Special offer

It Happens on the Courthouse Steps

By
Real Estate Agent with Remax equity group DRE# 200506219

Clackamas County Courthouse c 2009 Alexsandra StewartIf you had asked me I would have said that the auction would have been in an office, in a building, maybe in a courtroom. It wasn't.  The residential property auction was held in Oregon City, on the Clackamas County Courthouse steps.

I figured that auctions on the courthouse steps were obsolete, a story from another time.  Yes, it had been common during the depression, maybe lasting into the fifties or sixties.  But now, in the internet age - wouldn't there be a 21st century way of holding a property auction?

I went with a client. She was curious about a house she and her husband had made an offer on.  It was a short sale, and about the time the bank might have been reaching a decision, the seller walked. It was an investment property and the looming deficiency judgement evidently led him to decide he'd be better off with a foreclosure.

She wondered if it might be a good idea to get some cash together and try to buy it after all. On hearing the risks involved and discovering that the opening bid was $57,000 more than the offer the seller accepted that had gone to the bank, she decided not. Still, she wondered how the auction would work. So did I. Arbor, Clackamas County Courthouse c 2009 ALexsandra Stewart

Anyone can find the lists on the internet. There are numerous sites listing the foreclosed houses and the dates on which they will go auction.  This auction was scheduled for March 6th at 10 am, at the courthouse, under the arbor.

Under the arbor.  I thought that was intriguing, strangely picturesque, ironic

Early, we walk a few blocks and get a coffee.   See the arbor.  Sit under it waiting for 10 o'clock.  See a woman with a sheaf of papers in her hand. A man lighting a cigarette. Tagged jurors on a break. No crowds, no one with envelopes or paperwork. Just the woman, clutching papers, mouth clenched.

"Are you waiting for the auction?" I ask.  Yes, with a nod of her head.

The cigarette man interjects with, "they're doing it now."

Looking around, I see nothing more.  "Where?"

"On the steps," and points.

"But the web site said 'under the arbor'".

"Only when there is something going on at the courthouse and they want to keep the steps clear."

A man stands by one of the pillars, headset attached, with clip board and pen.  He's reading from a list, pauses,  makes a check as we watch. This is how it works he explains.  "I read the list."

I wonder where the bidders are. The insiders, the regulars I've been told about. The scene is strangely empty for what is supposed to be a hot activity.

The house on Primrose?

Postponed.

Auctioneer at Court House c 2009 Alexsandra StewartHe is not overly communicative. The woman with papers speaks softly to him. My client and I look at each other. We turn, leave.

From across the street I see she is no longer there and someone else has taken her place.

Foreclosure.

Auction.

It happens on the courthouse steps.

 

 

Posted by

 

Search for property at:

Banner, Alex Stewart, Broker

 

Alexsandra Stewart
Remax equity group - Portland, OR
Broker - Portland Oregon Real Estate

Walter - it does seem like an older custom doesn't it? I'll bet even older that 100 years.

Roland -- do they change which side they use? That could be very confusing for people.

Lisa - I'm guessing outside in the snow too -- you get a fair amount don't you?

Bruce & Mary - I'm interested in the history too - -I looked on line --but didn't find anything. Big crowds makes sense.  Certainly some of the photos of the depression farm auctions show big crowds, and also right on the farmstead.

Mar 22, 2009 12:41 PM
Robert Vegas Bob Swetz
Las Vegas, NV

Alexsandra - What a wonderful post and I can see why the Gods featured your post, it has also been featured at:

LATE NIGHT - EARLY MORNING AT ACTIVERAIN

Thanks!

Mar 22, 2009 12:44 PM
Alexsandra Stewart
Remax equity group - Portland, OR
Broker - Portland Oregon Real Estate

Dawn - I've heard that about here too - that it is hard to get your bearings.  Certainly that was true when I was there.  I didn't even know the auction was happening!

Kathy -- yes, a place for all.  I found it interesting.  Not sure I would want to learn all that I would need to know either.

Bill -- I think your adjectives sum it up.

JP --  it is obviouslhy a fairly universal practice.  Maybe so people woiuld accuse the banks/lenders of behind the scenes deals??

Mar 22, 2009 12:52 PM
Alexsandra Stewart
Remax equity group - Portland, OR
Broker - Portland Oregon Real Estate

George -  hmmm - hadn't thought about the cost of transforming the custom to interent etc.  I am sure that is an issue. does feel archaic.

Jason -- yes it does seem that way, in a way. Must be so hard to go through.

Amy -- I found that interesting also, and surprizing.  It sounds as if that is a farily common practice --and very likely closer to what the actiual mortgage is.

