Auctions, Auctions, Auctions: Nashville, TN

Auctions sure have changed. In today's time, auctions are becoming more and more popular ways to sell real estate at a designated and specified time. The question is which kind is it? REO auction where the bank owns the property, a foreclosure auction, or just a motivated seller who wants to sell at a specific time? You have seen the signs...you can't miss them really. Giant pointer signs on every major intersection corner that eventually lead you to the house. Real estate brokerages are appearing with their own licensed auction divisions. The auction division of my company, Keller Williams, here in town, is Premier Auctions, LLC.

In today's market, buyers pass up deal after deal because there are so many of them. They want to hold out until "the bottom" or get that once in a lifetime deal...which is understandable but nearly impossible to predict or pick. Auctions can be an avenue to get a good deal on a house, but not in all cases. Assuming you can meet the requirements of the auction, (amount required up front, and terms of payment) you need to really have good information about the property. Not only do you need to know as much as can be known about the value of the property, the home's condition, and the potential costs involved in repairs or updates that may be needed (if any), but you also need to have information about the title among other things. Homes bought at auction do not come with title insurance, and if you are not careful and have not accurately had the title researched, you could end up assuming a lien on property that was not wiped out with the auction for one reason or another. There are mulitple scenarios where this could occur and several where it would not, but if there are unknown property tax liens or federal income tax liens, or more senior liens on the property than the one at auction, it could be a very bad day for an uninformed new owner. Not only could new-found responsibility for those liens be an unexpected negative or awakening that it was not as great of a deal as thought, but when that new owner looks to resell the property, it could provide issues in providing a clear title.

Some houses do not sell at auction, perhaps because reserves or minimum bids may be set higher than potential bidders are willing to pay or maybe the risks outweigh the rewards for some people. I'm not sure. I do not know if this one will sell at auction, but I'd like to follow it through to find out what happens. This home sure does have my interest.

This new construction house is nestled in the gated Sheridan Park, Williamson County subdvidision of Brentwood, TN and has been listed on the market for $1,129,000. This is  $170,000 under starting list price at 5466 sf. It has a nice theater room/bonus room with screen and the house is wired for sound throughout. The millwork is exquisite, and the kitchen is a dream. For a one acre lot, 4 car garage, custom built luxury home, someone may just get an incredible deal and soon call this home...or we may have an update blog later with what happened. If you're interested in this auction, let me know... July 17th at 6 pm...come with me, but if you're seriously considering participation, start the research process now. Do not enter into it lightly! Whether you attend or not, I'm sure I'll post an update on what actually went down on the lawn...later.

For more details on this auction or other homes in the area, contact me at:

Dena Williams
Keller Williams
615-739-2944
denawilliams@kw.com
www.homenashvilletn.com

7/17/08 - the "update"

Quite a few folks showed up to see how the auction went. I'm not sure how many registered bidders there were at the beginning of the auction, but as of 5:30 or so, there were only 4. I don't think there ended up being too many more than that if any. Most of the people were there to watch. I believe there were about 70-75 people there in total.

As for the auction, itself, the auctioneer was in the back of a truck parked on the lawn with microphone in hand. He started at 1,200,000 with no bites (which is what it recently appraised for). If not 1.2 then where?, he said in his verbal gymnastics. So they gathered a few bids at the same time of $650k, $675k and $700k. So they were off with the first bid of $700,000.

He then brought the bid up to $800k and it was quickly taken. When it got to that point, he kept saying $900k over and over again with no bites.  Finally, they closed it down with the highest bid of $800,000. At that point, they had to check with the seller to see if he would accept it. There was never an announcing either way, but it looked to me that it was a no go. This was not an absolute auction. There was a reserve that I am quite sure was not met.

You have to admit $800,000 would be stealing the home. Most people consider a great investment at 20% below the value of the home, and I think in some cases you can find a home at 20% below market value here. However, 65% of the value on a brand new, beautifully and well built luxury home? There won't be many of those kinds of deals out there. So my "guess" is that if the bidding had got ten somewhere around $960,000, that it might have sold. And, wow, that would have still been an amazing deal for a buyer. But...no story here today. Maybe one of the auction attenders that weren't registered will make an offer now because there is one thing this auction has done...stir up new interest in this home and increase exposure. Hopefully, there will be a win/win at the end of the day, and there will be a new homeowner in a great neighborhood before too much longer.