"In California, 97% of homes auctioned are bought back by the lender"

[quote author="IrvineRealtor" date=1216348534]

I am a fisherman. I've always loved it. (The pasttime is not too different from Real Estate, actually.) My grandparents used to take us grandkids out to Lake Cuyamaca in "the Vehicle" and go RV camping during Summers when school was out. We were free to do just about anything we wanted as long as we were within shouting distance of the campsite. While my brothers would chase squirrels, rabbits, frogs and snakes, I would fish. I fished from the shoreline all day long and would only come back when required for meals and sunscreen. I didn't want to miss the chance to catch a nice rainbow trout. I would be out at the water all day long.</blockquote>




Any time you feel like taking a field trip to auctions, or fishing, I'm in! :D
 
[quote author="momopi" date=1216353874]Any time you feel like taking a field trip to auctions, or fishing, I'm in! :D</blockquote>


You're on.
 
[quote author="tenmagnet" date=1216353701][quote author="graphrix" date=1216347412]

I would also add that if the lender is not BofA (the stingiest and most stubborn lender on price), then the lender will drop the minimum bid below what is owed on the note. For example, <a href="http://www.zillow.com/HomeDetails.htm?zprop=51675093">51 Bradford here had $470k owed</a>, but the minimum bid was $352,750, and someone picked it up for $352,750.01. A nice discount from the 2003 price of $385k.

</blockquote>




The example you gave the starting bid was less than the amount owed.

Is that normally the case?</blockquote>


It is becoming more and more common. It does depend on the area though. Nearly all of the foreclosures in Santa Ana are being discounted below what is owed, and for Irvine about 60% are being discounted.



<a href="http://www.housingwire.com/2008/07/16/pace-of-defaults-in-california-slows-during-june/">See the article on Housingwire from ForeclosureRadar's stats</a>.



<em>Discounts offered by lenders at auction increased again, proving that in many key California market, institutional sellers are now making the real estate market. In June 2008, the average opening bid was 31 percent below the amount owed on the loan in foreclosure; and 87 percent of opening bids were discounted, with nearly one in four discounted by 50 percent or more, according to ForeclosureRadar statisitics.</em>



<blockquote>Do they publish or announce the min./opening bid in advance or do you have to show up for that?</blockquote>


Some times they publish it in advance, but usually it is published the day of the auction, and some times you just have to show up. You will see some of the pros go home after they hear the minimum bid on the home they were interested in. This is just for the Santa Ana courthouse, and I have yet to find a source that publishes the Orange and Placentia locations in advance. So far that info is only available at the auction or published after the home was bought or taken back.



<blockquote>Can you speculate on Winding Way, what do you think opening bid was?</blockquote>


The opening bid on it was $1,076,882.74, and that is what it went back for. I don't know what was owed on it, but BofA is such a stickler on lowering the price it was probably the same amount as the minimum.
 
[quote author="graphrix" date=1216347412]You know that no_vas will be there for that day. He can have the title of official IHB harassment manager.</blockquote>


I can get a party started, a dead poker game that otherwise isn't worth playing fired up, I can hassle somebody with the best of them, and I can absolutely do that.



Especially if the properties are in that cess pool/1.2 miles from the worst neighborhood in Santa Ana/built on a toxic waste dump/traffic nightmare/horribly planned dump they call Villages of Columbus.
 
Thanks Graph for taking the time to answer those questions in detail and walking me thru the steps.

I really appreciate it.

I wouldn?t mind Winding Way at $1.076M, the all cash is the problem.

Ties up a lot of capital.
 
[quote author="tenmagnet" date=1216359917]Thanks Graph for taking the time to answer those questions in detail and walking me thru the steps.

I really appreciate it.

I wouldn?t mind Winding Way at $1.076M, the all cash is the problem.

Ties up a lot of capital.</blockquote>


That capital only has to be tied up for a couple of weeks if you intend to keep it. Once the parcel is in your name you can slap a mortgage on it and put 80-90% of that cheese back where you borrowed it from.
 
[quote author="IrvineRealtor" date=1216360217][quote author="tenmagnet" date=1216359917]Thanks Graph for taking the time to answer those questions in detail and walking me thru the steps.

I really appreciate it.

I wouldn?t mind Winding Way at $1.076M, the all cash is the problem.

Ties up a lot of capital.</blockquote>


That capital only has to be tied up for a couple of weeks if you intend to keep it. Once the parcel is in your name you can slap a mortgage on it and put 80-90% of that cheese back where you borrowed it from.</blockquote>


That?s huge!

I didn?t know that, thanks for pointing it out.

The all cash, tying up that kind of money was a turnoff.

If we stick with the example of Winding Way, now that BoA owns it, do you think they'll let it go for what they paid?

I?m wondering if it?s better/advantage to wait for REO pricing?
 
That's what I was trying to get across with the conceit regarding fishing. If there was a large margin, the pros would have stepped in. With no bids the bank has to take it back and mark it down to market.
 
For those of you in <a href="http://en.wikipedia.org/wiki/Jargon_of_The_Rush_Limbaugh_Show">Rio Linda</a>, the prices are still too high.
 
[quote author="IrvineRealtor" date=1216362502]That's what I was trying to get across with the conceit regarding fishing. If there was a large margin, the pros would have stepped in. With no bids the bank has to take it back and mark it down to market.</blockquote>


I failed to make the connection at first, but now understand what you mean and how it relates to your fishing story.

Your point about knowing what your doing is well taken.

Didn?t cross my mind initially.

Thanks for the feedback
 
I'd be up for a field trip if you put one together IR2.



Sounds like the best strategy is to wait until the bank has the property back in their possession and negotiate with them before they put it out on the market. It also sounds like there may be a bit of luck involved as well and if one is following a particular property that it would make sense to be prepared to pull the trigger at the courthouse in the event a pro 'sleeps in' that day. I'm also thinking that because there are now multiple locations such as S.A. Courthouse, Orange and Placentia that some of those pros can't be everywhere at once and it would be tough to have capital tied up in three locations at once.
 
[quote author="EquityMind" date=1216459083]I'd be up for a field trip if you put one together IR2.



Sounds like the best strategy is to wait until the bank has the property back in their possession and negotiate with them before they put it out on the market. It also sounds like there may be a bit of luck involved as well and if one is following a particular property that it would make sense to be prepared to pull the trigger at the courthouse in the event a pro 'sleeps in' that day. I'm also thinking that because there are now multiple locations such as S.A. Courthouse, Orange and Placentia that some of those pros can't be everywhere at once and it would be tough to have capital tied up in three locations at once.</blockquote>


The auction in Placentia is at 9AM, Orange is 10AM, and SA is 2PM. Since Placentia doesn't handle as many as SA, then you could hit up all three in one day. Plus, the pros may miss one, not because they are asleep, but because they don't know that area or only have the cash for a specific property. Even the biggest and best pros can't buy <em>all</em> the properties that are deals.
 
I still think foreclosures are a little too chic. There's deals but you need to be versed in the whole process from purchase, rehab to resale. Time will tell, but there's a lot of money that needs to burn out. I just don't know if there's more houses than money or more money than houses.
 
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