Tammy -- It has to be a mixed bag for you.  That would be a bit of a kicker. I read recently about families giving up their pets because they could no longer aford to feed them. 

Mar 22, 2009 12:59 PM
Alexsandra Stewart
Remax equity group - Portland, OR
Broker - Portland Oregon Real Estate

Simon --  the accuracy of that information all depends on how prompt they are with data entry I'd guess.  As of 9 am it was still listed as a scheduled sale.  It would have been a waste had she really wanted to bid on it.  As it was, it was an excursion to learn.  I'm curous to know what additional public disclosures would be helpful to have?  I know they advertise to some extent.  Would it be more advantageous for the general public, - -people who want a home to live in --  or just for investors who will rent? or both? I certainly agree it would be better to have fewer REO's.    Interested in your thoughts.

Mar 22, 2009 01:07 PM
Alexsandra Stewart
Remax equity group - Portland, OR
Broker - Portland Oregon Real Estate

Robert -- thanks for the affirmation -- and for the feature, I appreciate both very much.

Mar 22, 2009 01:08 PM
Charles Stallions
Charles Stallions Real Estate Services - Pensacola, FL
850-476-4494 - Pensacola, Pace or Gulf Breeze, Fl.

That is the way it has always been I thought. I go there from time to time and it is a hoot. I have bided on a few but never got one. Although an investor of mine has gotten 3 over the last 10 years.

Mar 22, 2009 01:37 PM
Elizabeth Cooper-Golden
Huntsville Alabama Real Estate, (@ Homes Realty Group) - Huntsville, AL
Huntsville AL MLS

Yes, they do auctions on the courthouse steps nearly everywhere.  Isn't it sad?  I've never understood why the courthouse steps.  I don't get that.  Rain, sleet, snow....outside they go!

Mar 22, 2009 01:47 PM
Alexsandra Stewart
Remax equity group - Portland, OR
Broker - Portland Oregon Real Estate

Charles -- I think you are accurate - it has always been that way.  I just wish I knew why, or how it started.

Elizabeth - It does seem sad to me, such a public venue for what seems a private matter in some ways.  I get that the lenders need to get as much back as possible, it just seems so - sad.

Mar 22, 2009 01:51 PM
Vickie McCartney
Maverick Realty - Owensboro, KY
Broker, Real Estate Agent Owensboro KY

Hi Alexsandra~ I am not sure how they do them here, but when I lived in Brownsville, TN they held them on the courthouse steps or just inside the courthouse.  If they asked toomuch money (which they usually did) they did not sell on the steps. 

Mar 22, 2009 02:51 PM
Nyles Courchesne
Peskin, Courchesne and Allen, P.C. - Springfield, MA
Massachusetts Real Estate Attorney

Not so much the case in MA, , , we have lots of rules here.  Buyers of City foreclosed properties must quallify to bid!

Mar 22, 2009 03:17 PM
Chris Olsen
Olsen Ziegler Realty - Cleveland, OH
Broker Owner Cleveland Ohio Real Estate

Hi Alexsandra -- Yes, this is an interesting process, and very intimidating to a newcomer.

Mar 22, 2009 04:30 PM
. .
Adak, AK

In New Mexico foreclosures are sold on courthouse steps, anyone can bid - I saw a homeless man watching out of curiosity place a bid.

The lender's goal is to obtain right to sell the home so often opening bid is the payoff - way above market value. A small crowd gathers, but most are just curious.

Regulars? A few, and they usually have one specific property with some equity. I had a client buy a mobile home on real property recently, his bid was $1 over opening bid and he was highest bidder. The Special Master took his name and they agreed to payment in full about 48 hours later.

Mar 22, 2009 06:33 PM
Alexsandra Stewart
Remax equity group - Portland, OR
Broker - Portland Oregon Real Estate

Vickie - It seems it is a complicated process, and the opening bid is a strategy. See Kent's comment below.

Nyles -- Here you have to have a cashier's check with you for the amount you are going to bid.  It is made out to yourself and then endorsed to the lender.

Chris - I think any newcomer to the business of it would need to really study before jumping in.

Kent - I had a hunch that the opening bid was the payoff. Must have been interesting for that homeless man to make a bid. Kind of a statement in a way!

Mar 23, 2009 05:33 AM
Scott Leaf Personal Real Estate Corporation
Keller Williams Elite Realty, Port Coquitlam, BC - Port Coquitlam, BC
Scott Leaf & Associates Real Estate Team

Alexsandra:  It is done in an actual courtroom in front of a Judge or Master.  The Court reviews the matter to make sure the foreclosed upon individuals interests are being looked after.  All foreclosure properties (very few, Im told .01% in Canada) are usually listed with a REALTOR® and posted on the MLS like any other property after the redemption period.  The Mortgagor will have a lawyer acting on their behalf if it is an institutional mortgage from a bank or trust compnay.  The listing agent presents offers to the lawyer and then the countering process ensues, if acceptance is found then we wait for a court date.  The accepted price becomes public knowledge and must be disclosed by the listing agent to any interested parties. 

