Homes at Auction are Not Always Good Deals

I sold this buyer a home a few years back when she bought with her sister. Over the years they both got married, had children, and now she and her husband were looking for a larger home with a really good school district. The search was a long one and it seemed every home they really liked and wanted to make an offer on had multiple offers…yes, multiple offers. So, they competed a number of times for homes over maybe a year period, but weren’t interested in getting caught up in the competition and paying top dollar for any of those homes.

And, then this home came along. We all thought for sure we would again face competition with multiple offers, but as luck would have it, we were the only offer for once! And, the buyers actually got this home $30,000 under list price. So, not only they did not have to compete and pay over list price, but they were the only offer and got to pay under list price. Plus, the seller did some additional repairs.

This home was investor owned. The seller had bought this home at auction and dumped a ton of money into it and it’s just beautiful. Unfortunately for the seller, there was a $500,000 (yes…$500,000!) lien that came out of nowhere that he had to pay since he bought it at auction. In an auction, there is no title company involved,  no title insurance, no escrow period, you just buy the home on the spot with all cash…no loans, no financing, no inspections. You bid and if you are the highest bidder, the home is yours.  So, the seller ended up paying about $1.3 million for the home when all was said and done and sold it to my clients for $900,000! Amazing!

Plus, once we went into contract, the seller did a lot of additional repairs, like sealing the windows, giving a termite clearance which included a fumigation, and just some other odds and ends here and there. So, this was a true deal for the buyers. It was definitely worth the wait for this beauty! The seller and listing agent were wonderful to work with and did a lot of extra items that they were not required to do, so it was a true pleasure. And, the buyers can celebrate the first Christmas in their new home!