I frequently get asked how much a property will go for at auction. The only answer is, "beats me!" No amount of guessing or logic will bring you to any correct number. I've seen seasoned Realtors attend auction after auction trying to figure out the banks' bidding strategy. Ha, good luck! There is no consistent strategy. A perfect example of this can be seen in the bank bids that occurred on Sept 8th.
Up for auction were two properties.
The first property was a condo. It was tenant occupied (BIG issue as the winning bidder is responsible for removing the occupant.) It was in poor condition (very dated, dirty, and smelled like urine). Since it is a condo, past due maintenance fees will be owed. The fact sheet from the commissioner showed the bank was owed $168,237.55 as of September 30, 2019. Anything since that date is just an accumulation of interest, fees, and attorney expenses. I expected the bank to bid $168k or below (and I didn't want it even at that price!). Why would the bank want to deal with removing a tenant, and then paying a Realtor to try to sell a pee-stink unit, all the while paying maintenance fees? I was shocked when the bank bid a whopping $214,507.91. None of the 4 bidders in attendance bid against the bank at this high price. (Auction Recap)
The second property that day (different bank) was a single family house. This house was vacant and although I did not attend the open house, I was told this house was in very good condition. The fact sheet from the commissioner showed the bank was owed $650,347.96 as of August 1st, 2019. I expected the bank to bid around $700,000 or more. When the bank only bid $576,400 I was very frustrated that I hadn't brought a cashier's check to the flagpole that day. Only one private bidder bid against the bank, and they got a heck of a deal! A vacant single family house in Kona for only $576,500! (Auction Recap).
The moral of the story - NEVER try to guess what the bank will bid. Do your research, figure out your top dollar, and take 10% of that to the flagpole. See you there! (Calendar of upcoming auctions)
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