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Seattle Bubble Forum Archive • View topic - I had to share this with you all!! UNBELIEVABLE!

I had to share this with you all!! UNBELIEVABLE!

Anything and everything relating to Seattle-area real estate.

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I had to share this with you all!! UNBELIEVABLE!

Postby Renter in Bellevue » Thu Jan 28, 2010 10:34 pm

This one was listed as a foreclosure for $465K in early January.

It sold for $565K
http://www.redfin.com/WA/Bellevue/11210 ... ome/510481

Unbelievable!

I must be missing something.
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Re: I had to share this with you all!! UNBELIEVABLE!

Postby ira s » Fri Jan 29, 2010 6:47 am

That property had been listed for sale at 849,000 in January of 2009. By August of '09, it was listed as a short sale. Jan 6, 2010 it was sold at the foreclosure auction, reverting to the lender for the amount owed, 447,000 dollars.
Then listed shortly thereafter for 464,000. The house is assessed by the county at 721,000. I've seen this happen a number of times, where a house is priced way below assessed value and way below comps, and attracts multiple offers.
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Re: I had to share this with you all!! UNBELIEVABLE!

Postby Markor » Fri Jan 29, 2010 9:48 am

Nobody but the lender could have bought it for as low as $447K at the foreclosure auction, right? Otherwise, why wouldn't it have sold for more there?
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Re: I had to share this with you all!! UNBELIEVABLE!

Postby jillayne » Fri Jan 29, 2010 9:54 am

It's possible that the first mortgage balance was around 447K but the homeowner had a second or third lien behind the first.

I have definitely seen this happen on the eastside with foreclosures.

Second and third liens fall off title at the auction leaving the first with just the collateral to sell.

Makes me wonder which bank was in junior lien position on that loan. More loan losses heading our way...
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Re: I had to share this with you all!! UNBELIEVABLE!

Postby Renter in Bellevue » Fri Jan 29, 2010 12:07 pm

Renter in Bellevue
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Re: I had to share this with you all!! UNBELIEVABLE!

Postby jillayne » Fri Jan 29, 2010 12:26 pm

Yeah. You could take a look at the list of all of the trustee sales that are scheduled to go to auction every Friday in your county.

Realize many are postponed every week. It take a lot of work to figure out which ones are the "gems" to use Ray's fav word.

These two companies process the majority of foreclosures in Wa state:

http://nwtrustee.com/

http://www.rtrustee.com/
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Re: I had to share this with you all!! UNBELIEVABLE!

Postby ira s » Fri Jan 29, 2010 2:29 pm

Renter in Bellevue,
You can look up houses scheduled to be auctioned at http://www.propertyshark.com, among other sites. When there, hit Washington, and " look up foreclosure" in the bottom left.
The local auctions are held every Friday @ 10 AM outside the 4th Avenue entrance of the King County courthouse ( or is it the administration bldg?) in downtown Seattle, and also outside of the office building right behind the Factoria Cinemas in Bellevue. If you can attend one, they're fun and educational. Some people use a service called Vestus to assist them with purchasing at the auction. They supposedly know which houses are better values, and can bid in your stead.
Typically, you can't just go to bank to get a loan to buy a house at the auction. You either have to have the cash, or make a deal with a special lender like Eastside funding, which makes higher interest, shorter term loans, and require at least 20% down.
In the house being discussed, the lender didn't really "buy" the house for 447,000 dollars. When it got foreclosed, it temporarily belonged to a company like nwtrustee services, and at the auction, nobody bid higher than that amount so the same lender who was owed all that money took it back, and, as Jillayne said, any secondary liens were wiped out in the process.
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Re: I had to share this with you all!! UNBELIEVABLE!

Postby Markor » Fri Jan 29, 2010 2:40 pm

TANSTAAFL (there ain't no such thing as a free lunch) strongly suggests that nobody bid higher than $447K at auction because doing so wasn't worth it. I wonder why. It's hard to fathom that dozens of super-savvy investors and services like Vestus could have all missed out on a free lunch worth tens of $thousands. Perhaps any other bidder but the bank would have had to pay off the junior liens. I thought I've read that winners at auction must pay off all outstanding liens, and that's why buying at auction is not for the unprepared.
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Re: I had to share this with you all!! UNBELIEVABLE!

Postby ira s » Fri Jan 29, 2010 5:13 pm

Markor,
I don't think that's right: I think all liens get extinguished when the home gets foreclosed on, except IRS liens. Short sales are different.
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Re: I had to share this with you all!! UNBELIEVABLE!

Postby Markor » Sat Jan 30, 2010 8:19 pm

I guess it's true that the supposedly savvy investors missed a free lunch then. It's obvious from a single pic of that house that it's likely worth more than $447K.
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Re: I had to share this with you all!! UNBELIEVABLE!

Postby jillayne » Mon Feb 01, 2010 2:15 pm

Just a side note for Ira, but I'm sure he knows this...then for readers of Ira's last comment.

Let's say the SECOND mortgage holder was foreclosing. They have the ability to do this if they're not getting paid.

At the auction, whoever is the high bidder takes title subject to the FIRST lien! So when the second forecloses, not "all" liens are automatically wiped. Like I said, I'm sure Ira knows this but for anyone following along, it's a good FYI.

So for example let's say you see an auction coming up on a sweet home in your target neighborhood. Looks like the auction opening bid is set for $100,000. Awesome because you think it's worth at least $400,000. Well maybe the second mortgage is the one foreclosing (100K) and there's a first mortgage in front of that for over 350k.

Hmm. No longer a good deal.

I filmed a foreclosure auction this past May in Bellevue. Here's the link, in multiple short segments:

http://www.youtube.com/jschlicke

The vestus guys are also interviewed.
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