AUCTION, AUCTION -- GET IN AND BUY IT!!

By
Mortgage and Lending with Hill Valley Financial Services

 

        Buena Vista Custom Homes

Thankfully, Oregon has been one of the better states so far in terms of foreclosures and defaults...having had less problems than many states.  Additionally we have been lucky in not seeing the drastic reductions in home prices.  It seems, though, that the challenges for the builders has been tough.  This weekend there was a write up in The Oregonian explaining that a custom builder, Buena Vista Custom Homes, will be auctioning off 248 brand new custom homes in Oregon and Washington.  With the bidding starting as low as $69,000.00, there are sure to be some great deals on purchases!  This is a process that is new to me with the new homes, and it should prove interesting to watch and learn about.

I went online and explored the entire process, so I wanted to share my research findings with you!

  • Registration and attendance are free -- you must register online here.
  • The homes are listed on the auction's website -- with photos, square footage, starting bid, etc.
  • There is an inspection period to ensure the quality of the home(s) you will be bidding on.
  • Down payment requirements are very low -- usually 5%.
  • Realtors/Brokers are welcome to participate -- as long as they are with their clients throughout the inspection process and the bidding.  Also, form must be filled out prior to purchase.  Click here for more details.
  • Financing can be obtained through Countrywide -- or you can contact me to be pre-approved.  :)
  • The auction sessions are on December 15th and December 16th at the Oregon Convention Center.

                                   Kitchen view                Master bath
This is an excellent opportunity for purchasing.  Make certain that you do your homework, investigate the property during the open inspection period, check into the detailed legal descriptions, and make a very educated decision.  I look forward to hearing your thoughts on this opportunity.  And, if you have ever been involved ina situation like this before, please let us know, here, how it works from your perspective!  I will be watching, reading, and writing!  :)

 

**UPDATE ** Congratulations to buena Vista Cut=stom Homes and their newest home owners.  Auction results can be found here.

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Anonymous
Tim
Hi Sarah. In the terms and conditions it says all properties have a reserve price and the staring bid is not the reserve price. The prices they show on the auction page are the "starting bid" price so that would say to me the reserve price is higher. Has to be, I'm sure he won't take a loss on these homes. I think it's possible to get a deal too, just not what people think they'll get.
Nov 23, 2007 09:52 AM #11
Rainer
73,981
Sarah Eubanks
Hill Valley Financial Services - Oregon City, OR
Preferred Oregon Loan Consultant & Notary Public

Tim ~  Thank you for your interest in this topic.  I agree with you on most all of this.  I am not so sure that the  builder is unwilling to take a loss.  Additionally, with the profit margin that a builder makes, even at really inexpensive, they would not likely take a loss.  On average, a general contractor builds 20 to 30 percent profit margin into the cost of a custom built home.  So, if a home costs $300K, the builders profit would account for $60K-$90K.  In that respect, the actual cost to the builder then, would of course be somewhere between $240K-$210K.

The other factor which I see being equally important is that the builder may be willing to take a loss on a few of the homes.  When his inventory is sitting at almost 250 homes, he needs the capital to continue his source of income.  I guess I see it the same way that a car dealership does actually sell loss leaders.  It definitely draws the attention of the crowd, and it can be a write off on the losses.  I registered for the event so that i can go and check it out.  I will then be knowledgeable the next time that I am hear of something like this!

Again, Tim, your knowledge, thoughts, and opinions are greatly appreciated!  :)

Nov 23, 2007 11:25 AM #12
Anonymous
Tim

Hi Sarah...If you go on the Buena Vista website he has a letter to his homeowners..part of it says that the auction company will use a very aggressive pricing strategy to generate interest but he anticipates the actual selling price to be in line with the market. I wonder if he'll have a high reserve price or if he is just trying to calm down his recent purchasers?

