CA auction

http://www.news10.net/display_story.aspx?storyid=29527

Hundreds of potential homebuyers crowded an exhibition hall at Cal Expo Saturday morning, many hoping to snap up a foreclosed home.

At a fast, nearly frenzied pace, 242 homes in the Sacramento region were all auctioned off to the highest bidder in about three hours.

Many homes valued at nearly $500,000 opened to bidders at just $250,000. But it didn't take long for the hot homebuyer competition to quickly drive many of those prices up.

"I haven't heard of that many steals here," said Andy Adams, who drove to the auction from South Lake Tahoe.

But there were some bargains to be found. Pat and Satya Chaterjee won their bidding war for a Roseville home, paying about $15,000 under market value.

But despite their good fortune, the auction's circumstances made it tough for the Chaterjees to celebrate.

"It's sad to see new houses with owners thrown out. The fault goes to greedy mortgage lenders offering no interest loans," said Satya Chaterjee.

The Sacramento region has some of the highest home foreclosure rates in the nation. Nearly 3,400 homes were foreclosed upon in the first quarter of 2007.

The auction was the first of three held by the Real Estate Disposition Corporation scheduled for this weekend. An auction of Bay Area properties will be held at the San Mateo County Event Center in San Mateo Sunday, followed by bidding for Modesto and Fresno properties Monday at the Modesto Centre Plaza in Modesto.


http://www.sacbee.com/101/story/238605.html

Repossessed homes trigger hot bidding
By Jim Wasserman - Bee Staff Writer
Published 12:00 am PDT Sunday, June 24, 2007

Bill Weldon liked the empty house so much he watered its landscaping for two days before it was to be auctioned to the highest bidder.

Saturday, that was him.

Among a crowd of 1,200 people attending a colorful, fast-paced auction of 107 foreclosed homes, Weldon, a retired Antioch High School teacher, outbid a competitor and won the house in Galt for $300,000. He leapt past his intentions of spending $275,000, but it was the house he really wanted.

"It's a very nice house with vaulted ceilings," he said. "I figure instead of saving $100,000, I saved $75,000. It's still a good deal." He will move soon from his house in Rancho Cordova.

Weldon signed his escrow papers about 1:15 p.m. Saturday, then quickly returned to the boisterous adrenaline-loaded spectacle where an Irvine foreclosure liquidator sold the bank-repossessed homes.

Tuxedo-clad runners worked the large crowd and attractive young women staffers heartily applauded opening bids as homes, condominiums and mountain cabins from eight area counties went on the auction block. Loud, rapid auctioneer babble, rock music and free coffee fueled the intensity as bidding began shortly after 10 a.m. Many of the houses, witness to previous owners' misfortunes and inability to make mortgage payments, sold at the rate of one per minute.

Eyeing the crowd, which quickly surpassed 1,000 after doors opened at 8 a.m., Mike Shack, vice president of Real Estate Disposition Corp., pronounced himself "very pleased." The firm and its affiliates had 150 staffers on the scene and spent "hundreds of thousands of dollars" promoting a three-day auction of 242 Northern California bank-repossessed houses. Auctions are scheduled today in San Mateo and Monday in Modesto.

Saturday's auction, where winning bids ranged from $105,000 for a dwelling in Sacramento to $810,000 for a house in El Dorado Hills, showed a housing market in distress as foreclosure activity mounts.

Banks and mortgage lenders last month repossessed 969 homes in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties, according to Fair Oaks-based Foreclosures.com. But the numbers, while rising, are well under 1 percent of total area households, the Web site reported.

Still, other peoples' troubles have surely opened doors for investors who flocked to Cal Expo.

Inside a cavernous room with 850 folding chairs and with hundreds of people standing along the walls, Gail Roe of San Jose got a 755-square-foot house in Sacramento for $115,000. Friend Barbie Correnti, holding a dog named Peanut, whooped and hugged Roe. Minutes earlier Roe had lost another house after stopping at $355,000. The blind former Kaiser Permanente nurse practitioner lives on income from her investment properties.

Bob Somal and his real estate broker father, Narinder Somal, bought two houses, paying $240,000 for one in Stockton and $400,000 for another in Elk Grove.

"We were going to go to $350,000," said Bob Somal. "We decided to go to $380,000. And our winning bid was $400,000."

But that was $20,000 less than the 2,460-square-foot house brought the first time it was sold Saturday. Several times during the day, houses returned to the auction block when buyers had financial issues. The Somals plan to resell both houses.

Investor Heman Lee of Sacramento bid $350,000 for an 1,844-square-foot house in Elk Grove and plans to rent it. He called it a "good price. I looked at the house. It's real clean. It doesn't look like a lot needs to be done."

Buyers paid an additional 5 percent of their sales prices to REDC. The firm also charged lenders an unspecified commission and promotion costs. Buyers were required to show up with a $5,000 cashier's check and had to pay at least 5 percent down on the purchase. The event lender, Irvine-based Impac Lending Group, offered four types of loans: 30-year fixed, interest-only, five-year fixed and stated income.

Most buyers proclaimed themselves pleased with their savings, which ranged from about 5 percent to perhaps 30 percent below previous asking prices. But some overpaid, said watchful real estate agents. Seeing one Stockton house sell for $460,000, veteran Stockton agent J. Richard Sabbatini shook his head and said the house was not worth that much.

Some came to watch for practice, assuming there will be more auctions and better prices later this year or next. Others said they decided not to bid after seeing heavy traffic at open houses and such a large crowd.

"I just figured it was going to be prices higher than I'd like to pay," said Mesut Koch of Rocklin. Watching the frenzy, Koch said: "I don't think I would do well here. I'm not coming back."

He said it looked easy for people to lose themselves and go $10,000 too far.

Others were simply disappointed. Jennifer and Michael Johnson of Esparto, had hopes for two houses in Marysville and Olivehurst. They waited through 3 1/2 hours of bids with two young children, only to see prices quickly jump beyond them.

For Weldon, it was his second time buying at a foreclosure auction. During California's last real estate downturn in the 1990s, he successfully bid $162,000 for a Pittsburg waterfront town house. Today, he said, it's worth $600,000.

Go to: Sacbee / Back to story