Thursday, March 19, 2009

Real Estate Auctions

This is my first blog and I hope that everyone enjoys reading my thoughts and news from Real Estate. I always encourage comments and feedback to help me get the news that you want.
I have just returned from yet another Real Estate auction that made me scratch my head. It was located at an old Victorian in Baker and there were about 6 properties auctioned off. When I first arrived I noticed all types of people standing around. There were a few that actually knew what they were doing and were quietly waiting for the sign up. There were quite a few others that had no clue and went up to everyone they could to see if they knew what was going on. In these uncertain times I wonder why people would show up at an auction without representation, where, when the gravel comes down they have just purchased a house that has no "get out of contract" clause. There were probably 50 people at the auction but there really were only about 10 serious bidders. With 1 exception every house on the auction paper that day, went for OVER what the house was being offered a few weeks before on the MLS. And the house that went for the most was the Victorian. The house was in really bad condition and needed a complete remodel. I estimated you could get a top price of about $400K if it was totally fixed up which would be about $150K to $200K because of the Historic designation and extensive work needed. The house went for $253K with the buyer having to pay for all the closing costs. Being that I have been to many auctions, I wasn't surprised at all. People get so excited at these auctions that they feed off the others that are bidding. I can only hope the people that buy these houses at above market price are going to live there for a very long time. There are, of course, exceptions to the rule and there was a house at the auction that did go for a very good deal.
The thing to remember with auctions is that the house is as-is and you should do your research before going to one. You could be overpaying for something that needs a lot of work. And even though Denver is ranked #1 in the nation for Real Estate there are good deals to be had. You have to be patient, do your research and know a professional that will give you the best advice. Otherwise you could be living in a Money Pit eating Romin!
Denise Fisher
Real Estate of the Rockies

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