At court (usually in a week or two) any other interested parties who have asked the listing agent for the disclosure document and agree to add the unique language that each lawyer seems to come up with in a schedule to the standard contract of purchase and sale show up with a sealed bid offer that is better then the originally accepted offer.  The original offer maker has to decide whether or not they wish to bring a Best Offer with them in the event that there will be competitive offers.  Somtimes many show and the Judge gets to play The Price is Right game, other times, as was the case with one I attended last month, no one else showed up and my buyer got a smoking hot deal. 

Mar 24, 2009 01:06 AM
Jim Scheller
Bridge Realty - Mankato - Mankato, MN
ABR, SRS, e-Pro, GRI

In my community in MN, no one ever shows up except the lender's lawyer, who bids exactly what is owed the lender.  No one else bids because there is a six month redemption period during which the owner could still sell the house.  No one wants to tie up their cash for that long (since it needs to be paid for quickly), especially if they might not even get the property!

It's done on our courthouse steps too, unless it's cold, as it can often be in our frigid state!

Mar 27, 2009 08:07 PM
Alexsandra Stewart
Remax equity group - Portland, OR
Broker - Portland Oregon Real Estate

Scott --  I knew there had to be some reason -- and that the process made sense to someone. It is definitely complicated with lots of things to pay attention to.  I'm glad your client got a great deal.

 

Mar 27, 2009 08:26 PM
Alexsandra Stewart
Remax equity group - Portland, OR
Broker - Portland Oregon Real Estate

Jim - the redemption period would certainly deter most buyers. Yes it can get cold there!  I lived in St. Peter for a few years, ages ago!  We used to go to Mankato to shop, and once to a Vikings intra-squad game.  My kids still go to the lake - Lake Washington - to the cabin in the summer.

Mar 27, 2009 08:30 PM
Russel Ray, San Diego Business & Marketing Consultant & Photographer
Russel Ray - San Diego State University, CA

I've been to many, many, many auctions on the courthouse steps, and bought many properties on those very same steps.

I used to think it was odd, but the "tradition" so to speak came about because in the (g)olden days notices were published far and wide (and, in some cases, they still are -- I got recent notices from San Francisco, Sacramento, Bakersfield, and Los Angeles -- I'm still connected).

That meant that in the (g)olden days, people came from far and wide to bid on those properties. In some cases, there were too many people for any building in town to hold. Ergo, the courthouse steps.

In today's world, sometimes a lot of people do still show up. Since it's impossible to know just how many will show up, it's not financially feasible or practical to tie up a large room in a building, especially if one has to pay rent to tie it up for several hours. Ergo, the courthouse steps.

While it might be feasible to do auctions online, many business relationships have been developed by personal interaction at the actual auction. The only difference between a real estate auction and a stamp, coin, car, or antique auction is that the item being auctioned is much larger. It's that largeness that often brings in more people, especially since then can then live in it.

I didn't go to our San Diego auction a couple of months ago, but I understand from my contacts that they had a good showing. They are not meant to embarrass anyone because the auctioneer doesn't stand out there telling you who was foreclosed on, where they live now, how you can contact them, how much they owed, or anything like that. It's literally just an auction on a property located at a specific address.

I've actually never met a foreclosed home owner at an auction, although I'm sure some have attended. I have heard that some foreclosed home owners will show up with a relative or someone to try to buy the property back and the auction price, but I've never heard of that tactic working.

I also have never heard of a foreclosed home owner wanting to meet the buyer in order to rent the property back, and I've never heard of an auction winner seeking out the former owners to rent the property back to them. A great supermajority of auction attendees are property investors, and since the first thing that suffers in the process of foreclosure is home maintenance, these foreclosed properties typically are ideal for property investors to pick up, renovate, and sell (flipping).

Even in this market, well renovated flipped properties here in San Diego are selling. I've done quite a few home inspections on them, the most recently just this past weekend.

Apr 09, 2009 12:02 AM
Alexsandra Stewart
Remax equity group - Portland, OR
Broker - Portland Oregon Real Estate

Russel -- Very thoughtful response. I don't know if the tactic of trying to buy back via a realitve works or not eithr -- I had heard of it, but never any results. I guess it does make sense to post far and wide for the larger audience - in the (g)olden days -- clever that!

Apr 13, 2009 03:23 PM