on you. But I think you made a mistake in renting a small place. And buying right now is another mistake. It's better to bite the bullet & rent a nice house in your area for another 2 years.

[kyle t]

Hmmmm, The more I think about it, the more I realize that nothing could be lost by playing the waiting game a little longer. Well…maybe a wife that is pissed off that we are still toughing out this cramped little apartment! Maybe I should think about buying just to avoid that. Really, who can put a price on that kind of peace??????

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