 

Nov 24, 2007 05:43 AM #13
Rainer
73,981
Sarah Eubanks
Hill Valley Financial Services - Oregon City, OR
Preferred Oregon Loan Consultant & Notary Public

Hi Tim ~  Nice to hear from you again!  That is interesting what he posted on his site.  I am going to need to go and check it out!  I was actually commenting about the current homeowners to someone else.  If I were a homeowner there in one of the neighborhoods, I would be concerned about the effect it could have on my property values.  I think that he is likely trying to reassure his buyers.  As has been stated, I think that people will - for the most part - pay pretty close to retail price.  auctions can get crazy with bidders forgetting their heads...almost like gambling!

Only time will tell, I guess, and with about three weeks left, I am starting to get interested in attending to see how it turns out.  Will you be going either of the days?  If so, I will look forward to meeting you there...

Nov 24, 2007 07:24 AM #14
Anonymous
Sally
This is amazing! I want everyone else to stay home. BECAUSE I'M GOING TO BUY THEM ALL! Take that, suckers!
Nov 25, 2007 12:22 PM #15
Rainer
73,981
Sarah Eubanks
Hill Valley Financial Services - Oregon City, OR
Preferred Oregon Loan Consultant & Notary Public

Hi Sally,

I admire your conviction and your intensity.  I would certainly recommend that you register and go to the event.  Have you had a chance yet to do that yet?  I certainly hope that you do get a lot of great deals.  I think that this situation can be a real win-win.  The builder can clear some of his invnetory and buyers can purchase good homes for possibly a terrific price.  If you need any help with the finance side, please do feel free to let me know!  :)  I can certainly help in that regard! 

Thanks again for your thoughts and support,  Sarah

Nov 25, 2007 01:06 PM #16
Anonymous
Michelle

Definitely a buyer beware situation.  Please read my blog post about it: http://pdxre.blogspot.com/2007/11/auction-is-coming-to-town.html

 

Nov 28, 2007 05:58 AM #17
Rainer
73,981
Sarah Eubanks
Hill Valley Financial Services - Oregon City, OR
Preferred Oregon Loan Consultant & Notary Public
Michelle ~  Thank you for adding your input to this discussion!  I am off to read your blog on the topic!  :)
Nov 28, 2007 08:41 AM #18
Rainer
73,981
Sarah Eubanks
Hill Valley Financial Services - Oregon City, OR
Preferred Oregon Loan Consultant & Notary Public
Michelle ~  I did read your blog.  You included a lot of solid information in there.  Nicely done!  :)
Nov 28, 2007 02:35 PM #19
Rainmaker
212,573
Jennifer Monroe
Savvy + Company Real Estate - Charlotte, NC
Real Estate REALTOR®/Broker in Beautiful Charlotte
Hey Sarah... Did you go want to go to this? Maybe we should grab Goodwin to go too....
Nov 30, 2007 11:57 AM #20
Rainer
73,981
Sarah Eubanks
Hill Valley Financial Services - Oregon City, OR
Preferred Oregon Loan Consultant & Notary Public
Jennifer ~  That sounds great to me!  I registered for it already.  I figure that with it being free, it would be good education, minimally!  :)  Let me know what you think!  I emailed him today about our area.  Did he let you know??  By the way, I would love for you to post something lyrical to the new group!  :)
Nov 30, 2007 12:22 PM #21
Rainmaker
334,338
Karen Cooper
Karen Pierce | Mortgage Loan Originator NMLS#223305 |360 Mortgage Group LLC NMLS #155922 Austin Texas - Austin, TX
Professional Mortgage Specialist
Hi Sarah - Auctions can be a fun experience. They seem to be becoming a more popular means to move excess inventory, for banks, builders and some large investors. We attended the HUD REO auctions in the Los Angeles area after the Northridge earthquake in 1994, and that was something! Attendees ran the gamut, from excited first time homebuyers with their agents hoping to get their first home for a song, to the savvy investors looking to quickly build their portfolios. Mind you, the HUD properties that weren't sold before going to auction were the roughest of "diamonds"...the properties we previewed were sometimes tough to decipher which room was which, since they had been completely and totally stripped. What an experience! Hope you enjoy it as much as I did. Still haven't made it to a trustee's sale on the courthouse steps. One day soon...
Nov 30, 2007 02:49 PM #22
Rainer
73,981
Sarah Eubanks
Hill Valley Financial Services - Oregon City, OR
Preferred Oregon Loan Consultant & Notary Public
Hi Karen ~  Thanks for the info!  I love hearing experience of my trusted colleagues and friends!  I just think that until you have been there and been involved, you cannot make a snap judgement.  Thanks for stopping by and sharing with all of us.  This topic has stirred much conversation in our neck of the Oregon woods!  :)
Nov 30, 2007 03:48 PM #23
Anonymous
manazuma@hotmail.com

