Mayfield Road Foreclosure Auctioned for $222,000 | Bidder Pays More Than Last Listed Price
categories: Alpharetta Real Estate, Foreclosures
ALPHARETTA - They say you should be scared when the men in little white coats pull up to your house in a padded van. You should be just as scared when seventy-five people with little, yellow, numbered cards are standing in your front yard and men in black pants and white shirts with ties start yelling at the card wavers and babbling in extremely long run-on sentences (like this one) that sound like, as my fifth-grader commented, bad rappers.
That was the case yesterday in Alpharetta when the 3 Bedroom - 2 Bath, two-story house at 1265 Mayfield Road was auctioned to the highest bidder. The auctioneer said before he started: "We are here to determine the ‘Highest Opinion of Value’ for this property." And that is what they did.
That opinion turned out to be $222,000 + 5% Buyer’s Premium, a fee charged by the auction company to the buyer. That makes the total $233,100.
Oh, and the house is not quite move-in ready. You’re probably going to spend $5-10k adding appliances, fixing miscellaneous things and possibly updating the baths and redoing the floors on the main level, which were all tile.
Here is the odd part, though. You could have purchased this house before the auction for probably around than $200,000. I say that because the last list price on this house was $212,900. The bank (owner) would likely have come off that number some to get the property sold and not risk the price an auction might bring. Turned out for the bank that the auction was the best route to go.
Originally the house had been listed for $340,000 in March, 2007 and was reduced to $285,000 before expiring. It was relisted in September for $249,000 and expired again . A third listing had started the price at $219,900 and reduced to $212,900 where it stood when the bank elected to auction the house.
I went to the auction because I was curious to see (1) who and how many people would show up and (2) what the house would sell for. I took two of my kids to expose them to this aspect of real estate and market economies and they had a fun time trying to understand - and later mimick - the auctioneer. While we were waiting for it to start, I had them count the cars. There were at least fifty cars, parked everwhere along the street and in the front lawn. If you assume 1.5 people per car, that’s seventy-five people. It was like the mall on the day after Thanksgiving.
The bidding started at $25,000. I was thinking the house might sell for $200k. In about five seconds, the bidding was up to $100,000 and then in about twenty more seconds it was up to $180k. Then it inched its way by $1,000 increments to $200,000.
For the next five, maybe ten minutes, three separate parties continued to bid it up. When we got to $210,000 I though surely that was the top. Why would someone pay more at auction than they could have paid on the open market earlier?
I had come to the auction with a top dollar I would pay and it was no where near $200,000. When I saw seventy-five people milling around the front yard, I knew I wouldn’t be writing any checks that day.
The lesson in this is really for investors: Auctions don’t necessarily equate to "deals." Sometimes waiting doesn’t bring more opportunity; when you see a deal you have to be prepared to make the deal.
I spoke to the auctioneer after the bidding ended and commented how strange I thought it was for the house to sell for more than list. He said that sometimes happens and could only theorize that an auction brings a certain finality to a purchasing decision plus the competition is bidding right along side you increasing the urgency. People act differently under those circumstances. He also commented that some of the bidders weren’t investors, but maybe owner occupants so they had a different "opinion of value."
To those people I say get a good realtor who can help find you a deal. To the investor I say: Why would you want to put yourself in that situation to make an investment purchase? I want to make investments when there is no other competition.
There are deals out there, it just so happens that everyone waited too long on this particular deal. The ‘Highest Opinion of Value’ was found. I can’t argue with that. Good for the bank.
[Note : Two other properties were also actioned at Mayfield Road yesterday. Both were 2 BR - 2.5 Bath townhouses - one off Abernathy Road and one off Northridge Road. 7351 Cardigan Circle sold for $57,500 and 556 Northridge Crossing sold for $55,000. They could have been deals at that price, but I've never seen the properties. There was a little bidding for each property, but not too much.]
We’re seeing a ton of auctions here in Las Vegas and Henderson.