Modesto - SJ Valley Home Bidders Beware..
Another home foreclosure auction is headed to Modesto, and it's got potential bidders hankering for a bargain. But before you start waving your bidding number in front of a fast-talking auctioneer, there are things you should know about home auctions. Most of the more than 500 people who attended last month's auction in Modesto never had seen houses sold that way. The process caused confusion because some deals quickly fell through with several of the high bidders. Those houses ended up being auctioned off again and again, until the auctioneer found bidders who were financially qualified to purchase the homes and had brought sufficient down payment funds.
Bidding rules will be different for the next big auction, scheduled by Hudson & Marshall for July 19 at Modesto Centre Plaza. And more auctions are expected to be held later this summer and fall. That's because lending institutions have repossessed thousands of Northern San Joaquin Valley homes, and they're eager to sell them any way they can. So here are some bidding tips for first-time buyers, seasoned real estate investors and everyone else who is considering buying a home at auction:
RESEARCH HOME VALUES — "It's definitely a buyer's market and everything's on sale right now," said Ken David Elving, co-owner of Matel Realtors. He is representing the sellers of five homes that will be auctioned July 19 in Modesto.
To determine a home's value, Elving said, don't rely on what homes sold for in the past because prices have been falling very quickly. "Focus on the prices being asked for homes for sale now," Elving said. To determine a "comp" — or comparable price — he suggested looking on a Web site to see the asking price for similar homes. Current asking prices often are substantially less than previous sales prices for identical homes.
Example: Elving said a home in the July 19 auction at 1855 Vintage Circle in Oakdale sold in May 2006 for about $550,000. By this spring, that 2,784square-foot home was back on the market for $394,000. No one bought it, so now it will go to the highest bidder. A search of properties for sale in that neighborhood shows several slightly larger homes priced about $360,000. So that $360,000 price may be a more logical bid than $550,000...
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