The ballrooms were packed with prospective buyers and their agents. Bankers and representatives lined the front rows. The auction book contained all of the homes that were going to be auctioned over the two day period. Auctioneers called a house number from the catalog and the bidding started…or not…depending on the property. If a bid wasn’t forthcoming the auctioneer named a starting price to stir the crowd to action. Some of the homes were being sold absolute and it took a few rounds of bidding to finally figure out how the auctioneers were distinguishing the properties that would be SOLD that day no matter what the bid.
Once we figured out the phrase “WILL SELL TODAY” was the key to an absolute sales it made it easier for bidders to know if they were going to walk away with a home or not. For everyone else it will be a couple of days of waiting to find out if the bank accepts their offer. We have seen the growing number of yellow auction signs in the front yard of individual properties in Northern Virginia and so far most of these auctions have fallen flat if for no other reason than the 10% buyer’s premium tied to them. This weekend’s auction had a 5% buyer’s premium tied to it which is a bit more reasonable but still bidders have to take the additional cost into consideration.
So are the auctioned homes a good deal? It will take a few weeks of studying the auction book with all of the auctions in Northern Virginiafinal prices notated and checking against the MLS records to see who got a good deal. At first glance it appears that some of the properties offered and purchased as “absolute” may have been a good deal. The thing to consider is that all of these properties are offered “as is” so any issues that the buyer finds after the auction are their’s to deal with.
So what is next? A condo conversion project called Parkside of Alexandria is about to auction 30 condos. The development has sold 300 plus units in the past two years but the developer is ready to move on. They are headed to the auction block on October 28th at the Hilton Mark Center in Alexandria.
So were last weekends auction of REO properties and the upcoming auction at the Parkside of Alexandria one time events? Considering the growing inventory of homes both new and resale my suspicion is Northern Virginia will see more of these events scheduled throughout the area during the upcoming months.
As always if you are a buyer thinking of attending and bidding on an auction make sure you pre-view the property with a Realtor and know what a reasonable price for the property would be. Don’t get caught up in auction fever. It could cost you big time!