This is an excellent time to view lots of plans and choose one for a later building project.  I definitely found a plan that I want to build.  All of the homes are open everyday so you can look at your leisure.  I've been through all of the Happy Valley inventory once or twice and enjoyed every minute of it.  You do need to be careful as some of these properties are not finished and will not be finished by auction day.  Also you will quickly notice that the budgets for finish work were cut way back.  Much of the inventory has rental level finish and floor coverings.  In my opinion all of the dollar estimates of previously listed for are high to begin with and then at least another $50k was cut out of the cost of finish work.  One house was so severely cut back that the fireplace cutouts are covered by painted wood.  As you go from house to house don't forget to estimate the cost of finishing the lots with landscaping and fencing.  Many of these, perhaps most are on undesirable lots with little or no usable ground.  Also I noticed that several have decent views, and there is a premium for that.  If you look closer however you may find that the views are only temporary and will be blocked by future development.  I don't feel comfortable with the idea that there are reserve prices that cannot be known.  Having reserves means you and I have to spend a lot of time to prepare for something that may be a complete waste of time. On a more positive note I think that this event, no matter the outcome, will help to facilitate the necessary market correction in our area that will bring values back to reality. 

Dec 01, 2007 03:31 PM #24
Rainer
73,981
Sarah Eubanks
Hill Valley Financial Services - Oregon City, OR
Preferred Oregon Loan Consultant & Notary Public
Hi "Manazuma" ~  Sorry, I just do not have a real life name for you, so I will use this one!  Thank you for your comments and your knowledge.  Truly, it is nice to read your comments.  Your insight seems to be life experience, and positivity wrapped into one.  I particularly enjoy your detailed look at the extra expenses with landscaping, fencing, and the like.  Thanks for posting, sharing your research, and I hope to hear from you again sometime soon!  :)
Dec 01, 2007 04:35 PM #25
Rainer
73,981
Sarah Eubanks
Hill Valley Financial Services - Oregon City, OR
Preferred Oregon Loan Consultant & Notary Public
To all who commented and left their opinions...please feel free to check the update link at the bottom of the post.  Thank you for sharing your thoughts here!
Dec 22, 2007 03:52 AM #26
Rainmaker
119,507
Sara Goodwin
Ashcroft & Associates - Portland, OR
Portland, Oregon Appraiser

Hi Sarah!

Did you attend?  I missed it - I updated my blog with your information.  Thanks!  Happy holidays, my friend!

Dec 22, 2007 12:41 PM #27
Rainer
73,981
Sarah Eubanks
Hill Valley Financial Services - Oregon City, OR
Preferred Oregon Loan Consultant & Notary Public
Sara ~  No, I had other things that day, too!  You are welcome and Happy Christmas to you, too!  We'll get together soon.  Perhaps I will get you your check in person!  :)
Dec 23, 2007 12:52 AM #28
Rainmaker
1,006,509
Fred Carver Personal Real Estate Corporation
RE/MAX Camosun Victoria BC Real Estate - Victoria, BC
Accredited Real Estate Consultant

Sarah..Great Blog, lots on detail and interaction from the Public and AR members. It certainly is a new niche for all here, Thanks all you hard work and keeping us informed.

MERRY CHRISTMAS...HAVE HUGE YEAR IN 2008!

Dec 23, 2007 04:07 AM #29
Rainer
73,981
Sarah Eubanks
Hill Valley Financial Services - Oregon City, OR
Preferred Oregon Loan Consultant & Notary Public
Fred, Thank you!  I was pleased to see the input from members of the community too!  Have a blessed Christmas yourself!  :)
Dec 23, 2007 03:20 PM #30
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