"...SOLD to the highest bidder for $95,000...subject to seller confirmation and approval...", shouted the auctioneer as he slowed the pace of talking way down from a whirlwind bid which started at $79,000 for one of The Cottages at Springfield homes. These homes were previously valued new about 18 months ago for nearly $205,000 and now they are being sold for a little less than half.

In July I posted an entry about the REDC auction and made some predictions as to the sales prices. How did I do? You can reference my entry by clicking here: http://activerain.com/blogsview/602928/Expo-to-House-Hundred

As with most auctions, Saturday's 100 house blowout of builder inventory from Pacific Century Homes was no exception to reserve pricing. The bank sets the price they need to reach in order to sell the home, very similar to auctions on Ebay where you place a reserve or minimum price you'll accept in order to part with your item of value.

The auction advertised a 100+ homes for sale this weekend however they were going to test the waters with 40 homes to see how buyers would react, and react they did. The Casa de Manana building located on the South end of the Imperial Valley Expo was originally set up to seat 200 people, according to fairgrounds manager Charlie. "(They) originally had me set up for 450 people, but later to me to take down 250 chairs...we didn't have 450 chairs and had to find them, then the day of the auction they asked me to put the remining 250 back up", he said.

Charlie was speaking of REDC, the Real Estate Disposition Corporation who's high energy, enthuastic and exciting sales and marketing methods have allowed them to sell more than $2 Billion dollars worth of real estate through auctions across the United States. Established in 1990 and based in Irvine, California, REDC is a large nationally recognized leader of selling real estate assets through auction and has three divisions to take care of the needs of builders, lenders, and corporate clients.

William Michaelis, a business development consultant with REDC said "this is our first time to Imperial Valley selling homes in this manner and the turn out looks favorable". "We'll start with 40 homes first and see how it goes, then we'll auction more...", he continued.

I showed up to the auction about 1:30pm expecting the auctioneers to have already blown through about 30 homes, however much to my surprise they were only on Sequence #5. The room looked full and from my estimates there was about350 or more people present engaging in bidding and the excitement the comes from the auction staff who are all dress in black tuxedos, running back and forth, yelling and clapping with each successful "Sold to the highest bidder" phrase the auctioneer shouted.

From what I could tell, REDC had a total of 6 auction sequences, which included the initial 40 lots of homes and then groups or sequences of 15 homes thereafter. I stayed through sequence B which ended at lot 60 and I picked up an information sheet for sequence C which had lots 61 through 74 listed.

I didn't start tracking high bid prices until lot #17, however I did note that lot #3, a 6 bedroom, 3 bathroom home in the Amberwood subdivision of Hearthstone sold for $230,000 for a home boasting 2,358 square feet and had an opening bid of $159,000, however this home lists a previous value of $469,089 according to REDCs auction sequence list.

An 1,819 square foot home at Heber Meadows, lot #9 featuring 4 bedrooms and 2 baths was sold to the highest bidder for $130,000 and had an opening bid of $109,000, however this home lists a previous value of $267,416 according to REDCs auction sequence list.

Early bidders of The Cottages at Springfield, starting at lot #21 were bidding up prices to $120,000 for the 1,334 square foot model which had opening bids of $89,000 and were previously valued at $215,755 a short time before, however most of The Cottages with starting bids of $79,000 were sold for under $100,000, most of them selling at $95,000 subject to seller confirmation and approval.

One notable deal was lot #15, a Somerset at Hearthstone home with 2,358 square feet, 6 bedroom, 3 bathroom home was sold for $140,000 and was previously valued to $351,450.

As time passed by, would be high bidders were wisked away by auction staff dressed in white shirts and black pants, as they were led to a semi-private area to complete or confirm their financing. Occasionally the auctioneer would announce a "2nd Chance" auction on a home previously sold to a high bidder, indicating the previous high bidder was not able to obtain the necessary financing to close the transaction in a manner and time consistent with REDC rules.

About an hour later about half-way through a hundred homes, the crowd considerably had thinned out. I observed and noticed several investors who were there early and had purchased some of the homes in the previous sequences. There were license plates from California, Arizona, and Mexico at the IV Expo attending the auction as these low selling prices drew attention from the surrounding areas.

Are auction prices better than foreclosure prices? Is a buyer or investor better off buying a home at auction versus using the services of a real estate agent to negotiate and protect their interest in the purchase of a home considered to be "under valued"? Someone I talked to that day said yes..."we can get a good deal at the auction of this type because the homes are new, we are buying a new home...and when you use a real estate agent, they show you used houses". She asked not to be idenified other than Margaret and she was waiting for homes in the Heber Meadows area to come back on the auction. According to the auction sequence sheets, some homes were listed as "occupied" and the majority were listed as "vacant", however it does not mean some of these homes were at one time occupied by either tenants or homeowners.

Did you buy a home at the REDC auction this past weekend, or have you purchased a home at any auction? I would like to know your story, your experience, if you won the bid and got the home, or if you won the bid and then were rejected.

I look forward to reading your comments and stories. If I can be of any assistance whether you're buying a home, or selling one and want to use the "Auction Method", please let me know, I am here to help you review your options.

Frederic

Other sales stats:
Lot #17 sold for $155,000, a 4/2 with 1,819 sq ft in Calexico on F Herrera St
Lot #18 sold for $155,000, a 4/2 with 1,819 sq ft in Calexico on F Herrera St
Lot #19 sold for $135,000, a 4/2 with 1,693 sq ft in Calexico on El Berro
Lot #20 sold for $135,000, a 4/2 with 1,693 sq ft in Calexico on H Najera Ave
Lot #21 sold for $125,000, a 3/2 with 1,333 sq ft in Imperial on Coyotes Ct
Lot #22 sold for $110,000, a 3/2 with 1,333 sq ft in Imperial on Coyotes Ct
Lot #23 sold for $95,000, a 3/2 with 1,333 sq ft in Imperial on Santa Rosa Dr
Lot #24 sold for $105,000, a 3/2 with 1,333 sq ft in Imperial on Santa Rosa Dr
Lot #29 sold for $95,000, a 3/2 with 1,134 sq ft in Imperial on Morongo Dr
Lot #39 sold for $160,000, a 4/3 with 1,582 sq ft in Calexico on Victoria Dr
Lot #40 sold for $155,000, a 3/2 with 1,400 sq ft in Calexico on Meadow Dr
Lot #44 sold for $220,000, a 6/3 with 2,021 sq ft in Calexico on F Torres St
Lot #50 sold for $170,000, a 6/3 with 2,358 sq ft in Calexico on F Herrera St
Lot #55 sold for $95,000 a 3/2 with 1,333 sq ft in Imperial on Morongo Dr

I have more sales prices on my log sheets from the auction that day, but this should give you an idea of what the prices were, thanks for reading. Don't forget to comment and leave me your auction story.